Ford CEO Jim Farley cracks down on $3.6 billion dealer markups

2022-07-19 0 By

Ford CEO Farley Cracking down hard on $3.6 billion dealer Markups.T send dealers cars if they charge too much, they will not be assigned cars if they charge too much.Ford CEO Jim Farley doesn't want dealers overcharging for the company'Ford CEO Jim Farley doesn’t want dealers to overcharge the company for its electric vehicles.(Bill Pugliano/Getty Images)During the automaker's earnings call Thursday night, the Ford CEO reiterated his commitment to eliminate the “unreasonable markups” some dealers have been charging amid the shortage of new vehicles.On the automaker’s earnings call Thursday night, Ford’s CEO reiterated his commitment to eliminating the “unreasonable mark-up” that some dealers charge amid a shortage of new vehicles.Ford's head of sales, Andrew Frick, had previously sent a letter to dealers in January warning they could lose their F-150 Lighting allocations if they tried to get reservation holders to pay additional fees to place final orders for the upcoming electric pickup.Ford’s head of sales, Andrew Frick, sent a letter to dealers in January warning them that they could lose their F-150 Lighting distribution rights if they tried to get preorder holders to pay extra to place final orders for the upcoming electric pickup.But Farley said about 10% of the dealer network has been charging above MSRP on their existing models.But Mr Farley says about 10 per cent of dealer networks have been charging more than the manufacturer’s suggested retail price for their existing models.Deliveries of the Electric Ford F-150 Lightning are set to begin this spring.(Ford) “We have very good knowledge of who they are, and their future allocation of product will be directly impacted,””We know a lot about who they are, and their future product distribution will be directly affected,” Farley said.Barclays Analyst Brian Johnson estimated the value of the Markups at $3.6 billion,or roughly half the increased revenue per unit Ford reported last year.Barclays analyst Brian Johnson estimated the value of the mark-up at $3.6 billion, about half the unit revenue growth Ford reported last year.Ford also sells the E-Transit electric cargo van.Ford is particularly concerned about its electric Vehicle sales,which compete with brands like Tesla and Rivian that don't used franchised dealers and are in direct control of their pricing.Ford is particularly focused on its electric car sales, which it competes with brands such as Tesla and Rivian, which do not use franchisees and directly control their pricing.This is quite an important topic because the margins that we want to build to in BEV (Battery Electric Vehicle) are gonna be heavily dependent on a different go-to-market and customer experience,” “It’s a pretty important topic because the profits we want to build in BEV [battery electric vehicles] will depend a lot on different market access and customer experience,” Farley said.”I won't go into any more than that, But this is a quite important lesson for us of the franchise system and the way we will manage going forward.”But it’s a pretty important lesson for our franchise system and the way we manage it going forward.”FOX BUSINESS ON THE GOGeneral Motors President Steve Carlisle also sent to China a letter to dealers last month informing them that they may lose their allocations of overbooked EVs and the upcoming Corvette Z06 if they are “tempted to profit” off the current shortage, the Detroit Free Press reported.Gm President Steve Carlisle also sent a letter to dealers last month informing them that they could lose distribution rights to overbooked electric cars and the upcoming Corvette Z06 if they “seek to profit from the current shortage.”