Ford Dealer Allocations

[terryj]

How does Ford's dealer allocation system work? Specifically looking at new models such as the 11 Mustang GT and 11 Shelby GT500.

 

TIA

[RichardJensen]

It's a fairly complicated formula that is based off your previous year's sales and your available floorspace, and factored into that is the total amount of production scheduled.

 

Dealer allocation is the number one priority, the number two priority are additional dealer stock orders, and customer orders are number three.

 

That may seem a bit unfair (it certainly did during the '05 Mustang bonanza), but Ford can't be in the business of altering the allocation procedures for -one- model, nor can they be in the business of alienating their customers (dealers), in order to satisfy the dealers' customers (the car buying public).

 

While that may sound a bit harsh, custom orders are, by their very nature, odd vehicles. They represent outliers among the car buying public, and if the customer refuses to take delivery of a custom order (happens more often than you'd think), then the dealer is stuck with it--and because it's an odd configuration, stuck is about the right word for it.

 

Additionally, when it comes to inserting custom orders in the order process, the build process is usually scheduled (AFAIK) 2-3 months out. This information is provided to all Ford's Tier 1 suppliers--many of which are required to ship components to Ford's factories in exact build order (that is, the rail cars or trailers are loaded and unloaded in a specific order, and the components are aligned for insertion into the assembly line in a strict order.)

 

All of this makes it a logistic nightmare to insert custom configurations into the build order.

 

-----

 

Dealers that do well will have their allocations increased. Dealers that do poorly will have their allocations held steady, or reduced.

 

-----

 

Sometimes, a certain measure of payback comes into it. A local dealer borrowed heavily from Ford Credit to build a LM/Mazda showroom.

 

Less than a year after the building was finished, they moved LM and Mazda BACK to an incredibly cramped lot/showroom where these lines were combined with Chrysler and Jeep (5 brands on a lot that could hold *maybe* 150-200 units of new inventory in a metro with about a quarter million people). They put TOYOTA in the showroom that FORD financed. Ford was not pleased with this.

 

Subsequently, and using the incredibly tiny lot as an excuse, Ford cut their LM allocation to starvation levels (less than a dozen new LM products on the lot at any given time--usually less than 8).

 

The dealership finally caved and sold the franchise to another dealer about 3 years later.

Edited July 5, 2010 by RichardJensen

[RichardJensen]

As regards the Mustang GT, the allocation process will be similar to the regular Mustang.

 

The Shelby GT 500 may have an 'incentivized' allocation process (the Ford GT did), where dealers that do well on customer satisfaction surveys or volume targets receive additional allocation.

[PTRocks]

The first post in this thread also has some useful information.

[akirby]

On some models Ford allows dealers to order confirmed retail units (pre-sold to customers) and they get priority in the build queue AND they do not count against the dealer's normal allocations. I believe this was done with the Fusion Hybrid and is a great idea. I think they should always do that with pre-sold orders and leave allocations to dealer stock.

[Kev-Mo]

It's a fairly complicated formula that is based off your previous year's sales and your available floorspace, and factored into that is the total amount of production scheduled.

 

Dealer allocation is the number one priority, the number two priority are additional dealer stock orders, and customer orders are number three.

 

That may seem a bit unfair (it certainly did during the '05 Mustang bonanza), but Ford can't be in the business of altering the allocation procedures for -one- model, nor can they be in the business of alienating their customers (dealers), in order to satisfy the dealers' customers (the car buying public).

 

While that may sound a bit harsh, custom orders are, by their very nature, odd vehicles. They represent outliers among the car buying public, and if the customer refuses to take delivery of a custom order (happens more often than you'd think), then the dealer is stuck with it--and because it's an odd configuration, stuck is about the right word for it.

 

Additionally, when it comes to inserting custom orders in the order process, the build process is usually scheduled (AFAIK) 2-3 months out. This information is provided to all Ford's Tier 1 suppliers--many of which are required to ship components to Ford's factories in exact build order (that is, the rail cars or trailers are loaded and unloaded in a specific order, and the components are aligned for insertion into the assembly line in a strict order.)

 

All of this makes it a logistic nightmare to insert custom configurations into the build order.

 

-----

 

Dealers that do well will have their allocations increased. Dealers that do poorly will have their allocations held steady, or reduced.

 

-----

 

Sometimes, a certain measure of payback comes into it. A local dealer borrowed heavily from Ford Credit to build a LM/Mazda showroom.

 

Less than a year after the building was finished, they moved LM and Mazda BACK to an incredibly cramped lot/showroom where these lines were combined with Chrysler and Jeep (5 brands on a lot that could hold *maybe* 150-200 units of new inventory in a metro with about a quarter million people). They put TOYOTA in the showroom that FORD financed. Ford was not pleased with this.

