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Australian Falcons Discuss the australian born and bred models here. Includes the 80's 90's and present day Falcons offered by Ford Oz.

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Old 10-08-2003, 10:40   #1 (permalink)
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How To Fix Ford Dealerships

Ford dealers are all knobheads !
It seems that most people in this forum agree with the above statement.
(At least those who dont work at dealerships !)

I wonder if Ford Australia offers or provides dealers - both sales and service staff that represent and maintain their product with proper, formal training.
It would go a long way to ensuring the end-to-end 'customer' experience provided in buying and maintaining a Falcon (or any other Ford) provides a high level of satisfaction, and makes the customer feel they want to do it all again in a few years.

THATS HOW YOU SELL CARS NOW AND IN THE FUTURE !

I'm afraid a good or excellent car is no use when you have sales & service staff who are pathetic smart-arse loses who think their crap doesn't stink, and who will try and rip you off at any opportunity - especially if you are young (ie..not experienced).

To fix this problem Ford MoCo Australia could do two things:

1. TAKE CONTROL OF ALL FORD DEALERSHIPS (unlikely - would cost too much).
or
2. FULLY REGULATE DEALERSHIPS BY:
* Provide compulsory proper, recognised/acredited training to any customer facing sales staff at dealerships so that they know how to treat customers / potential customers properly.
*Undertake a yearly review of their dealerships to monitor performance (sales, customer satisfaction..etc), and if their rate of customer satisfaction falls below 90%, then Ford should put them on warning. If it happens the following year then threaten to cance/remove their dealership license, and if it happens again cancel their dealership agreement.
* Provide thorough and detailed training to their service mechanics. Maybe a 3-6 month rotation of their service mechanics through the Ford factory at Geelong or Cambellfield assembly/manufacturing plants will deepen their experience and insight into how the Falcon is constructed/built. This experience would better 'equipe' the 'local' mechanics at dealership to diagnose and fix mechanical or quality related problems quickly and reliably first-time every-time.
* Provide a margin cap on new vehicle sales at dealerships so they dont try to rip-off customers. Its amazing the different quotes on prices I have been able to get from different dealerships. (None have come-down to 'my' price on a new BA. But that's o.k, I'll wait for the BAII..)
* Provide a guaranteed buy-back/trade-in value on each new vehicle sold based on model, age, condition and kilometers. This will further encourage brand loyalty and give buyers some further certainty/confidence of depreciation. This will also limit the extent to which dealers can set their margins for used cars.
(ie..why is it one dealer valued my trade-in at $14,2k while another valued it at $16k ! - because of my low Km's)


But I can tell you why Ford Australia wont do the first couple of points of option 2 either, because 70-80% of their sales are to fleets, and the interaction between lease companies (customer in this case) and Ford is very formal and done under 'business' bargaining conditions. By business I mean contract prices against volumes..etc.

The grave danger of this is that Ford is consistently exposed to the Fleet Market, meaning if the fleets, who have alot of bargaining power collectively, decide to turn "off" Fords (and begin preferencing/favouring another manufacturer ie..Holden or Toyota), then they can exert alot of pressure on Ford.
A good example of this was the AUII/III. There was no reason why the AUII/III should have sold better than it did after its revamp in 2000, but the fleet operators continued to 'punish' Ford Aus MoCo and the AUII/III for the heavy discounting on the EFII/EL, which led to very poor resale (residual) values. This was a good case of doing the right thing for Retail customers, but letting fleet/leasing companies down (who I as a potential retail customer dont give a toss about anyway ...).

