Ford to shrink European retail network in agency shift

Ford dealership forecourt 2021

The shift to the agency model means Ford’s European retail network will shrink

Ford takes control of pricing and customer relationship; European retail network will shrink

Ford will adopt the agency retail model across Europe over the coming years, beginning with a trial in the Netherlands in March. 

The American brand is embarking on a ground-up overhaul of its European business operations as it electrifies its product line-up.

The unveiling of a US-influenced but Europe-focused electric crossover in the coming weeks – before it enters production later this year in Cologne, Germany – will be a significant step towards achieving this transformation.

On the retail side, Ford is looking to adapt the way it interacts with customers, and Autocar can now reveal that it has finalised plans to move to an agency model, following the likes of Polestar, Volvo, Mercedes-Benz and Jaguar Land Rover. 

Ford of Europe boss Martin Sander said the move ties into a plan to promote consistency across its regional operations: “What we definitely can improve on is consistency: consistency in our positioning, consistency in our messaging across everything we do. Not only a bit here and there but across everything we do: point of sale, product, marketing materials, short-term and long-term product strategy… Consistency: that is what we have to build on.”

Speaking exclusively to Autocar, Sander gave details about how Ford plans to adapt its retail model in line with these efforts: “Agency is definitely the way to go. We’ve decided that we are going to switch to the agency model in Europe over the next years.”

“This is nothing you can do overnight in the whole of Europe,” he added, confirming that the first agency site will open in the Netherlands in March. He gave no further indications of a timeframe for when the rest of Ford’s European retail network will follow suit. 

Agency sales will effectively give Ford a direct relationship with its customers, enabling it to give dealers a fixed handover fee per car instead of letting them run the sales process themselves.

No doubt Ford will also look to revamp its online sales platform with a focus on providing a click-and-collect service in the vein of DS and Genesis

“It’s a big change in terms of processes for us, in terms of IT for us – but also a big change in terms of role, responsibility and behaviour for our retail partners, which will still be there as agents. I think that’s very important,” said Sander.

“On the invoice, it will say Ford, not the retailer any more, but we of course will have agents – today’s retailers – covering the country and looking after the customer on site, in their communities. It’s just a different way of interacting. Today retailers, in the future agents and our customers.”

Sander added that this process will mean the company’s European retail network will shrink – but that this is also a consequence of changes in consumer habits and vehicle maintenance demands. 

“We see that more and more customers want to buy online: just click and buy or lease a vehicle. But we also expect, because of our switch to electric vehicles, that service revenue might go down in the long run,” he said.

“In the short run, there is still a large car parc of ICE vehicles, but in the long run, the business potential in the service area will go down.”

Sander wouldn’t give a more precise indication of how many sites could close but said it would vary according to each specific market: “We have to make sure that we are adjusting the size of our network appropriately so that we have a profitable number. We need our retailers and our agent partners in the future to make money if we want them to deliver excellent customer service.”

Source: Autocar

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