 

Subsequently, and using the incredibly tiny lot as an excuse, Ford cut their LM allocation to starvation levels (less than a dozen new LM products on the lot at any given time--usually less than 8).

 

The dealership finally caved and sold the franchise to another dealer about 3 years later.

 

 

 

 

"custom orders are, by their very nature, odd vehicles. They represent outliers among the car buying public, and if the customer refuses to take delivery of a custom order (happens more often than you'd think), then the dealer is stuck with it--and because it's an odd configuration, stuck is about the right word for it."

 

 

1. How often does this really happen (stated in %)?

2. Since the manufacturer limits how a vehicle can be configured, how can it be said that a customer optioned car is odd or an outlier? There is no such thing as an odd configuration. If you go to the Ford website and try to build an "odd configuration", the system tells the user you can't have it that way.

So, this leads to the question: Why on earth would a blue model without a sunroof be any harder to sell than a white one with a sunroof? The blue one would be less expensive without the option that seems cool but nobody actually uses.

 

I have ordered 4 of 5 of the new cars I have purchased. So 1 in 5 they actually had what I wanted, but of course tried to sell me something I didn't before telling they had the one I liked. Dealer stock generally has something the customer does not want but will pay for it ONCE they are convinced that they love the car. This is the way the game is played, and the reason sales people even exist. More profit at the expense of the customer. It boggles my mind how grown adults claim they are unwilling to wait a few weeks for exactly what they want, and are willing to pay for. I would gladly just order exactly what I want and wait than to have a guy trying to shove something down by throat I don't want.

[Deanh]

"custom orders are, by their very nature, odd vehicles. They represent outliers among the car buying public, and if the customer refuses to take delivery of a custom order (happens more often than you'd think), then the dealer is stuck with it--and because it's an odd configuration, stuck is about the right word for it."

 

 

1. How often does this really happen (stated in %)?

2. Since the manufacturer limits how a vehicle can be configured, how can it be said that a customer optioned car is odd or an outlier? There is no such thing as an odd configuration. If you go to the Ford website and try to build an "odd configuration", the system tells the user you can't have it that way.

So, this leads to the question: Why on earth would a blue model without a sunroof be any harder to sell than a white one with a sunroof? The blue one would be less expensive without the option that seems cool but nobody actually uses.

 

I have ordered 4 of 5 of the new cars I have purchased. So 1 in 5 they actually had what I wanted, but of course tried to sell me something I didn't before telling they had the one I liked. Dealer stock generally has something the customer does not want but will pay for it ONCE they are convinced that they love the car. This is the way the game is played, and the reason sales people even exist. More profit at the expense of the customer. It boggles my mind how grown adults claim they are unwilling to wait a few weeks for exactly what they want, and are willing to pay for. I would gladly just order exactly what I want and wait than to have a guy trying to shove something down by throat I don't want.

would you buy an f-250 without a spare? how about a truck without a tow hitch, a diesel with a 6 speed MANUAL transmissions, a Ranger sans Airconditioning, ANY vehicle in a color called Chameleon? a King Ranch with a manual locking Differentisl......a $60k Superduty with no Factory nav system.....just some examples on various orders i have seen...several which ended up NOT being taken and sat for us to take HUGE losses on to move them....

[RichardJensen]

1. How often does this really happen (stated in %)?

2. Since the manufacturer limits how a vehicle can be configured, how can it be said that a customer optioned car is odd or an outlier? There is no such thing as an odd configuration.

 

1. I don't know. Ford HQ may not know either. Deanh, Ice-capades, and Ironhorse can give you info. I've got mine from anecdotal accounts among the dealers I know.

 

2. There are now *only* 10 million possible build configurations for the F150. To say that *no* build configuration is an outlier is ridiculous, when there are more build configurations available than there have been F150s sold over the past 20 years.

[RichardJensen]

Prior to 2010, there were well over a BILLION ways to configure an F150.

 

If you can't find the exact vehicle you're looking for among 200 units of dealer inventory, yes, what you want is a statistical outlier.

[tjl]

2. Since the manufacturer limits how a vehicle can be configured, how can it be said that a customer optioned car is odd or an outlier? There is no such thing as an odd configuration. If you go to the Ford website and try to build an "odd configuration", the system tells the user you can't have it that way.

 

Some options (or lack thereof) may be highly desired by a few people, but undesired by most. The few people may be enough that it is worth it for Ford to offer that option, but a dealer with such a vehicle may end up taking a long to sell it. An example would be a manual transmission or a color other than white, black, gray, silver, or maybe red or blue.