A way of getting around this is to increase reliance on the local RETAIL market. This is one of the 6 conditions of Michael E Porter's Competitive Advantage theory - ensure you have strong local demand, which includes not relying on 80% of sales from one customer-segment, in this case fleets which can 'hurt' you when you try to get more competitive (price-wise).
Another way of getting away from this reliance on fleets/leasing companies is to diversify their product offerings (in Ford's case different models). Good quality small, medium, AWD/4x4, and luxury models are needed that appeal more to the retail (rather than fleet) markets. Maybe thats why were seeing the Territory, which looks as though will be primarily targetted at the Retail segment (Hhhhmm, may not be such a bad move after all... )

The leasing companies are 'cruel', and have no brand loyalty in their quest to make money from the fleets they manage, and my 'dislike' for them is equal to those idiot ford dealers.

GEOFF, GET TOUGHER ON YOUR DEALERS !
You've fixed the car, now fix your companies front-end !
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Old 10-08-2003, 12:31   #2 (permalink)
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Re: How To Fix Ford Dealerships

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Old 10-08-2003, 17:26   #3 (permalink)
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Re: How To Fix Ford Dealerships

Not the same market share as Ford, but Subaru have effectively taken direct control of all Australian retail outlets.
Long term Subaru dealers got dropped with limited notice, even though these were the same dealers who represented Subaru when they only made the 'poor mans Honda'.
Ford in the US sell directly via the web, bit hard to provide vehicle service the same way.

Last edited by supermono; 10-08-2003 at 18:43.
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Old 10-09-2003, 04:34   #4 (permalink)
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Re: How To Fix Ford Dealerships

I work in a dealership, I'm not offended by what you say. Unfortunately some of the staff at dealers have the wrong attitude and their job to them is just a source of income. I think some of these people wouldn't know what service is let alone provide it and they think they are doing you a favour by doing their job properly. I think the only thing you can do about these people is write a letter to the dealer principle of the dealership & provide some information about your experience with his staff but don't be whingey/whiney about it.
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Old 10-09-2003, 05:58   #5 (permalink)
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Re: How To Fix Ford Dealerships

Quote:
Originally Posted by supermono
Ford in the US sell directly via the web, bit hard to provide vehicle service the same way.
A very good idea, but the only two reservations I have with using the Internet is the ability to 'haggle', that is talk your way into a good discount and deal, and secondly (which you mentioned) is servicing.

To counter-act the haggling aspect, we (the customers) would save $$'s instantly on dealer margin (probably 10-12% of RRP), and dealer delivery fee (~$1495).
This could mean up to $5,500 on a base model XT.

Ford dealerships would be left with only two functions:
1. Selling used (Ford) cars - even this can be done via the internet..
&
2. Servicing.

Do you know how well Ford's sales over the internet is going in the U.S ?
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Old 10-09-2003, 07:46   #6 (permalink)
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Re: How To Fix Ford Dealerships

Quote:
Originally Posted by JamesA
Ford dealers are all knobheads !
It seems that most people in this forum agree with the above statement.
(At least those who dont work at dealerships !)
Like most generalisations this isn't correct. There are certainly plenty that fit the description but by no means all.

Quote:
I wonder if Ford Australia offers or provides dealers - both sales and service staff that represent and maintain their product with proper, formal training.
It would go a long way to ensuring the end-to-end 'customer' experience provided in buying and maintaining a Falcon (or any other Ford) provides a high level of satisfaction, and makes the customer feel they want to do it all again in a few years.
As a matter of fact, the Ford dealer training in this country is of an extremely high standard. As well as product familiarisations (read - track days) the training offered through FordSTAR is excellent both in content and presentation. However, the absorption of that knowledge is entirely down to the level of interest held by the individual and that ranges from brilliant to poor.

