5:04 pm, February 26, 2020
IT was perhaps one of the worst-kept secrets in the automotive world so far this year – the news that Ford was cutting its UK dealership network by almost half over the next five years.
As Car Dealer reported earlier this afternoon, the manufacturer, which currently has around 400 showrooms across the country, is looking to reduce that number to somewhere between 210 and 230 by 2025. Some sites will become authorised repairers rather than continue in their current guise.
After the news had been announced, we caught up with Ford of Britain chairman and managing director Andy Barratt (pictured).
What’s the thinking behind this reduction in new car sales outlets?
You’ve got to look at the backdrop. Customers are changing their habits. They’re no longer doing the seven dealer visits they were doing 20 years ago. They’re researching online – doing all their information gathering – and going in to a dealer maybe once or twice to get the best valuation for their part-exchange and close the deal.
They like to go to a place where there is a wide choice of vehicles on display, a wide choice of demonstrators and where they feel they will get the best value for their existing vehicle. After that, they like to maintain and have an aftersales relationship relatively locally.
So it’s partly about boosting your aftersales operation, then?
Well, we’ve announced a strategic change which means we are growing much deeper into commercial vehicles. Within that, there is a significant aftersales requirement.
And then, instead of 94-95 per cent of the population being within a 30-minute drive of a Ford dealership, slightly less than that – around 90 per cent – will be within a 30-minute drive in terms of a purchase experience.
Customers will still be able to get their vehicles serviced relatively locally to where they are today, which is the convenience factor that people want.
And what about the sales mix moving forward?
As we grow in commercial vehicles, we will still sell roughly the same amount of vehicles overall but with more commercial vehicles within that number.
What we are aiming for is a much more viable aftersales network, a very strong Transit network and stronger, more focused car sales points where they remain.
How do your flagship FordStores fit in to all this?
The FordStores will remain the same. They are the pinnacle of Ford retailing in that they have the biggest displays, more demonstrators, more staff and bigger locations designed to be more of a draw.
They will be supported by a network of good-size Ford branches that give us a network where 90 per cent of the population will be within that 30-minute drive.
How will the changes to your dealer network actually happen?
This journey started a few years ago and we have had some natural attrition but we truly value the relationship we have with our network. They’ve been valued partners – in some cases, we’re talking about working with the same family for well over 100 years.
You cannot disregard that level of loyalty that has worked both ways. You don’t rip up a relationship that has lasted that long. We are actively working with every single owner and investor in our network to come up with the right solution for them for the future. They have a choice as to where they spend their capital – we’d like them to keep spending their capital with Ford.
And everything has been explained to dealers over the last day or so…
We had our main dealers in yesterday – we’ve got a two-tier network – and we’ve had our retail dealers in today.
I think they expected the news, appreciated the clarity and the fact that we have given them a five-year planning horizon, they really did appreciate that.
So no-one is being ‘terminated’ as such…
There are some sites that will no longer sell new vehicles. It depends on the viability and it depends on the shape and format and span of control. It’s not an easy answer for the purposes of this interview but we have a plan.
And what about Ford’s prospects for 2020 as a whole?
I’m very optimistic about the year ahead – we have a great portfolio, we’ve got a very good CO2-compliant powertrain line-up – and we’ve been a brand that has stuck to our PCP strategy all the way through and maintained that integrity over the 23 years that we have been running it.
We’ve got a great ownership base, we have a very loyal PCP base and we’ve got the right products to go out there and hopefully grow our sales this year. I’m very excited and optimistic, as are the dealers.
MORE: Ford: We’re cutting our network almost in half over the next five years
