The Ford Bronco situation, despite production issues being addressed and trucks rolling off the line, is still a complicated one. Dealers and consumers alike are still marking up and reselling trucks, at least one unit has been delivered with a manufacturing tool from the factory still hooked up to it, and despite some pre-order customers getting their Broncos at MSRP, many early reservation holders are reportedly still stuck in purgatory with their orders in limbo.
This is a problem that one Ford dealership sought to address, and as a result, consumers have been allegedly flocking to it. The particular franchise has requested to remain anonymous to avoid retribution from the Dearborn automaker itself, but what it’s been doing is both smart and, so far, effective. It’s been able to deliver trucks to order- and reservation-holders below invoice, a practice which it considered risky, but which would eventually pay off. That’s all set to change, though, as reputable Bronco forums claim that Ford’s method for allocating Broncos has been altered, and a dealership employee says the move is going to hurt those who want Ford’s latest and greatest 4×4 the most.
The situation started back when the Bronco was first unveiled in July 2020. The Blue Oval, pivoting from a more traditional dealership sales model, said that if you reserved a Bronco and converted that reservation into an order, you would get priority.
“Ford said, hey we’re gonna fulfill all reservations and pre-orders before we build stock units,” an employee from the Ford dealership in question told The Drive. In a nutshell, stock for dealers would come second, and the enthusiasts—the people who wanted a Bronco ASAP—would come first. To support this notion, Ford unveiled an allocation model that rewarded a higher rate of reservations. This got the gears at this dealership turning, a dealer employee told us.
According to information provided to The Drive by the dealership employee and supported by posts on the Bronco6G forums, Ford reportedly allocated Broncos as such: 25 percent of allocation was decided by the dealership’s share of national sales, 25 percent was decided by market area responsibility (how many potential customers the dealership served) and, vitally, 50 percent was based on a snapshot of the total reservation holders a dealership had. This snapshot was taken back in September when the dealership in question allegedly had roughly 600 reservations to fill, according to the dealer. (For some perspective, Ford sold 3,396 Broncos in September, so 600 trucks is a big number.) In theory, if Ford held up this enthusiast-friendly allocation model, this meant that people who reserved or ordered Broncos from the dealership would get them sooner. And from the dealership’s perspective, more reservations meant more allocation, and more allocation meant more sales.
For some context, the franchise in question’s share of national sales and its market area responsibility is, according to it, relatively low, so you can see why it wanted to boost its reservations with the previous allocation model. As such, it decided to attract as many reservations and orders as possible. One component of that was promising that its customer-ordered Broncos would be sold at below invoice. This is not just a nice thing to do, it’s good business. The dealer would end up having sold more units than its competitors, its national market share would grow, and its allocation of Broncos would be higher for the following years.
Now that the model has allegedly changed, the dealership—as well as its customers—are in a tight spot. Vitally, that 50 percent of the allocation based on reservations has been cut in half to just 25 percent. The remaining three quarters have reportedly changed as well.
“[The remaining] 50 percent is the share of national sales, and 25 percent is the share of Bronco Sport sales,” the dealership employee told us. That means that all of a sudden, 75 percent of its allocations are much harder to get a handle on. As a small dealership, its national sales are considerably less than franchises located in, say, a major metro area. The Bronco Sport detail throws a wrench in things, too. Ford sold more Bronco Sports in September than the Escape it’s based on. That’s due at least in part to a better stock situation for the company’s “C2” platform-based Bronco, as a Ford representative told us last week. It may be that the Blue Oval is trying to leverage the product it has in relative abundance, and reservation allocation may have been the easiest thing to take a bite out of in order to facilitate this change in strategy.
This change in strategy is obviously set to be trouble, though. The dealership in question allegedly had 600 pre-orders and reservations back in September. Now it’s reporting over 1,000, and its allocations have seriously declined. Even if it gets hundreds of Broncos a year—it reportedly got less than a dozen in the first month of MY2022—it could still be a long while before reservation holders get their trucks. “We’re gonna get 120 to 200 [Broncos] this year, and last year in six months we got more than that,” the dealership employee told us. “In my opinion, they are reverting to the traditional allocation system to the detriment of the consumer.”
To be clear, this change will likely affect some dealerships more than others. Franchises that have fewer reservations, more overall sales volume, and sell more Bronco Sports have the potential to get more stock, while those who found the enthusiast-focused reservation and order model more appealing will likely suffer; dealers like the one we’ve been speaking to. “We’re still gonna get more than we deserve, a ton of allocation… but you’re telling our customers that you’re gonna have to wait potentially years because they chose the wrong dealer,” the employee said.
For the record, Ford’s very own CEO, Jim Farley, has been a proponent of this promise to the consumer, at least as a concept. Speaking to Reuters back in August, the executive said “We are really committed to going to an order-based system and keeping inventories at 50 to 60 days’ supply.” As such, Ford used a similar reservation system to the Bronco for the F-150 Lightning. This change in strategy for Ford’s ultra-popular 4×4 presents some questions for those who want to be first in line for an electric F-150, though.
And that brings us back to what’s going on with this dealership, and how the consumer is potentially suffering from a possible altered sales strategy. Remember; the reservation holders this franchise now represents wanted to do business with them in the first place because of shady actions from other dealerships and a lack of effective communication from Ford.
This shouldn’t have to be said, but it’s not the consumer’s fault for wanting to cooperate with a transparent dealership that offers a discounted price. If the franchise does indeed get just 200 Broncos a year, it could take several years before all of the orders they’ve received are filled. In an attempt to get their vehicle sooner, these customers are effectively being punished.
We’ve reached out to Ford for comment on its altered allocation strategy, but we have yet to hear back as of publication.
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