Quote:
2. FULLY REGULATE DEALERSHIPS BY:
* Provide compulsory proper, recognised/acredited training to any customer facing sales staff at dealerships so that they know how to treat customers / potential customers properly.
*Undertake a yearly review of their dealerships to monitor performance (sales, customer satisfaction..etc), and if their rate of customer satisfaction falls below 90%, then Ford should put them on warning. If it happens the following year then threaten to cance/remove their dealership license, and if it happens again cancel their dealership agreement.
* Provide thorough and detailed training to their service mechanics. Maybe a 3-6 month rotation of their service mechanics through the Ford factory at Geelong or Cambellfield assembly/manufacturing plants will deepen their experience and insight into how the Falcon is constructed/built. This experience would better 'equipe' the 'local' mechanics at dealership to diagnose and fix mechanical or quality related problems quickly and reliably first-time every-time.
Good suggestions but too late. All of these have been implemented.
Sales staff training is on-going both by Ford and at the dealer level.
Annual reviews are conducted of dealership performance through satisfaction surveys and other less direct methods.
Service technicians (to use the correct terminology) also receive thorough training via workshops and the Fordstar system. The better dealerships also conduct extensive internal training and are moving toward (or have achieved) Service 2000 accreditation.


Quote:
* Provide a margin cap on new vehicle sales at dealerships so they dont try to rip-off customers. Its amazing the different quotes on prices I have been able to get from different dealerships. (None have come-down to 'my' price on a new BA. But that's o.k, I'll wait for the BAII..)
I'm struggling to make sense of this statement. The margin is capped by the difference between the dealers invoiced price (which is the same for everyone) and the RRP. The differences you see in quotes are entirely based on the dealership position on how much of that margin they wish to sacrifice which can also be influenced by age of stock and other pressures.

Quote:
* Provide a guaranteed buy-back/trade-in value on each new vehicle sold based on model, age, condition and kilometers. This will further encourage brand loyalty and give buyers some further certainty/confidence of depreciation. This will also limit the extent to which dealers can set their margins for used cars. (ie..why is it one dealer valued my trade-in at $14,2k while another valued it at $16k ! - because of my low Km's)
Surprisingly the first part of this was tried with Red Carpet Options but in most instances it was the buyer who ended up screwed. It's also been tried in the fleet markets but there ends up being too much variation between cars and thus the fixed resale ends up being based on a worst case scenario. As for the question of different trade in values that is a far more complex issue than I have time to canvass here but it is the market that determines the final margin.

The issues really aren't that simple and there are dual sides to the coin.

At the dealer level there are three kinds of dealers only. Funnily enough these actually match the ranking categories used by FOA, except I'm using my own descriptive terms to replace the PC ones actually used.

Category 1: useless, unethical, sharks who would sell their own grandmothers for a jam donut but only after ensuring there was no warranty on her.
Category 2: they do try some of the time but generally fail to perform - some hope for them if they lift their game.
Category 3: good, ethical businesses who attempt to do the right thing most of the time.

Ignoring the first two (which we all should), let's take a little look at the issues facing Category 3.

They are just coming out of a 4 year cycle where new vehicles have been extremely difficult to sell at anything like business sustaining margins. The sales staff are either all new thanks to high turnover or badly demotivated by the tough times. Because the new car showroom and overheads swallow a large slice of a dealership budget they are all under pressure from the dealer management to perform. Into this we can add a company (in FOA) that are inconsistent in their approach to dealers, who frequently deliver information after everyone on FF knows it and who continue to reduce dealer margins at the same time as they expect higher standards of service, presentation and sales integrity.

I could go on for hours but I won't.

My point is simply this - it is a far more complex issue than can be resolved with a few simple decisions. Fundamentally the system as it stands is far more a battle between FOA and the dealers than a partnership and until the core issues are tackled then it is likely to stay that way.
Ford KNOW who their bad dealers are but there is a reluctance to take action against them even though the master franchise agreement allows Ford the power to do so. Attempts such as the RJV have proven to be strokes of somewhat less than genius because they are either half hearted or fail to meet customer expectations.
Sooner or later the bullet must be bitten. I am sure that the glass house knows this but only time will tell if they have any real balls to deal with it. Even if they do, there is a need for them to get their own house in order before there is any real chance of a satisfactory re-engineering of the sales cycle.

Cheers
Russ

Last edited by russellw; 10-09-2003 at 19:31.
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Old 10-09-2003, 09:24   #7 (permalink)
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Re: How To Fix Ford Dealerships

Russell,
A damn good response from someone who is obviously in the know about the issues between FOA and the dealers.

