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

#361

Post by coryrc » Fri, Jun 03, 2022, 4:17 AM UTC

thaeli wrote: post #317

toomuchtodo wrote: post #190

Earlier quoted context omitted.

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…

Is there really that much service revenue for modern ICE cars that isn't stuff BEV cars need too? Modern powertrains are pretty bulletproof, 10k oil changes and 30k air filters will get you to 100k miles. "Tune ups" aren't really a thing anymore either, especially in the first 100k. Brakes? Maybe you're cutting out one or two pad slaps in that 100k. Oil changes? Yeah, you've eliminated those, the lowest margin servic…

They don't make their service revenue primarily from brand new cars, for the obvious reasons you've stated. It's when the timing chains, water pumps, head gaskets, piston rings, clutches, etc break, or the preventative maintenance to keep them from breaking (Audi timing chains, 10x $$$ if you don't replace them on schedule because of the interference engine), including the regular fluid flushes, battery replacements, air filters, etc. 80% margins on the little things add up :)

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

#362

Post by imroot » Fri, Jun 03, 2022, 4:17 AM UTC

wumpus wrote: post #144

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…

One commonly said counterpoint is that having independent dealers means you get better warranty service. Here's how it works. I had a Subaru, and Subaru had a problem for a decade+ that their head gaskets were tissue paper and frequently failed. So I had one free replacement mid-warranty. I went in just after the warranty expired for a normal service and lo and behold, the head gasket was bad again. The dealer replac…

Dealers have almost wide latitude about submitting and getting paid for "good will" warranty claims, as long as they don't abuse it.

Sometimes manufactures will direct dealers to fix things that are long out of warranty when weird things happen (like in Seattle when that radio station sent out a bug that bricked the radios over RDS -- the manufacture directed the dealerships via a service memo to replace the radios and bill the manufacture).

Service is a decent part of most dealerships these days, and a good amount of that income is driven from warranty claims.

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

#363

Post by Victerius » Fri, Jun 03, 2022, 4:21 AM UTC

walrus01 wrote: post #66

taeric wrote: post #50

Earlier quoted context omitted.

Local profit? That is, in many towns, my understanding is that the local dealerships are relatively well off. Which implies that a bit more of the money is kept local to where the cars are being sold. I'm guessing this is less true today than in years past.

In many small to medium size towns if you find the family who owns the local ($BRANDNAME) dealership they are often among the wealthiest people in the entire county. edit: I can see from the two other comments here alongside mine that this is a common observation.

Okay, I'll bite. How do I open a dealership?

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

#364

Post by ericlewis » Fri, Jun 03, 2022, 4:24 AM UTC

yourapostasy wrote: post #336

zorak8me wrote: post #324

Earlier quoted context omitted.

Re: bestbuy “showrooming” issues, I think they actually figured out how to make it a value driver for them, whereas it killed others. It’s a great place to look at products, and they price match so you can walk out the door with the product instead of waiting.

> ... and they price match so you can walk out the door with the product instead of waiting. I would love to see the behind-the-scenes numbers crunched on that model. I don't see how that model works long-term unless the percentage of customers in the showroom walking out the door with online price-matched goods is a relatively small group, or they're successful up- and cross-selling on gonzo margin goods and service…

I've known people who work at Best Buy and they get their products substantially cheaper, just as the online retailers do. There is some level of bake in for storing it at the store... but not really much different from sitting in an amazon warehouse for instance, most best buys have large warehouses in the back you'd never be aware of. Many people aren't aware of the price matching nor take advantage of it, they also sometimes will "confirm" the price match, so you can't really fake them out. And you end up browsing whilst they do the price match + grab the product from the back.

Long term sustainable simply because they've already baked it in and it's less widely known amongst the typical consumer and its honestly kind of a hassle, people pay for convenience.

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

#365

Post by ericlewis » Fri, Jun 03, 2022, 4:26 AM UTC

medler wrote: post #215

happyopossum wrote: post #189

Earlier quoted context omitted.

> This article takes an off-the-cuff comment from the CEO of Ford and reads too much into it IMO. How does it ‘read too much into it’? He literally says they need to go to a 100% online order, no inventory, no negotiation sales model. That’s a HUGE a change from today.

I just think it’s an off-the-cuff comment and he probably didn’t mean it. He’s not announcing a new change in the way they do business. My read is that he’s generally saying he wants Ford to be more like Tesla. It’s not clear if any of his suggestions are even legal, given the laws in most states against direct sales (in some states there are special exemptions just for Tesla).

I don't think CEOs of public companies are allowed to say things that they don't mean, seems like the SEC would be up their butt about that that. His suggestions are perfectly legal if executed in a legal way, which they have started to do with Ford Blue split.

