LONDON - Ford Motor Co. may be ready to try some of its radical US-style retail innovations in Europe, starting with the UK.
Ford and retail giant Jardine Motors Group plc have agreed in principal to form a joint venture comprising all eight Jardine-owned Ford dealerships in the UK. Ford officials also confirmed the venture might make an offer to buy Dagenham Motors Group plc, the largest group of Ford dealerships in the UK.
In North America, Ford has moved to gain greater control over distribution and sale of its vehicles and consolidate its dealership network into fewer and larger stores.
Ford has combined with dealers in at least five medium-size urban areas to form retail networks that will operate superstores branded Auto Collection. Ford has even contracted with North America's largest auto retailer, Republic Industries Inc. to run one of those networks, in Rochester, New York.
Now there are signs Ford may be ready to try a similar strategy here.
Jardine Motors Group is a unit of Jardine International Motors, a Hong Kong-based holding company that owns auto dealerships around the world, including Lancaster, the largest group of dealerships in the UK with sales of $2.35 billion last year
Dagenham owns 10 Ford dealerships, all in southeast England. Jardine owns its eight through its subsidiaries Polar Motor Group Ltd. and BPW Group Ltd. Those dealers are located mainly in northern England.
Officials at Ford and Jardine declined to discuss details of the ongoing negotiations. Robert Toms, strategic development director of Jardine, did say Ford officials in the UK initiated the discussions. Dagenham officials did not return phone calls.
Such a joint ownership venture could further break down traditional barriers between dealers and manufacturers that have been falling in the last few years. Manufacturer ownership of dealerships is nothing new. In the UK, several manufacturers already own some of their own dealer groups.
Christopher Macgowan, head of the Retail Motor Industry Federation, which represents 12,000 UK dealers, said: 'Ford clearly sees that the policy of selling through dealers is the right policy. That is very encouraging.
'What people are getting muddled with is the difference between a manufacturer wanting to own outlets outright, which is something we think rarely works, versus a manufacturer wanting to implement his policies' so consumers get the same shopping experience everywhere.
Philip Wade, a partner in Harbour Wade Brown, a research and consulting firm based in Warwick, UK, specializing in automotive distribution, said manufacturers used to fear big retail groups would become too powerful.
These days, 'on both sides there's recognition of the need to work much more closely together,' he said.
'Of course, this could simply be a one-off deal with a very important retail partner - Dagenham,' he said. 'Or it could be a precursor of more partnerships.'
Ford is much further along with consolidation efforts in the UK than in other European countries, Wade said. Ford dealerships on the European continent sold an average of 605 vehicles in 1997, while in the UK, the average dealership sold 1,658.
In Germany, Ford has 994 dealer partners compared with 290 in the UK, and Ford sells slightly more vehicles in Germany than in the UK, he said.
In the USA, Ford is joining forces with dealers to combine several markets into entities known as Ford Retail Networks. These networks will consist of several large superstores and a number of neighborhood service centers, according to John Ochs, spokesman for Detroit-based Ford Investment Enterprise Corp., the corporate entity managing the networks for Ford. The superstores and service centers will go under the Auto Collection name. The trade name could be used for retail networks elsewhere, including Europe, Ochs said.
Ross Roberts, the hard-driving Texan who oversaw Ford division in the USA for several years, is president of Ford Investment Enterprises Corp. Roberts has oversight over all the Ford Investment Enterprise activities, both in the USA and around the world. He could not be reached for comment.
Cities where Auto Collection networks are planned include: Tulsa, San Diego, Oklahoma City, Salt Lake City and Rochester, New York. The network in Rochester will be run for Ford by Republic, which has more than 300 dealerships and is on target for about $15 billion in sales this year.