Half of Ford dealers facing closure in the UK
02 March 2020
2 March 2020
Ford is to close almost half of its dealership network in the UK as it reorganises the business as part of its ′Ford 2025 Dealer plan’.
Around 160 to 180 franchised sites will cease to sell vehicles, as the carmaker looks to build a ′stronger and more sustainably profitable’ sales and servicing network for the future of the UK.
Ford said its customers would not be ′unduly inconvenienced’ when buying a new vehicle adding, ′there will continue to be a Ford selling site within easy reach for the majority of our customers, with around 90% of the population within a 30-minute drive of a Ford sales point. Many of the existing smaller sales sites will be converted into vehicle servicing centres to further improve our customer service capability.’
Non-Brexit
In its statement, the carmaker highlighted that the UK is an important part of the company’s transformation as it looks to realign itself as a mobility provider, while concentrating on a slimmed-down product portfolio and its expertise in the commercial-vehicle sector.
Backing the UK in its statement indicates that cutting the dealer network is not related to Brexit, but is instead a measure required to ensure the business can remain profitable. Contracts will be phased out, rather than axed and renegotiated as PSA Group has done with Vauxhall dealerships in the country.
′Ahead of the game in the UK, the dealer network and Ford of Britain national sales company have undergone restructuring over the past two decades. [But] the market is changing further and dealer network profitability is still not sustainable,’ Ford added.
′We are working together in a spirit of partnership with our dealers and their investors to build a stronger and more sustainably profitable Ford sales and servicing network for the future in the UK, which works for the mutual benefit of our businesses and our commercial and passenger vehicle customers,’ it added.
′We currently have around 400 vehicle selling points in the UK. Our goal is to create a network of around 210 to 230 sales sites over the next five years.’
Aftersales changes
Following the announcement about the dealer network, many have called for a change to existing aftersales contracts to safeguard their businesses.
According to Automotive Management, about 50% of the franchisees in attendance at the briefing indicated that they would consider retaining an aftersales contract following the loss of their new-car sales business.
However, no one was keen to retain this function based on the terms of existing contracts. Many are understood to be seeking reassurances over how they will retain profitability on the brand’s current warranty rate, and income from parts, rather than from new-car sales of the volume-driven brand.
The carmaker is the UK’s market leader, selling 236,137 units in 2019, almost 36,000 clear of Volkswagen and 65,000 ahead of third-placed Mercedes-Benz, according to data from the SMMT.