LONDON - Ford is choosing its best dealers to buy out their neighbors and create bigger sales territories. Consolidation will enhance Ford's image and dealer profits.
In the UK, Ford has selected 110 dealers to act as partners and buy out 180 other Ford dealers. They will cover the entire country.
Bill Cross, manager of market representation at Ford, said that by the end of this year, about 70 percent of Ford's total sales in the UK will come from those 110 partners. Ford has 290 UK dealers today, down from 380 in 1996.
'The key message is to keep the customers happy and take out expensive layers of management,' said Cross.
Throughout Europe, Ford wants fewer dealers operating the same number of locations. Larger territories eliminate competition among neighboring Ford dealers and help Ford deliver a consistent message.
Timing and scope will vary by country. In France, for example, the total number of dealers will be cut by more than a third from the current 303.
Kenneth Joergensen, sales operations manager for Ford Denmark, said Ford will not act as quickly in the smaller European countries, where attrition will be used rather than buyouts.
In the UK, Ford selected its partners based on sales, customer service, assets and commitment.
Half of the dealers not selected as partners have agreed to negotiate buyouts, said Tom Inglis, owner of Strath Ford in Dumbarton, Scotland, and chairman of the Ford Dealer Council in the UK. He said no dealers will be forced out.
'I think we all realize this is the way for the future, a way to reduce administrative costs,' Inglis said.
Ford wants its UK dealers to average a 15 percent return on capital, said Cross, and many now average less than 10 percent.