Ford goes bloody, but for good reason | Rare Techy
On the face of it, Ford narrative dealers must spend more than $1.3 million to join the new program so they can sell electric vehicles seems, well, nuts.
These are franchised dealers whose sole reason for doing business is to sell Ford vehicles. That’s what they do. Now they have until December 16th to decide whether to pay extra for selling EVs? That seems crazy until you think about where that money is going: their own stores.
Mirroring a similar plan in the United States, there are two membership programs for Canada’s 440 dealers to consider. Both start in 2024 and are tiered, like you might find with Spotify or a membership at your local gym. The first program, called Model e Certified, costs about $560,000 per roof, according to Ford, and gives dealers what you might call basic access to sell electric vehicles.
The second tier—a $1.3 million program aptly called Model e Certified Elite—gives dealers full membership to sell both electric and internal combustion vehicles, as they do now. Dealers who do not wish to join either program can only sell vehicles with internal combustion engines.
More details on the programs can be found in one story, but what’s missing is why Ford is taking this approach. Automotive News Canada didn’t get that answer, but I’ll take it: Dealerships have to spend money on infrastructure and training to sell and service electric cars, so Ford just formalized it and gave it a name.
Toronto office manager David Kennedy compared the approach to that of McDonald’s restaurants: No matter where you are, a Big Mac tastes like a Big Mac. He could have said cheeseburger, but it’s about consistency.
Better this than the alternative: dealers who aren’t sure exactly what to invest in are spending money on the wrong things. A standard approach—doing things the Ford way, the way franchises have always done them—is the best way to get all dealers on the same page and moving in the same direction, and to maintain a certain standard of sales and service worldwide. country. (Ford, if I missed the boat, you can definitely call me.)
According to a Ford spokesperson, about 90 percent of the program’s money goes to infrastructure, which is good. We couldn’t find out what the other 10 percent is for, but the training, administration, communication and overhead costs don’t seem out of the ordinary.
If it’s a bit off, the amount dealers pay should be a variable that reflects their markets. Maybe the amount should be based on total sales, because it’s not like a small Ford store in a rural area needs the same (90 percent) $1.3 million in infrastructure as a big market store.
“Ford needs to be open-minded,” said Steve Chipman, CEO of Manitoba-based Birchwood Automotive Group.
“One size does not fit all.”
Chipman said he will upgrade his stores for electric vehicles anyway (Birchwood has 24 dealerships representing 22 brands, including three Manitoba Ford dealerships in rural areas and one in Winnipeg) and will take the new Ford programs in stride as part of the cost of running the franchise.
But Ford must be on the right track because other brands are quietly watching how it looks. They know they need to create a similar strategy to ensure Big Mac (or cheeseburger) continuity in EV sales and service, and that their retailers are on track and spending money on the right things. How will Stellantis or GM Canada or Honda deal with the same problem? I guess we’ll find out soon.
Ford, meanwhile, is likely to face pushback from dealers — especially in the United States — but the first through the wall always gets bloody.