A first-of-its-kind auto sales web site jointly owned by Ford dealers and their automaker is scheduled to go online this month in the No. 1 U.S. market - California.
Called FordDirect.com, the portal is seeking financial investment among all 4,200 Ford dealers for an 80% equity in the enterprise, with Ford Motor Co. holding the other 20%.
A key architect of the unique web site, Ford dealer David Kain of Jack Kain Ford in Versailles, KY, is the venture's chief operating officer. It's quite an honor for a dealer from a town with less than 10,000 people.
He says, "It differs from all the other factory and independent sales sites because dealers will be running it and selling and delivering the vehicles as a main element in the online process."
Approved at a Ford National Dealer Council meeting, Ford Direct was proposed by the dealers to the automaker and worked out at dealer sessions beginning last winter, according to Jerry Reynolds, council chairman and owner of Prestige Ford, Garland, TX.
"We called in 56 non-council member dealers for a secret review, and 55 approved the idea," Mr. Reynolds reports. "This is a dealer-focused response to the third-party sites and one all Ford dealers can benefit from."
Financial and operational details of FordDirect are being decided by Mr. Kain's committee of Council members prior to the California launch.
But it was learned that Ford Credit would be linked to the site and consumers will be able to process a new Ford vehicle purchase seven days a week on a 24-hour basis, including financing.
A warm endorsement of the initiative came from Ford Division President James. G. O'Connor, who hopes a national rollout would be completed by the end of 2001. He invited other Ford brands to link on if they wished.
Says Mr. O'Connor. "We'll be an investor, but Ford Division dealers will retain control of the new entity."
Mr. O'Connor says the new site would not now take the place of the company's existing sales portal, "but if it gains the bulk of consumer online orders, it could supplant it some day."
On the sensitive issue of pricing, Mr. Kain says MSRP, dealer invoice and "e-prices" based on local markets would be displayed. Shoppers will be allowed to select a dealer of their choice for vehicle delivery or obtain a list of five nearby dealers if they prefer.
Mr. Kain says "average dealer margins" would be reflected in Ford Direct e-prices. It's uncertain whether the new concept would be part of Ford's new Blue Oval awards program.
A Ford Dealers Alliance spokesperson recalls that a similar web site was piloted in Tucson, AZ, in 1998-99, but "dealers were not satisfied after a one-year period because margins were so low."
He adds, "Rural dealers could be hard-pressed to meet the financial demands of both FordDirect and Blue Oval. They could find metro market dealers the primary beneficiaries."
Other Ford dealers on the FordDirect committee include: Dans Callans, council vice chairman, Sunset Ford, Peoria, AZ; Gary Lafrenz, Don Lafrenz Ford-L-M, Mason City, IA; Tim Wickstrom, Wickstrom Ford, Barrington, IL; Leo Hillock, Sr., Maroone Ford, Fort Lauderdale, FL; and Bill Keith, Freehold Ford, Freehold, NJ.
Meanwhile, GM follows Ford in piloting a build-to-order direct sales web site connecting shoppers, dealers and assembly plants. The GM pilot covers seven Oldsmobile dealerships in Minneapolis and St. Paul, MN. Ford's pilot are in two Ontario, Canada districts.
