Ford CEO Jim Farley has continued to advocate for a switch to non-negotiable fixed pricing in the US, but the brand’s Australian division says it does not plan to change its business model – for now.
Ford Australia has reiterated it does not plan to switch to non-negotiable fixed pricing for new cars locally, despite the brand’s global CEO pushing for its US division to make the change.
Last week, Ford CEO Jim Farley told the Associated Press the auto giant “will go to non-negotiated vehicle prices” in the US, though the executive did not say when fixed pricing would be implemented.
Despite this upcoming switch in the US, a statement from Ford Australia said it has no plans to follow the overseas division by adopting non-negotiable fixed pricing.
“We have no plans to change our sales model, but we’re always exploring ways to give customers more options in their shopping experience,” the statement said.
“For example, we opened online reservations for the Mustang Mach-E a couple of weeks ago, as a natural part of our digital evolution and a way for our customers to shop with their Authorised Ford EV Dealer 24/7.” However, the Ford Australia online ordering process for the Mustang Mach E electric SUV did not translate to a fixed-price sales model.
Ford Australia has consistently ruled out non-negotiable fixed prices since September 2020, when local CEO Andrew Birkic said: “We have no plans to move to an agency model, and see our dealers as vital to the success of the Ford brand, and an important touchpoint for customers to experience our brand.”
In June 2022, Ford Australia ruled out introducing non-negotiable sales locally – despite global boss Jim Farley describing a potential move to fixed prices in the US as “the most exciting land grab in our industry since the Model T”.
In September 2022, Ford’s head international markets executive, Dianne Craig, reiterated the company’s earlier comments, telling Drive: “Regardless of franchise laws, or some of the other limitations … our dealers really are our competitive strategic advantage.”
In January this year, reports from Germany claimed Ford of Europe is preparing to downsize its dealer network and shift to fixed prices in the coming years, starting with the Netherlands in 2024 and followed by Germany in 2025.
In Australia, Honda and Mercedes-Benz have to date been the only car-makers to switch to fixed pricing – also referred to as the agency model because the dealers are selling agents that don’t own the stock – in July 2021 and January 2022 respectively.
While Mercedes-Benz sales fell by five per cent year-on-year from 2021 to 2022, Honda Australia posted its lowest new-car sales on record after the change – reporting a 19 per cent sales drop and a market share of less than two per cent.
Between January and the end of April 2023, Ford held a 6.9 per cent market share in Australia – the fourth-highest of any car-maker – with 24,178 cars reported as sold, largely attributed to the Ranger ute (17,297 sales).
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