Saturday, October 9, 2010

Reviving Lincoln Part 2

Ford is still talking about it. They claim to have funding for seven new Lincoln models over the next few years. Now they are talking about culling the Lincoln dealerships. Ford has something like 1200 Lincoln-Mercury dealers, whereas Lexus and Ifiniti sell more cars from dealer bases of about 200.
Of course, this desire to cull out the dealerships says that excess dealers cost Ford money. Normally companies like a solid distribution network. More dealers is better because it insures that even customers in remote locations can find a dealer. So the extra dealers must cost Ford money to keep them in operation.
Dealers are supposed to be semi independent businesses, making money as middle men. Ford should not be subsidizing them. Rather than culling extra dealers, Ford ought to consider changing the dealer arrangement so that the dealers pay their own way. That way the hopeless dealers will just go out of business, leaving the efficient dealers to service customers.

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