Its amazing that Ford KNOW who their 'poor' dealers are, yet do nothing about it.
The loss of potential sales is completly obvious, yet no-one does anything.

In return (as you have clearly stated), this puts more pressure on FOA, who in turn pass this down to dealers. Its a vicous repeating circle.

Well, knowing that the FOA CEO visits this site regularly, the ball is in his court.

GEOFF, SAVE US FROM OUR DEALERS !
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Old 10-10-2003, 04:08   #8 (permalink)
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Re: How To Fix Ford Dealerships

I figured that this was worth a more detailed look so now that I have a bit more time, here goes.
There are really three groups of people involved in this with partially conflicting goals - the best way to review this is to take a look at those groups.

Ford Australia / FPV

In their ideal world they would have complete control over the dealer network, which would be full of motivated, ethical and customer focused individuals who sold lots of cars at minimal margin.

The reality check provided by the (failed) Sydney RJV (retail joint venture) has probably sent home the message that running dealerships is not something that Ford should be doing, no matter how good the idea seems in theory.

Consequently, FOA are left with the compromise situation that is the present franchised dealer network system. This large group (300 odd from memory) is represented by a dealer council that meets with Ford on a regular basis in an effort to resolve various issues. As market situations change, the power in that forums swings back and forward between the dealers and Ford and most of the time the forum is in a state of undeclared war.

On the positive side, Ford has made big gains in the training end of the dealer relationship for both sales staff and service technicians although a quick glance through a few threads here will tell you that there is still a long way to go. Some of this comes down to the individuals selected by dealerships as sales / technical staff whilst some more can be blamed on the dealers own lack of committment to staff training while some (dealt with below) is down to the customer.

All of the points raised by JamesA about the fleet market are valid ones. It is a major source of evil for the entire industry but necessary for the volume sales it generates.

So what can Ford do?

1. Having identified the weak points in the delaer network these need to be removed ASAP. Difficult under the franchise arrangement but not impossible.
2. This will probably lead to a reduction in the size of the network which might well assist with the problem of dealers cutting each others throats for a deal. If you think that's a bad thing then you need to read further to see why it's not.
3. Provide a consistent, percentage based approach to vehicle retail margins to ensure that delaers can achieve the same result from selling any model in the range. This is particlarly so with FPV product as the present situation actually creates a disincentive for delaers to sell them.
4. Continue their investement in training but change the testing strategy that is currently used where tests are conducted at the conclusion of training to one where testing is conducted a few weeks later. This might ensure that the knowledge gained lasts more than 10 minutes.
5. Provide more advertising support for the product.
6. Get serious about removing service accreditation from dealers who don't achieve Service 2000 standards in their service centres AND raise public awareness about the certification.
7. Get serious about handling customer complaints related to the dealer network. As I've said before, the excuse "we have no control over the actions of individual franchised businesses" line might well be half true but it wears a bit thin. The reality is that the dealer network is the public face of Ford and a pretty ugly one in many cases. That makes them the responsibility of Ford and no one else.
8. Start talking to the dealer council and the successful dealers about marketing strategies - funnily enough the people at the coal face do have some clue.
9. Related to the point above, sack the idiots who come up with stupid ideas like lifestyle pods, who envision dealerships as wide open showrooms untroubled by the presence of more than a few token cars. Or take their drugs away.

Dealers

In their ideal world, every car would be sold to happy customers at full margin and they could run their businesses as they saw fit.

The reality is somewhat different. Margins are dictated by both Ford and the market. There will always be good and bad customers as they are simply a reflection of human nature and there will always be Ford dictated requirements as to how a dealership is run.

The primary motive for running a dealership is the same as for any other business - to make a profit - but this goal is often at odds with the customer requirements dealt with below.

