Ford Dealers Say All Signs Point to Bright Future
By Derek Stark WardsAuto.com, Jan 25, 2009 7:08 PM

NEW ORLEANS – Ford Motor Co.’s new-vehicle sales fell more than 20% last year, compared with 2007, and dipped below 2 million units, but that’s not apparent from the mood of dealers who attended the auto maker’s dealer franchise meeting here.

A resounding theme of pride and confidence, even a bit of a swagger, is portrayed by dealer after dealer exiting the franchise meeting here Sunday at the National Automobile Dealers Assn. annual convention.

“You have to come out of there feeling really positive,” says Sam Pack, who owns three Ford franchises in Texas. “Obviously we are in critical times and the industry is having its problems. We don’t expect it to turn around short term, but Ford is positioned for a bright future.”

Pack says sales at his three dealerships were down a bit in 2008, but in view of the overall market he is pleased with the performance. “We are blessed because we are in Texas, so our economy is still pretty good relative to the marketplace,” he says.

“We have a very balanced operation – strong fixed operations and strong used-car departments. Trucks are still very strong for us; the car segment continues to be a challenge; but the overall market for us was good.”

Pack owns Five Star Ford in North Richland Hills, Sam Pack’s Five Star Ford in Carrollton and Sam Pack’s Ford Country in Lewisville, all of which rank in the nation’s top 20 for retail sales.

Ford marketing chief Jim Farley tells dealers, “We will be working together.”

“The market is very competitive (in Texas),” he says. “We have evolved into niche markets, I think the dealers who are truthfully focused on the overall operations and on the niche markets will continue to do very well.”

Pack gives credit to Ford. “I think we are blessed to have great leadership and management. They are working very closely with the dealer body.

“Relationships are probably as good as I’ve ever seen them,” he adds. “We are focused on building a relationship today that’s going to serve us well in the future.”

Alan Meyer, owner of Willowbrook Ford in the Chicago area, says there is a lot of positive feedback from the manufacturer.

“We have product coming, and we’ll be leading in technology areas,” says Meyer, who has owned the store for 30 years. “The question is getting that information to the consumer. I don’t think the consumer knows about our small (cars) yet, (but) they will.”

Meyer says his store’s new-car sales were down last year, while used-car sales rose.

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“Our parts-and-service absorption was up. We were also able to cut a lot of expenses, and as a result we were able to have a more profitable year in 2008 than we did in 2007,” he says. “We are very confident we’ll have an even higher profit year this year than we did in ’08.”

William Price, owner-Plattsburgh Ford in New York, says Ford is positioned for the future much better than the competition, both foreign and domestic.

“We are ready to win this battle,” says Price, adding sales at his store weren’t too bad last year. “We held our own, and we are going to keep going.”

Jim Farley, Ford group vice president-marketing and communications, echoes the sentiments expressed by the dealers.

“The main message was not the fancy new products we have, it wasn’t how Ford has a real chance to grow its market share – it was about understanding profitability challenges brought on by the industry and working together,” Farley tells Ward’s.

“We understand that this is a tremendously difficult time for everyone, and we have to work through this together. “It’s not about programs, or telling the dealers to do this or that, the main message we gave was we’ll work through this together.”

Most questions that came from dealers during the franchise meeting revolved around product, Farley says.

“We had a lot of promotional questions about supporting products: What’s the structure of our incentives; what’s the correct balance between dealer cash and customer incentives that will excite them enough to come in vs. dealer cash that can be disruptive negative equity situation with our customers.

“No matter what happens, there is going to be surprises and difficulties between the factory and dealers. “I think the ethic that we have now, no matter how hard, no matter what the topic, we will be working together,” Farley adds.

“I know that sounds trite, but we have to prove it to all the dealers (that) when we say working together, we mean working together. The proof will be in the pudding.”

Ken Czubay, Ford vice president-marketing and sales, says the meeting went a lot longer than executives wanted but remained upbeat.

“We are going to be appropriately aggressive in the marketplace,” he says. “We support our dealers, and we are working together to get the right balance between dealer cash and consumer facing. There’s a purpose for both of them, and we’ll always support our dealers.

“Dealers understand it’s a very tight market right now, but there was a high level of cooperation that we are going to get through this. It was as positive of a meeting that I’ve been through in years.”

dstark@wardsauto.com