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

#366

Post by reustle » Fri, Jun 03, 2022, 4:32 AM UTC

dnndev wrote: post #241

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.

I would rather they pickup my car fix it and return it. To me that is luxury. Forcing me to go to your location and waiting on you is not convenient.

That is most certainly also an option, but likely a bit wasteful and much more time consuming if it’s a small issue.

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

#367

Post by alexb_ » Fri, Jun 03, 2022, 4:32 AM UTC

skolos wrote: post #357

heavyset_go wrote: post #314

Earlier quoted context omitted.

Unfortunately, manufacturers' interests are often not aligned with retail customers' interests. For example, with Tesla, the company optimizes delivery numbers of cars sold by sacrificing quality control, and their service center model is anemic and almost an afterthought, especially when it comes to addressing the QC issues their customers experience. For every Tesla with 400k miles on them with a few thousand dolla…

> the company optimizes delivery numbers of cars sold by sacrificing quality control How do you know this? Did you see their internal data? There are lots of anecdotes going around about Tesla's quality. However, with all the TeslaQ it is hard to believe that there is real correlation between anecdotes and data. Here are my anecdotes - I owned 6 Teslas over last several years. Not one of them had any QC issues. I had…

>I owned 6 Teslas over the last several years.

??????? Why on earth would you need this many Teslas? Maybe if you are buying so many teslas then it makes sense why you don't need them serviced - you barely give them enough time to wear themselves out!

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

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Post by JasserInicide » Fri, Jun 03, 2022, 4:33 AM UTC

sammalloy wrote: post #196

cbhl wrote: post #183

Earlier quoted context omitted.

I'm under the impression that the service part of the dealership _is_ the profitable part -- the car sales are more-or-less break-even after the monthly sales bonus incentives, which is why the dealer does the two-part "let me check with the guy in the back" and then "now that you've agreed to a price, you can talk to the guy in the back who will play 'good cop', explain things in plain english, and then try to upsel…

> 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.

And what will you do when Toyota/Honda do the same thing as Ford/Tesla? Looking at things now, it looks like it's how things are going

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

#369

Post by devy » Fri, Jun 03, 2022, 4:33 AM UTC

medler wrote: post #351

user3939382 wrote: post #326

Earlier quoted context omitted.

> This article takes an off-the-cuff comment from the CEO of Ford and reads too much into it Ford announced 3 months ago that they were forming a new corporation, Ford Blue, whose purpose is to skirt state dealership laws in order to lawfully sell these EVs direct to consumers. So this is definitely not just a comment. https://www.freep.com/story/money/cars/ford/2022/03/02/ford-...

I’m skeptical that this reorg will allow Ford to sell direct to consumers, and I haven’t seen any reporting saying that it will. Notably, Ford has explicitly said they’re not doing that: “We’re not keeping dealers in the mix 'for the moment.' We are betting on dealers for the long term. I want to make that really clear. I’m not mincing words. We will have new standards and a new experience. But we learned a lot by wa…

> Maybe going direct is the secret plan, but I don’t see how they get there.

Yeah, the dealership and the state level dealership associations aren't going to go out of business without some good fight. Even though I personally don't like the markup to be paid at the dealerships, but they exist for some good reasons: educate the consumers, financing, DMV paperwork and most importantly service your vehicles. EVs need much less service visits but when they do - it's likely harder for DIYers to tinkle with High Voltage battery systems and/or the infotainment firmware diagnostics and updates.

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

#370

Post by bhauer » Fri, Jun 03, 2022, 4:33 AM UTC

skolos wrote: post #357

heavyset_go wrote: post #314

Earlier quoted context omitted.

Unfortunately, manufacturers' interests are often not aligned with retail customers' interests. For example, with Tesla, the company optimizes delivery numbers of cars sold by sacrificing quality control, and their service center model is anemic and almost an afterthought, especially when it comes to addressing the QC issues their customers experience. For every Tesla with 400k miles on them with a few thousand dolla…

> the company optimizes delivery numbers of cars sold by sacrificing quality control How do you know this? Did you see their internal data? There are lots of anecdotes going around about Tesla's quality. However, with all the TeslaQ it is hard to believe that there is real correlation between anecdotes and data. Here are my anecdotes - I owned 6 Teslas over last several years. Not one of them had any QC issues. I had…

> Not one of them had any QC issues.

Same in my experience, though it's not as extensive as yours.

It's surprising how often you see negative anecdotes about quality control amplified as representative of a larger trend. It often seems there is an agenda compelling many to work so hard circulating negative opinions.