Welcome to another edition of Inside Automotive with anchor Jim Fitzpatrick. Joining the show is Don Hall, the President and CEO of the Virginia Automobile Dealers Association. Today, Hall shares his thoughts on Ford CEO Jim Farley’s recent comments regarding the future of the franchise dealer network.
While speaking at the 2022 Alliance Bernstein Strategic Decisions Conference, Ford CEO Jim Farley stated, “We got to go to non-negotiated price, we got to go to 100% online. The vehicle, there’s no inventory, goes directly to the customer, 100% remote pickup and delivery. But then we have this opportunity to use our physical presence to outperform [competitors].”
Hall believes that even though manufacturers are making these announcements, franchise dealers are more committed to selling cars and creating exceptional experiences. Henry Ford himself started the franchise dealer system, and it is the only reason Ford, and many other OEMs, still exist today, he adds. Hall is determined to prevent any actions by OEMs that would erode the franchised dealer system. There’s no doubt that Tesla envy is fueling many of these moves from OEMs. However, Hall explains that trying to emulate Tesla is a massive mistake.
“This is one time as an industry we must pull together. We will not win the fight to preserve the franchise system thinking we can go out on our own, and do our own thing,” says Hall.
The one thing that should, and does, make a difference is your Association and its ability to pass legislation that can slow down, adjust, or even stop these initiatives from OEMs. Ultimately, it is the consumers who benefit from the franchise system. Dealers give customers the best opportunities to make the right deals for themselves. For the sake of protecting consumers, Hall says the industry must protect the franchise system. There is no middle ground, he adds. There is no negotiating when it comes to agency agreements.
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