FORD Motor Company has reversed plans to adopt the agency sales model in Europe and will remain with a conventional franchise model operating in a reduced dealer network.

The about-face was attributed to Ford’s trial in the Netherlands last year which found that improved data sharing between the OEM and dealers had significant benefits.

It said improved management of data across its sales points means Ford can better gauge the effects of marketing campaigns, see what its cars are being cross-shopped against, determine how far prospective customers get through the buying process and provide better, more relevant information to its customers, based on frequently asked questions.

Australian Automotive Dealer Association CEO James Voortman said Ford in Europe has become the latest brand to walk away from its plans to implement an agency model. 

“A few weeks ago it was JLR in the UK. Four years ago, agency was being touted as the future of automotive retail,” he said.

“Now it seems the gloss is well and truly starting to wear off. My sense is that OEMs are realising that agency requires resourcing and brings risk, particularly in a high supply environment.” 

James Voortman

He said that it will be interesting to see the next steps “but at the end of the day manufacturing and retailing are two very different skill sets and from the AADA perspective the latter is best left to the dealer.”

Ford announced in February last year that it planned to adopt the agency sales model across its European retail network after trialling it in the Netherlands. Core to the plan was Ford’s decision to move to a higher-priced model range that focused on profit rather than volume.

The car-maker said this would give it more control over pricing and to facilitate a more direct relationship between it and its customers. It would also have allowed for the brand to introduce a more consistent approach to marketing, strategy and messaging across all its retailers.

At that time, Ford of Europe boss Martin Sander told Autocar magazine in an interview that: “Agency is definitely the way to go. We’ve decided that we are going to switch to the agency model in Europe over the next few years.”

Now, Ford will use a new hybrid retail approach that uses its established franchise dealerships and focuses on the opportunities of data sharing.

Ford’s sales and brand management chief for EVs in Europe, Anna Lena Strigel, told Autocar that the hybrid is more like “an advanced franchise model, where we use the latest systems to get more insights about customers, and we can really follow the customer journey end to end, while still keeping the franchise partner as the very important backbones of our system.”

“Learnings have brought us to an evolved franchise network,” she said.

Ms Strigel indicated that the decision to remain with franchising was possible because of the role that data-sharing can now play in Ford’s sales operations.

Dr. Anna Lena Strigel

“We believe in the power of having full transparency of data sharing between OEMs and franchise partners,” she said.

“In terms of the systems, that’s a real evolution – and a real requirement for being successful going forward.”

Improved management of data across its sales points means Ford can better gauge the effects of marketing campaigns, see what its cars are being cross-shopped against, determine how far prospective customers get through the buying process and provide better, more relevant information to its customers, based on frequently asked questions.

Ms Strigel said that physical dealerships remained integral in this model because while some 90 per cent of Ford customers “start the journey online”, she said “nearly all customers actually make the switch between digital and physical.”

“For most customers, a car is the second biggest investment that they’re making in their life, apart from a house, so it’s something they consider very well,” she said.

“In Europe, we see that most customers are simply not ready to do the complete transaction online. We had expected that (shift) to be faster, but the reality shows us that customers wished to have a physical interaction for the purchase, not only to get the test drive but also to have physical guidance during the transaction process.”

For that reason, she said, Ford sees “the impact and power of our franchise partners”.

However, Ford’s retail network in Europe will still be downsized, as had been suggested by Mr Sander when plans for an agency model were in train.

Ms Strigel said Ford’s new “targeted customer approach” – with the Fiesta and Focus bowing out and a new line of more upmarket cars coming in – means “we expect to have a more targeted and reduced volume, and as such we are adjusting the network as we go.”