Quality, Vehicle Affordability Top of Mind for Ford, Dealers

The challenging part, said Hovik – owner of San Tan Ford in Arizona – is helping fellow dealers understand that moving the needle on quality takes patience and time.

“The Super Duty launch is a perfect example.  It’s an amazing vehicle.  And while it wasn’t the greatest financial move for dealers or the company to delay the launch, it was the absolute best decision to hold it for a short period,” said Hovik, referring to last quarter when the Super Duty team slowed the launch process to increase testing on the road and in the plant in a push to find and catch possible quality issues early – before vehicles reach customers.

“It showed a commitment to saying, this is going to pay incredible dividends, but we have to make sure we get it right before we get there,” he said. 

Hovik described the current Ford lineup as “second to none,” pointing to popular vehicles like Bronco, Maverick, Super Duty, and Transit.  The challenge, he said, is with affordability.

“Affordability comes down to people's budgets and people's payments, and these things are astronomical. That's a concern. And it’s not just Ford.  It’s an industry concern,” he said.  “One out of every five customers at my store that buys a new Ford walks out with a payment that is over $1,000.”

Hovik said the Dealer Council is working with Ford and Ford Credit to come up with new financing solutions for customers. 

“What opportunities are there in leasing?  What opportunities are there in extended payments? And so on and so forth,” he said.  “Our product desirability is off the charts, but as an industry, we’re selling people vehicles with house payments, and it’s concerning to everybody in the industry.” 

Hovik also talked about the traditional dealership model relative to Tesla, which sells directly to customers.  He acknowledged that Tesla has been a great disruptor in the automotive industry. But he pointed out that while their customer satisfaction scores may be high at the point of purchase, customers are not so pleased three years into ownership. 

“For anybody that owns one, what do you do when something goes wrong?  You don’t go down to the local dealership to fix it,” he said.  “They’ve had all sorts of recalls.  When’s their van going to show up and fix them?  Six months from now?”

Hovik said he believes it’s not a question of when automakers like Ford will transition to Tesla’s model of selling directly to customers but the other way around. 

“I wonder how long it is until Tesla has franchises or dealerships or rooftops because you can't operate and sell vehicles to consumers without being able to take care of them once they own them,” he said. “And by the way, Tesla is no different than we are. It's the whole industry. They're selling the vehicle for $60,000 to $80,000. If it broke, I’d want to be able to get it fixed. It’s a challenge.”

Hovik, who was in town for a dealer council meeting, said dealers and Jim Farley share a strong commitment to the providing customers with a best-in-class experience.   

Providing customers with mobile service will play a big role in dealers’ plans.  

“It's a brand differentiator,” he said.  “We could flash and fix 69% of issues in less than 30 minutes, and customers never have to be inconvenienced.  It’s the old story. If a guy’s happy, he’ll probably come back and see you.  If he’s unhappy but you fix it and now he’s happy, he’s yours. He’s always going to come back and see you because you’ve fixed a major headache. Nobody else can deliver this on the scale that we can.”