Unlike cross-town rivals Chrysler and General Motors, Ford says it does not plan to abruptly and extensively reduce the size of its dealership network. Down to 3,700 outlets nationwide, Ford’s North American sales chief says that the automaker will probably benefit from the extensive closures currently under way at Chrysler and GM.
“It really depends on how GM and Chrysler handle these orphan owners,” Ford’s Jim Farley told the Detroit News . “If they don’t give them a lot of attention, it will result in consumers going to other brands.”
“It seems very abrupt and unplanned,” he said about the Chrysler dealership closures. “You don’t orphan 4 million customers overnight without some fallout.”
Chrysler is in the process of shutting down nearly 800 of its 3,200 dealers as it tries to quickly emerge from bankruptcy and GM plans to cut its dealership count to about 3,600 stores by fall of 2010.
Ford ’s dealership count was around 4,500 in 2005, but slow cuts since have dropped that number to the current 3,700. The Dearborn, Michigan, automaker is still trying to reduce its dealership count – just at a lower rate than GM and Chrysler. Ford is taking advantage of every opportunity to cut costs that Chrysler and GM are – just less publicly as it is not receiving federal funding.
Many analysts expect liquidation pricing at GM and Chrysler as the automakers try to clear out excess inventory. About 44,000 Chrysler vehicles need to find homes – either at other dealerships or in consumers’ garages – as a result of the 789 dealerships the automaker is closing in the next six weeks. GM is planning to cut more dealers at a slower rate, but it is also dropping at least one brand and planning to sell three, meaning its inventory levels will need to drop substantially, too.
Farley says that Ford won’t match any “super sale” pricing, however.
