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Jared Hamilton
From: Jared Hamilton
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I want to speculate for a moment, and I want you to know that I have zero knowledge of franchise agreements.  This is just an exercise in "what if?".

The manufactures view dealerships as a burden.  We found that out after the government told Chrysler and GM to restructure and they decided to cut costs by cutting dealers.  But the manufacturers have always needed dealers to help them move their inventory.

Ford is using social media to roll out and create buzz for their new Fiesta.  They are at the point right now where you can log on and reserve an allocation, and to help incentivize potential customers they are offering free Sync to those that register online and raise their hands.  The leads are then given to the closest dealership (unless a specific dealership is specified) and the customer is directed to go in and work out their price (please correct me if I'm off base).  Ford will then follow up with the guest and send them updates until their car shows up.  The customer then goes into the dealership and takes delivery.

In this process the dealership is in control twice, the pricing and the delivery.  The manufacturer takes care of the rest.  How far away are we from Ford setting the price?

If you survey customers I bet the majority would say the dislike negotiation.  Most sales processes have been designed to maximize profits at the cost of customer satisfaction (I know I'm generalizing here).  Couldn't the manufacturer eliminate this and expect to see an increase in customer satisfaction?  Ford could get rid of dealerships without cutting dealerships (negative PR) and just circumventing them.  Their inventory would, in a sense, be pre-sold so supply would always equal demand.  Resale values would increase because less rebates would be needed to move obsolete inventory.  A dealership would then become a place to get your vehicle serviced and a used car store.

The big objection to this would be customers need to drive a car before buying.  If this is true then how come ebay motors is successful?  I know a guy that purchased a GT 500 on ebay.  A used high performance $40K automobile without driving it.  The upcoming generation is used to doing business online.

As I wrote earlier, I'm just speculating.  But say this is possible.  What can a dealer do?  I believe we are in for a major shift in the way cars are sold. Things are becoming more transparent.  A great post was written on the death of the desk.  Brick and mortar stores are dwindling, from book stores to insurance agents.  What will the future look like?  I see the becoming more of an experience like the Apple Store.  What about you?

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