Why this legacy brand is at a crossroads

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About a year ago, I sent my subscribers a deep dive into why car buyers and dealers are losing trust in Ford. Many of those issues are still haunting the automaker today, along with a string of new concerns that have dealers (and consumers) scratching their heads. But there are signs that the Blue Oval can turn things around. The big question is—how soon?

So, why does Ford keep losing so much goodwill with its dealer network?

1. Dealers are having issues with allocation and product mix.

As of Aug. 1, Ford dealers had an average new car day’s supply of 85 days—well above the industry average of 68 days, according to Cox Automotive. Take a look at the breakdown below to see how Ford is stacking up.

A well-known Ford dealer in Florida told me he’s oversupplied right now, especially with EVs, and the higher-ups at Ford want him to take on more every month. 

The intrigue? I’m hearing whispers that mom-and-pop shops in rural communities are getting teeny-tiny allocations for desirable models.

On top of that, Ford has been absent from the U.S. sedan market for years. While the four-door Mustang has been teased, CEO Jim Farley has ruled out a return to traditional sedans.

Ford needs help in Europe, too. Sales in key markets fell 16% in the first five months of the year, lowering its market share to 3.4%. 

• With the Fiesta gone and the Focus ending production in 2025, the only sedan in Ford's European lineup will be the Mustang. 

• In place of the sedans, Ford is launching a duo of electric SUVs that likely won't be as friendly to consumer wallets.

Zooming out: Consumers are in a tough spot right now. This would have been the perfect time for Ford to offer a lineup of sedans under $25,000. But instead, they're basically waving the “white flag” to brands like Honda, Hyundai, and Volkswagen, who can provide that mix.

2. Ford and recalls have gone hand in hand in recent years…

But it wasn’t always that way. You might remember when the automaker’s motto was famously, "Quality is Job 1.”

A catchy slogan, no doubt, but fast-forward to 2024, and the Blue Oval is continuing to come up short in the quality control department.

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By the numbers: According to BizzyCar's Q2 2024 Recall Report, Ford leads the list with over 1.3 million vehicles affected.

• Just last weekend, Ford issued a recall for 90,000 vehicles. The problem is caused by intake valves that are too hard, brittle, and prone to cracking due to the supplier's grinding processes.

• One dealer told me that with all the recalls, he’s felt the hit to Ford’s reputation and many customers (once loyal to Ford) have switched brands.

In general, car buyers aren’t very loyal, especially during the COVID-era supply shortages that force them to switch brands. Check out this graph from S&P Global Mobility to see the shift:

And it makes sense. Car buyers are really pushing their budgets to the limit, so they need a car they can count on. Recalls are a big deal, and with Ford's quality control being shaky, they’re going to keep losing customers.

Case in point: 

3. Ford dropped a bombshell in June by canceling all its requirements for dealers to become EV-certified sellers. Now, any Ford dealer can sell EVs.

But in 2022, dealers had to invest between $500,000 and $1 million—and sometimes more—to become authorized to sell EVs or go without (this was back when Ford was gung-ho about EVs). This investment included things like charging stations, staff training, and marketing support.

• A tall order to fill for sure, but many dealers signed on and shelled out major dollars and cents so they wouldn’t be left in the dust.

• One prominent East Coast dealer told me that new EVs aren't moving at all in his area, so now his fancy EV charger is just sitting there collecting dust.

Bottom line: It might sound like I’m being tough on Ford… And well, I am. But it’s because I want to see this iconic brand succeed. They’ve got the capability and a strong lineup of trucks and SUVs, like the (surprise hit) Maverick pickup and the Bronco SUV. And honestly, the new Mustang? It looks pretty sweet.

Ford’s recent shift toward more hybrids and slowing its EV push shows they’re paying attention to consumer demand, but the American market can be more challenging than other regions.

At the end of the day, Ford needs to patch things up with frustrated dealers and win back consumer trust. If they can make smart use of their global platforms and keep things consistent, there's still a real chance they’ll come out on top.

Auto tech expert: Building a marketplace for 30M monthly car shoppers
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Dealership matchmaker: Demystifying pay plans! Top trends in automotive hiring today
Finding top-tier auto industry talent is grueling. But Steve Adragna has a winning formula for easy, stress-free recruiting. I spoke with Steve, the former President of Global Auto Staffing, about the biggest trends in automotive hiring and becoming the head of CDG Recruiting, a brand new venture from Car Dealership Guy. Stream it now.

Listen to the episodes here, and subscribe to the CDG Podcast on Apple, Spotify, or wherever else you get your podcasts. And thank you to DLRdmv and Cars Commerce for making these episodes possible.

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• Volvo Cars scraps plan to sell only electric vehicles by 2030.

• Volkswagen warns time running out as clashes with workers over cuts.

• Tesla launches ‘actually smart summon’ or ‘ass.’

• Workers at GM-LG battery plant in Spring Hill, Tennessee join UAW.

• Hyundai unveils 2025 electric SUVs aiming for broader appeal.

🚨 Hey you! Before you go…

Thanks for reading. See you on the next edition…

—Car Dealership Guy

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