Ford is implementing some of the toughest penalties we’ve ever seen to shut down brokers and dealers. According to a bulletin sent to its dealers today, Ford has updated its definition of what constitutes brokerage and is threatening to remove all dealer vehicle allowances on some of its most anticipated cars.
Although Ford has had a policy discouraging the brokerage, resale and export of its vehicles for some time, today’s changes add a significant amount of detail to the behaviors targeted by this policy. The move comes after Ford updated a customer name matching policy to prevent abuse in the event of inventory shortages.
Compared to the previous anti-brokerage policy, Ford’s letter states:
“Brokerage includes the use of any third party to wholesale, transfer, or otherwise deliver inventory, especially high-demand vehicles (including, but not limited to, Raptor, F-150 Lightning, and all specialty vehicles In addition, any non-Ford dealership or non-Lincoln dealership that provides vehicle relocation and inventory services, automobile transfer assistance, trade facilitation and/or any other company with a name or similar service, is considered a broker.”
The move could be seen as a way to protect consumers looking to buy a highly anticipated vehicle like the 2023 Ford F-150 Raptor or the sold-out F-150 Lightning EV. However, policies like this can only be as strong as their enforcement and penalties, which were also updated by Ford in the latest round of changes.
The updated policy states: “The first violation may result in a 1:1 reduction in future allocation by the negotiated amount. The second violation may result in the redirection of all allocations of the same model for the current or next model year.” The wording did not exist before and seems to be the strongest language we have ever seen.
If its dealers violate the policy twice on a vehicle like the Ford F-150, it could mean losing the ability to deliver an F-150 “for the current or next model year.” It may seem hard to believe for one of America’s most popular vehicles, although the policy may be intentionally worded with some vagueness.
To be fair, Ford’s anti-brokerage policy already included some pretty stiff penalties. For example, one of the threats included a “recharge of all national retail and fleet incentives paid by Ford on sales to companies that resold the units.” This could involve a host of discounts, program discounts, and other incentives.
But will Ford’s latest policy help consumers? Arguably, the definition of a reseller seems loosely related to “intent”. The policy states that it requires Ford and Lincoln dealership transactions “to occur directly between an authorized dealer and the purchaser with no intent to trade, resell or export units.”
The company clearly seems to be trying to protect its distribution system in an environment more heavily focused on customers placing an order and waiting for their vehicle to arrive through a production pipeline subject to delays and other changes. It remains to be seen whether this will be effective or not.
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