Ford to cut 180 dealers
13 February 2020
Ford, the UK’s largest car brand, is expected to cut almost half its 400-strong network over the next four years in a bid to improve network profitability, according to Auto Retail Agenda sources. The move would mean a reduction of 180 dealerships.
Ford will reveal a network overhaul at its investor conference on 26 February.
Denying Ford was planning a “big cull of the network”, managing director Andy Barratt told Auto Retail Agenda no franchise holders would be forced out. However, when asked when asked how big the network would be in two to three years’ time, he said: “As you’ve seen our network has been shrinking over the past few years and this will continue at about 30 dealers a year. And we have a plan that allows every single person to maintain their relationship with us, if they want to.”
Despite this claim, Ford has refused to deny that it has a plan to go from 400 retailers now to around 220 by 2024.
Ford currently has the largest franchised network with just short of 400 new car sales points. The next largest network is Vauxhall with 276 points, itself in the middle of a reorganisation which should see it end up at around 260 sites.
Ford has seen average network profitability and car parc shrink steadily over the past four years.
Speaking at the launch of the Ford Mach-e full-electric car, which will only be sold online, Mr Barratt said the reduction in sites would come from the smaller satellite sites and not from the newer FordStores.
Mr Barratt was keen to point out that one route for smaller retailers to continue was as approved repairers.
He added: “The reality is, our network size is coming down. As is everyone’s has been. So we’re just a smidge under 400 retailers at the moment.
“So it’s been coming down naturally. We are very rare that we are a two tier dealer network still. That is closing because it’s that second tier that is primarily historically leaving the network. That’s been coming down. A lot of that is you look at, they tend to be smaller, more rural businesses in prime real estate because the dealership has been there 60, 70 years. And in a lot of cases, no family succession, because children have seen how hard parents work don’t want to go into the family business or there is just no succession. They’ve got to the end of the line.
“So they’re making choices based on the alternative offers that they are seeing for their real-estate, which in many cases is quite significant. I mean to have a viable dealer network going forward, we’ve got to have more throughput through individual sites. We’ve got to reduce the variability between sites, so it’s consistency, et cetera. And we’ve worked with external consultants to work on that model to make sure we have the right level of coaching skill, process and throughput. And that’s something that’s happening every franchise everywhere.”
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