Ford Motor Co. (NYSE: F), which is reconfiguring plants from producing unpopular trucks and SUVs to fuel-efficient passenger cars, will now be trimming its nationwide automobile dealerships as sales continue to lose steam. High fuel prices and shifting consumer sentiment towards smaller cars are only some of the reasons for the sales decline.Ford executives believe that more Ford dealerships (along with Ford brands Mercury and Lincoln) will have to consolidate to survive. Ford is right -- there is no way a huge, overwhelming national network of dealers can exist when sales don't. Expect dealers to start amalgamating as Ford's Way Forward plan continues taking longer than expected.
2007 stats tell the tale: Four thousand Ford, Lincoln and Mercury dealers sold an average of 590 vehicles in 2007. Toyota Motor Co.'s (NYSE: TM) 1,400 dealers in the U.S. sold 1,766 vehicles in 2007. Quite the contrast. Ford has managed to make about 400 weaker dealers combine with stronger ones since initiating a program to do just that in 2005. Looks like incentives to speed up profitable dealer concentrations will have to become much sweeter as sales continue to flop as badly as a corner lemonade stand in winter.
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Reader Comments (Page 1 of 1)
8-29-2008 @ 12:06AM
VIC JOHNSON said...
FORD AND GM HAVE TO BE CAREFUL THAT THEY DON'T GET WHIP LASHED AGAIN BY THE ARABS LIKE WHAT HAPPENED IN THE 70s WHEN AMERICA SPENT A FORTUNE TO RETOOL FOR SMALL CARS. WHEN THE ARABS SAW THAT, THEY THEN DROPPED THE PRICE OF OIL AND THE AMERICAN PUBLIC THEN HAD NO DESIRE FOR SMALL CARS. THE AMERICAN CAR SUPPLIERS WERE LEFT HOLDING THE BAG WITH SMALL CARS THAT NOBODY WANTED. ANOTHER CYCLE LIKE THAT WILL PUT AMERICA OUT OF THE AUTOMOBILE BUSINESS.
8-29-2008 @ 9:19AM
Pete said...
Sounds like Ford has capitulated to their own management failures and product decisions. The failure is not so much with the dealers it is with Ford itself.
The fastest way to lose more market share, sales and profit is to procede on reducing dealer points. They may as well surrender to the competition.
8-29-2008 @ 11:31AM
MANNY D said...
I agree with mr. Johnson that americans need larger vehicles, and although current conditions are driving people to smaller cars for economic reasons, that can reverse quickly if gas prices drop suddenly??gas will never be as cheap as years ago, thats in the past,however i can't see the day when we all will be driving puddle jumpers around, like overseas???Biofuels & long range electric vehicles may be the wave of the future, long term??? MANNY D
9-09-2008 @ 12:26PM
Philip Block said...
The Fuel Cell powered electric car is here today, not tomorrow. The problem is that the piston heads in Detroit cannot see it. Mechanical engineers hate the electric car. Anything that does not have a lot of moving parts and chrome and goes varoom is a mystery to them. The ICE needs to be left back in the 20th century.