As stated above, training of all dealer personnel is a key factor in ensuring good product and technical knowledge which in turn should improve customer satisfaction ratings, yet training costs money which reduces profit.
The good dealerships make this investment as they understand the longer term value of that investment - the bad ones don't and won't. Staff retention is also an important issue - there is little to be gained from training personnel if they are simply going to leave and let somebody else benefit from the training investment.

So what can the dealers do?

1. Invest in training and staff retention strategies.
2. Weed out the poor sales or service staff - these can easily be identified by conducting their own customer satisfaction surveys either by phone or survey form.
3. Ensure that the presentation of the dealership is maintained at a high level.
4. Obtain and maintain Service 2000 accreditation. This ensures that facilities and training standards are of a high standard.
5. Have a properly documented and adhered to strategy for dealing with customer complaints and disputes.

There's no magic wand for the dealers. It's a hard balancing act but for those who find it, the rewards are there.

The Customer

In our ideal world, we'd buy cheap cars with outstanding build quality from dealers who met our every need.

The reality here is that we are the biggest part of the problem in many ways. It is our demands for lower prices and our habit of shopping round a deal that sees the dealers cutting margins to win our business and whatever we might like to believe that is NOT a good thing. Why? Because all of that reduction in margin has to lead to cost cutting in the other areas that we actually profess to want - like good service, professional and trained staff etc.
I've said it before but the harsh fact is that we can't have it both ways. It's an old adage that if you pay peanuts then you get monkeys and in essence that is what we are trying to do. If you aren't prepared to leave your dealer with a fair margin then you can hardly expect them to retain skilled and trained staff or top notch facilities. This forum is full of people who consider getting a lower price a "win" against the dealer in what can only be described as an adversarial relationship but it's really a loss if you place any value on the qualitative aspects of the sales/service experience.
It goes further than that though. As customers, when we shop our deals around, we are not building a relationship with our dealers yet we expect them to provide us with standards of service that befit loyal custom.

Perhaps the comment "SAVE US FROM OUR DEALERS" should really be "SAVE US FROM OURSLEVES".

SO what can we do??

1. Select our dealership based on the quality of their service personnel / facilities rather than on price alone.
2. Acknowledge their right to a reasonable margin.
3. Develop a relationship with the dealership personnel.
4. Show some loyalty - it does have benefits.
5. Insist on high standards and complain loud and long to anyone who'll listen when they aren't forthcoming.

Conclusion

This still is by no means a comprehensive discussion of the issues as there are many others that I haven't canvassed. It does, however, highlight the fact that all the parties to the new vehicle deal have to consider their positions if the situation is ever to improve and that includes us as the paying punter.

Food for thought anyway.

Russ

Last edited by russellw; 10-10-2003 at 04:21.
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Old 10-12-2003, 08:31   #9 (permalink)
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Re: How To Fix Ford Dealerships

hmmm...and as an addition to all the above stuff, maybe Ford Australia could get off their arses once in a while and provide better post-production support of the vehicles they manufacture instead of expecting dealers to cop all of the face-to-face shit that goes on when things go wrong under warranty.

Just the little things like having driveline balancing units readily available (instead of subject to a five week wait) might be a start...after half-a-dozen visits, a gearbox, two tailshafts and about eight months to fix a driveline vibration the only respect I have is for my dealer having the tenacity to keep hassling the factory.

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Old 10-14-2003, 00:26   #10 (permalink)
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Re: How To Fix Ford Dealerships

To me, the major issues are the degree of "shafting" experienced through the sales and servicing departments.

It is clear that honesty is not a top priority for many dealership individuals in these areas, which is understandable (but not excusable) in a sales role, but not so in a service one.

Essentially, it is down to the individual at the dealership to provide a level of integrity, and ultimately, that is always going to be exceptionally hard to train for, let alone to police.

I feel that Ford really must shift its focus on dealerships to push a hard line of integrity - and this will only come about when dealership teams begin to give a shit about what they are selling, and to who they are selling to. Simple really!
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