Ford CEO says EVs will be sold 100% online with nonnegotiable price • Hacker News Board

Re: Ford CEO says EVs will be sold 100% online with nonnegotiable price

#221

Post by mechagodzilla » Fri, Jun 03, 2022, 1:49 AM UTC

Alupis wrote: post #195

argonaut wrote: post #184

Earlier quoted context omitted.

This doesn't make any sense. You would only feel ripped off because some dealerships say "No Haggle" and some do haggle. If every dealership has the same price for a specific car then literally by definition you cannot get ripped off. You're also fixating too much on the meaning of MSRP. Before the car shortage MSRP was basically just a marketing number to anchor negotiations at a high number (except for cars in supe…

To make it as clear as possible - Dealerships compete to win your business. They compete in varying ways, which include price and service. Who does Ford compete with if they set all of the prices and offer direct sales for an entire product line (EV's in this case)? The answer is "nobody". And we all know competition is what benefits the consumer... this is a regression, not an advancement. The dealership model can u…

Doesn’t Ford compete with . . . All the other car companies? Tesla, VW, GM, Kia, Honda, Toyota?

Re: Ford CEO says EVs will be sold 100% online with nonnegotiable price

#222

Post by jfb » Fri, Jun 03, 2022, 1:49 AM UTC

paxys wrote: post #39

A lot has been said about the dealership model in the last few years, and the almost universal consensus is that it is an unnecessary and predatory industry and all auto makers should just sell cars directly like Tesla does. That being said, is there any counterpoint to this view? Are there any benefits that dealerships offer today over direct sales? What would we lose if we got rid of every dealership? If there is t…

There really isn't one. The laws about manufactures not owning dealers are left over from a very different era, and the existing model is a product of pure rent-seeking from the very powerful dealership lobby.

Re: Ford CEO says EVs will be sold 100% online with nonnegotiable price

#223

Post by wumpus » Fri, Jun 03, 2022, 1:50 AM UTC

Alupis wrote: post #198

wumpus wrote: post #194

Earlier quoted context omitted.

Wait what? If there are no negotiations, and Ford's price is too high compared to the market, Ford is going to lose sales. That's micro-economics. > besides your house, it's likely the most expensive thing you'll ever buy. This is Hacker News, and I've spent 10s of millions on servers, colo, and cloud.

The problem is Ford will be the market. They are only offering these EV's direct from their website. There will be no dealerships to compete with on price and service. > This is Hacker News, and I've spent 10s of millions on servers, colo, and cloud. I'd bet you negotiated those contracts too.

I have no idea what you mean with that Ford comment. My best guess is that you think consumers are too stupid to consider anything but a Ford?

I did negotiate server/colo/cloud prices, but I spent person-months of effort deconstructing what the right price was. I've never done that for a car.

I once interviewed for a CTO job at a major storage vendor, and in the discussion they said that most of their major customers successfully reverse-engineered prices, and that kept their margins down. I've heard that (over beers) from some server resellers, too.

Re: Ford CEO says EVs will be sold 100% online with nonnegotiable price

#224

Post by iainmerrick » Fri, Jun 03, 2022, 1:50 AM UTC

Alupis wrote: post #155

raz32dust wrote: post #142

Earlier quoted context omitted.

Why would a fixed, online price end up being higher on average than what someone paid after haggling at a dealership. If anything, it should be lower because of (1) Reduced overhead, and (2) It is more closer to a free-market due to more transparency. Yes, there might be outliers where an extremely good haggler paid less, but that would be outweighed by a novice who paid way more, and the average has to be higher bec…

Why would Ford (or any manufacturer) offer cars on their website for cheaper than MSRP? What is their incentive? MSRP is a suggested retail price, which is based off the manufacturer's costs + what they believe is a reasonable margin for their vendor (dealership in this case). Ford cutting out the middle man means they can offer cars at the same exact price (MSRP in this case), but not have all the expenses dealershi…

The incentive should be competition with other manufacturers who are also offering fixed pricing. More transparency will benefit consumers.

Haggling over prices does not benefit consumers, just like haggling over wages doesn’t benefit employees.

The Carmax approach is great; clearly people are willing to pay to avoid all the normal hassle. Maybe their prices aren’t the best “if you know anything about the cars” -- where does that secret knowledge come from? Wouldn’t it be good if there were multiple Carmaxes and they had to compete on price and service? As long as the real prices were listed on the web and were always the same for everyone.

Re: Ford CEO says EVs will be sold 100% online with nonnegotiable price

#225

Post by sammalloy » Fri, Jun 03, 2022, 1:50 AM UTC

throwaway0a5e wrote: post #206

sammalloy wrote: post #196

Earlier quoted context omitted.

> I'm under the impression that the service part of the dealership _is_ the profitable part If you drive a Ford, sure, it needs a lot of service. Which is why I stopped buying Ford. Toyota and Honda don’t need much service, and I don’t see how they are money makers for the dealer. And when you move to EV, you need even less service than before since the is no ICE to maintain.

