The manufacturer has look guidelines that the dealer has to adhere to, but yup, like you said they design it and implement it and all.

Oftentimes the franchisor will finance the construction, but ultimately the business owner pays for it. Car dealership, hotel, restaurant...all the same.

An example is Genesis, thats why so many Hyundai dealers didnt sign up to sell the G90 before they rolled out the improved Genesis co dealer plan, because Hyundai required a bunch of capital improvements to the older dealers and they didn't feel it was worthwhile to invest that capital to sell one low volume model.

I understand what you are saying. My point is, the dealership costs are passed on to customers. A direct sales model does not have that cost.
Direct sales is cutting out the middleman.

Both of your posts are ready great 👍.

I bet you must have hated those cheapskates who didn’t want the dealer to make any money?

Totally agree with all of this. It think the dealer model is best IMO.

If you think manufacturers are going to pass the savings from a direct sales model on to consumers I have oceanfront property in Arizona to sell you lol

Dealers provide their own competition, once you chose a car model then you shop between dealers to find the best deal. Direct sales will cost consumers money, not save them money.

In any event, what Ford is talking about is not a direct sales model. They are talking about custom ordering through dealers vs holding a ton of inventory at dealers. You will NEVER see Ford do a direct sales scheme because of their franchise agreements with dealers.

Get the chips rolling & then you get to ordering a Lighting w/ the Lariat trim level.....Carbonized grey, anti matter blue. iconic grey or a stone gray......NO whites.......Can't forget 'bout the $7500. incentive as well.....

People get super picky when it comes to mundane stuff, yet they are happy to take whatever car is available on the lot instead of planning ahead and custom ordering one? Especially nowadays when there are so many options to chose from.

Wrong. They're wasting money on incentives because dealers end up with the wrong product mix or too much product and manufacturers then have to offer incentives to help dealers out that they stuffed in the first place. It's a completely stupid business model. Dealers ARE the problem. Cars cost more than they should to consumers because of grotesque inefficiency, and consumers paying for mostly tacky dealerships.

False dichotomy. Ford isn't saying there will be no cars on lots. They're saying they want to offer consumers build to order in a more accommodating efficient way. And perhaps this is because DEALERS are finding consumers are not buying because they can't find on the lot what they want and aren't will to settle for something on the lot.

when i got my 2 vehicles recently, i was not willing to settle for vehicles without certain features, and knew what interior colors i would not like. Exterior color i was less picky about but those other things had already sealed my options. For my LC i couldn't find a car i wanted in the entire state so had to buy elsewhere. For the Santa Fe fortunately my dealer had quite a few in stock and one met my criteria and they were (after highly annoying haggling, overcoming their lies and deliberately obfuscated 'offers') willing to do the deal.

Exactly. And it's not either/or, there will still be cars on ford lots.

Again, false dichotomy, ford is not saying they won't have cars on lots.

One value is they can show a customer a wide range of new and used vehicles.
another is often decent service.

GIGANTIC. It's offset a lot from high service prices, in many cases the 'new car' business doesn't make that much money.

Note that has nothing to do with satisfying customers. In fact it shows complete contempt for them.

funny how tesla doesn't have to start and stop their production lines even with EVERY order being a special order.
obviously their product is 'simple' in terms of options combinations, and they don't have to deal with dealers.

you're probably right, due to the litigious and powerful NADA and lobbyists.
I may not have been a dealer, but i do have friends who have been and with a ton of insight at all levels of the car biz including the manufacturers.

That's funny. The tidal wave hasn't even really begun yet. As more and more EVs become available for a whole load of manufacturers, build to order may become easier and as ICE vehicles recede in sales, build to order may become more important to entice pickier ICE buyers.

Exactly right.

manufacturers don't operate in a vacuum. They're in competition with each other. In the good ol' (shudder) 70s, much car design and quality had become complete garbage due to complacency, screwing consumers and treating them with contempt before, during, and after the sale, UNTIL the Japanese brands invaded with better cars, great reliability, simpler options packages, winning millions of customers over with a better experience before, during, and after the sale. So things can and do change.

We live in an age of Amazon, where people get what they want. They can be picky. And it still shows up quickly. Retail stores are dying because most of the times consumers walk into them they CAN'T get what they want. They survived in the past because there was no alternative. People bought clothes for example, that they didn't really like, clothes that didn't really fit, because that's what was available. Now that's not the case. I used to buy sneakers in a store. I don't any longer. Online i can get the EXACT size, color, model, width etc., i want, and i get it in a couple of days. If i go into some giant sporting goods store, chances are they won't have what i want, and i've wasted my time. And that giant store has to sell a MOUNTAIN of product to people who aren't really getting what they want. That's why it's a broken model. Traditional retail is broken. That's why traditional car dealership selling models are broken.

