√Ford considers fixed prices in Europe, rules out switch in Australia

Ford’s European division is investigating a switch to non-negotiable fixed prices, but Australian division of the company has repeated its earlier position that it will continue to give customers the ability to negotiable.

US automotive giant Ford is considering a switch to non-negotiable fixed prices in Europe but the changes won’t be implemented in Australia.

German publication Automobilwoche reports Ford of Europe is preparing to downsize its dealer network and shift to fixed prices in the coming years, starting with the Netherlands in 2024 followed by Germany in 2025.

A spokesperson for Ford Australia told Drive it is not planning to change is existing business model which allows prospective buyers to negotiate on new-car prices.

Martin Sander – the chair of Ford’s German operations – told Automobilwoche it is considering the switch so that it can remain profitable.

“For us, it is crucial that our network is profitable in the long term,” Mr Sander said in an interview with Automobilwoche. “We will not implement the necessary adjustments in a rush, but will give ourselves five to eight years to do so.”

Mr Sander’s comments come after an October 2022 report by Automobilwoch, in which Ford’s business strategy boss for Germany, Austria and Switzerland – Jörg Ullrich – told the publication, “a standard price for each model would simplify the system significantly”.

To date, the retail cost of cars has risen among the automakers who have switched to the new business model, meaning customers are worse off under the scheme.

In June 2022, Ford Australia ruled out introducing non-negotiable sales locally – despite global boss Jim Farley describing a potential move to fixed prices in the US as “the most exciting land grab in our industry since the Model T”.

In September 2022, Ford’s head international markets executive, Dianne Craig, reiterated the company’s earlier comments, telling Drive: “Regardless of franchise laws, or some of the other limitations … our dealers really are our competitive strategic advantage.”

Last month, overseas reports claimed Dutch automotive conglomerate Stellantis – which owns car-makers such as Jeep, Peugeot, Citroen and Alfa Romeo – is planning to move to fixed prices later this year, while BMW is following suit in 2024 with the Mini brand.

In Australia, Honda became the first car-maker to transition from a traditional sales model to fixed prices locally in July 2021, while also reducing its dealer network from 105 locations to 90.

The move resulted in Honda Australia posting its lowest annual sales on record in 2022, reporting 14,215 new cars as sold – less than half of the 29,040 examples it shifted in 2020.

Mercedes-Benz Australia implemented non-negotiable fixed-prices at the start of January 2022, with annual sales of its passenger cars and SUVs subsequently slipping by 5.5 per cent compared to 2021 and 27.7 per cent compared to its record, set in 2017.

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