> Toyota and Honda don’t need much service, and I don’t see how they are money makers for the dealer Well first off, people like buy that marketing stuff hook line and sinker, so they make more on the sale. Second, pretty much any vehicle that rolls on earths surface is going to need stuff serviced in proportion to how close it is to the ground. For cars this means the dealer can make plenty of money selling brake pa…

The thing about Toyota and Honda though is they create loyal customers who keep coming back. My buddy has a Toyota with 250k miles on it. And that’s considered normal wear and tear. Good luck trying to get a Ford past 120k. Ever had to deal with a Ford dealership? It’s like visiting hell for a day.

Re: Ford CEO says EVs will be sold 100% online with nonnegotiable price

#226

Post by medler » Fri, Jun 03, 2022, 1:50 AM UTC

bin_bash wrote: post #202

medler wrote: post #82

This article takes an off-the-cuff comment from the CEO of Ford and reads too much into it IMO. He wasn’t saying dealerships are going away; he was actually saying the opposite. The point he was making was that Ford is going to adopt some of Tesla’s practices while using the dealership network to compete with them. Here’s the quote with more context: “I believe for retail, we have to -- it's kind of like what happene…

Frankly I don't think you're very good at reading executives' words: you have to read through the lines and notice what they're not saying. Nowhere in that does he say outright where dealers fit into an online, fixed price world. He only makes super vague statements like "dealers will be more specialized." Reads to me like Jim isn't planning on dealers being around in the future but he's being vague enough to try not…

My interpretation is informed by the knowledge that what he’s saying is not legal in most of the United States. It’s understood that dealers cut into Ford’s profit margin, but Ford is not at liberty to change the laws in numerous states.

Re: Ford CEO says EVs will be sold 100% online with nonnegotiable price

#227

Post by karakot » Fri, Jun 03, 2022, 1:52 AM UTC

ncallaway wrote: post #159

SamuelAdams wrote: post #126

Earlier quoted context omitted.

The way I've heard it explained before, feel free to correct me if my facts are wrong: State sales taxes. The big 3 auto makers are all located in Michigan, USA. If they sold a vehicle direct, the sales tax dollars goes to the State of Michigan. Which means all the other states are missing out on *significant* tax dollars. To force each state to get tax dollars, local dealerships were established. That way tax dollar…

I don’t think so. I just bought a car from an Oregon dealership, but I live in the state of Washington, and that’s where the vehicle is registered. Washington got every cent of sales tax from the sale, and Oregon didn’t get anything.

I wonder if it only works because Oregon has no sales tax though.

Re: Ford CEO says EVs will be sold 100% online with nonnegotiable price

#228

Post by climb_stealth » Fri, Jun 03, 2022, 1:55 AM UTC

toomuchtodo wrote: post #190

jvm wrote: post #157

Earlier quoted context omitted.

Selling online without negotiated price is a big change. That should make the dealerships really uncomfortable in the long run… he's kind of saying "oh the dealerships could rent out Mustangs" but is that actually realistic?

Diplomacy is the art of saying “good dog” until you make it to the rock. Ford is learning what Tesla knew from the start: dealership interests aren’t aligned with EV manufacturers. There’s very little service revenue, and dealers are incentivized to add “market adjustments” to vehicles (which Ford dealers have been doing) creating a poor customer experience. Ford has existing dealerships and is going to have a heck o…

That is very impressive actually. Though your typo made me laugh out loud.

> Someone on Twitter recently posted their Model S turning over 400km with only $3k in maintenance costs.

400 kilometers and a $3k maintenance bill somewhat reflects the image of Tesla that you see a lot on the internet. Whether or not that is actually the case.

Re: Ford CEO says EVs will be sold 100% online with nonnegotiable price

#229

Post by argonaut » Fri, Jun 03, 2022, 1:55 AM UTC

Alupis wrote: post #219

argonaut wrote: post #199

Earlier quoted context omitted.

They compete with other automakers. By your logic Ford can just jack up the price they charge to dealers and the dealers would have no choice but to accept it. But that's not true because Ford has to compete with other automakers.

Very few automakers make competing vehicles. There's a reason Tesla/Rivian can charge so much, and it's not because they're so much better built or way more luxurious than others.

You're basically arguing that Ford has a semi-monopoly over the car categories they compete in. Which is pretty laughable.

Again, by your logic Ford can just jack up the price they charge to dealers and the dealers would have no choice but to accept it. But that's not true because Ford has to compete with other automakers.

Re: Ford CEO says EVs will be sold 100% online with nonnegotiable price

#230

Post by sokoloff » Fri, Jun 03, 2022, 1:55 AM UTC

bombcar wrote: post #151

sircastor wrote: post #117

Earlier quoted context omitted.

I’ll second this from a privileged position. I own a late model Land Rover, and if I take it down to the dealer to solve something, they treat me very well and put me in a very nice lounge while I wait. It’s a first class experience. I don’t think I’d get as nice attention from a non-luxury dealer though.

Every dealership I’ve ever been to has been like that. Sometimes they’re even worth using for “normal” repairs because they will sometimes bill by the book even if the actual labor time is higher.

Every shop I’ve seen uses the book times for any standard job.

My experience is that independents are significantly cheaper on a like-for-like basis, are also more willing to do a workable partial or alternate repair, but have worse lounges and often no courtesy car. (So you’re getting something for the extra cost.)