Let's look at your business. A friend i saw tonight just sold a beach condo. They knew another one in the building has sold quickly for a high price, so they called that realtor. The condo sold in one day for around the same price. The realtor made about $15K for doing almost nothing. That's money that INFLATED the cost of that condo. It's money the seller won't see/get.

My neighbor is a commercial realtor. The market is nuts, and he's making money hand over fist because there's a frenzy for commercial property here. He's a good guy (as are you), but is he 'adding' that much 'value' to all these transactions? Absolutely not. All it's doing is inflating prices, potentially accelerating a bubble, and requiring those buyers to sell at what they bought plus their selling commissions at the very least to make sure they don't lose, and keeping the realtor gravy train going. Not picking on you, but it's just another broken business model, and just like the powerful dealer lobbying and organizations, as you know, realtors are managed by powerful organizations, closed systems, and highly exclusionary practices.

bottom line: aside from monopolies, the more parties and people involved in transactions, the worse it is for the consumer.

True but not going to say 'never'. The dealers currently have too much clout though. It is ABSURD the tesla can't sell cars in certain states (like texas) still.

Please explain when it was you could not “order” a new Ford? You do realize Tesla does have dealerships they own, do build cars for stock, and do invest in these facilities. That tidal wave of electric sales you see coming is exactly what will eventually force Tesla into the traditional dealership model to stay competitive.

I'm not sure what percentage of car buyers are impulse buyers, but I think this business model would put a damper on that. Also, there is a percentage of buyers that have an issue with their car and get fed up and decide to buy instead of fix. Don't think this business model will include those folks either.

I just think that signing a contract and waiting makes a buyer think more about the transactions itself than the vehicle. Delayed gratification. If they can drive it home tonight, the focus is more about the vehicle than the purchase. Our society now expects immediate gratification with little to no compromise.

Would absolutely love the U.S. to follow nearly the rest of the world in moving to build to order. I just don't see it happening for the mass market. I do see a very specific effort in the industry to better understand what features customers truly want and value and actually use, so better packaging and bundling to reduce build complexities, higher likelihood of you finding the car you "build" online at a dealer in your area, etc. Also coming to the age where many new features can be activated and/or subscribed to as well. So that will definitely improve flexibility and availability.

I don't agree lol. His point is with a direct order platform they wont have to incentivize inventory...meaning we will pay more for a car direct ordered than one on the lot they want to move. Its totally clear.

You just have no idea what you're talking about, sorry. The bottom line is we add a TON of value to the process, and many many transactions would never successfully happen without our work and our expertise. Sure, some of them are easy, its that way in every professon, but not all of them are.

Lets take this example of the beach condo. You say it sold in one day but you don't understand the work that went into preparing that property for sale (it takes weeks), and negotiating multiple offers making sure that you had a contract that was truly the best contract with the greatest chance of going to settlement. You also didnt see the many hours of work and experience that went into shepharding that through to settlement, dealing with unforseen issues, etc. Then there's the liability, whenever something goes wrong guess who gets sued? We do. We're salespeople, legal advisors, accounting advisors, general contractors, interior decorators, contractual specialists, negotiators. I've helped people get US citizenship, I've paid for and renovated people's homes when they don't have the money to do it themselves and netted them $100,000+ more than they would have had I not done so and sold them as is. Many, many times.

Spend a day with me and you'll stop calling what I do worthless. You wouldn't last a year trying to do this for a living lol. You'd wash out like the 90% of people that do when they try.

I think the consumer must totally misunderstand how the process for dealers works presently. Every car is currently build to order. The difference is whether the car is for a retail consumer sold order or a dealer inventory order. While the manufacturer doesn't care which one the order is, one is to the specifications of a potential purchaser and the other is built to the dealer's specs for their inventory. The factory at no point simply ships cars to dealers built the way they wish to build them.

The "complexity" into the process is the manufacturer grouping popular options to force either the dealer or the consumer to order more accessories than they want so as to increase the profit margin on the vehicle and to streamline the manufacturing process. The two largest car markets in the world are the U.S. and China that dwarf the others. Those two and Europe all operate not on a "build to order" but a dealership inventory model.

Totally agree. Without real estate agents, the industry would suffer. Study and study shows that realtors add massive value. It’s astonishing to read that part.

No doubt in my mind about it. I have saved too many transactions and made too much of a positive impact in people's lives over the time I've been doing this to believe otherwise. We oftentimes don't do a good job of showing what we actually do and it makes it look easy, but it is not easy. My expenses last year alone were well over $200,000, and thats just capital investment in projects for clients, that doesn't even touch the expertise and time and the value of that.

And people think we like this insane market. We do not.