[terryj]

Thanks for all of the info. I know Ford has gone to the "rapid spec" configurations that may bump up some models, say an XLT to a Lariat depending on what you want as options. My question revolves around a dealer that is local to me that doesn't have an allocation for a Shelby GT500. They had one on the floor that they sold and said they didn't have allocation to order another. I live in the Houston metro area so I have multiple dealers to choose from. I did end up ordering a Shelby GT500 Convertible from a dealer on the north side of Houston.

[Marginal Economist]

Thanks for all of the info. I know Ford has gone to the "rapid spec" configurations that may bump up some models, say an XLT to a Lariat depending on what you want as options. My question revolves around a dealer that is local to me that doesn't have an allocation for a Shelby GT500. They had one on the floor that they sold and said they didn't have allocation to order another. I live in the Houston metro area so I have multiple dealers to choose from. I did end up ordering a Shelby GT500 Convertible from a dealer on the north side of Houston.

 

GT500 Allocation is different than most other vehicle line allocations. There is a fee to sell a GT500, dealerships must sign up every year. Each dealership gets a minimum of one for signing up. The rest of the allocation is determined by SON (Share of Nation). Ford determines how many GT500's will be produced for a model year and then spreads it among dealers based on their % of Mustang sales. Some dealerships will only receive 1 per year. A top 100 dealer may recieve 3-5.

 

It is quite possible that the dealership in Houston had reached their 2011 allocation limit and may not recieve any more 2011's this year. There is no retail program and there is very little dealer trading on this product. HTH.

[tjl]

Prior to 2010, there were well over a BILLION ways to configure an F150.

 

If you can't find the exact vehicle you're looking for among 200 units of dealer inventory, yes, what you want is a statistical outlier.

 

If there are (for example) 200 F-150s at a Ford dealer, how many different configurations will be represented (even if you don't care about colors)? Sometimes, an inventory search of a particular model will show several of the same configuration (differing possibly only by color).

[RichardJensen]

If there are (for example) 200 F-150s at a Ford dealer, how many different configurations will be represented (even if you don't care about colors)? Sometimes, an inventory search of a particular model will show several of the same configuration (differing possibly only by color).

 

Unless the dealer's (multiple dealers, more likely) allocation is wayyyyy out of whack, those 200 units should be a reasonable approximation of any 200 units of production on the road......

 

That means that your preferred configuration--if not on the lot--represents no more than .5% of all the 2010 F150s on the road (again, assuming that the dealer allocation is sound).

 

I would guess you'd have only about 20-30 configurations among the 200 units, not counting color variants.

Edited July 7, 2010 by RichardJensen

[Deanh]

Unless the dealer's (multiple dealers, more likely) allocation is wayyyyy out of whack, those 200 units should be a reasonable approximation of any 200 units of production on the road......

 

That means that your preferred configuration--if not on the lot--represents no more than .5% of all the 2010 F150s on the road (again, assuming that the dealer allocation is sound).

 

I would guess you'd have only about 20-30 configurations among the 200 units, not counting color variants.

if that Richard....most dealers have a grid which we pretty much stick too when ordering Stock units....the ONLY variance would be color.....and its usually based ( loosely ) on Fords recommendations which again are based on customers "take" % on particular options. Problem is its based nationally and thus is scewed to where certain models sell better...ie, Fords template for the Flex would be So Cal based....etc etc.....

[Marginal Economist]

if that Richard....most dealers have a grid which we pretty much stick too when ordering Stock units....the ONLY variance would be color.....and its usually based ( loosely ) on Fords recommendations which again are based on customers "take" % on particular options. Problem is its based nationally and thus is scewed to where certain models sell better...ie, Fords template for the Flex would be So Cal based....etc etc.....

 

SIMS is based within a 150 mile radius or X amount of dealers, based on dealer representation. commodoties are set at a national level, then divided up by region and dealer. Cali may get a lot of XLS Escapes, where Boston may not.

[Deanh]

SIMS is based within a 150 mile radius or X amount of dealers, based on dealer representation. commodoties are set at a national level, then divided up by region and dealer. Cali may get a lot of XLS Escapes, where Boston may not.

we over-ride what ford recommends....there was one instance that if we were not on the ball we would have been inundated with Ford Ranger....STICK SHIFTS......

Edited July 7, 2010 by Deanh

[J-150]

Please Come and Find Get unbelievable offers and great discounts on the the most reputed Ford Dealer in Scarborough.

If you are reputed, why are you spamming?

Edited December 29, 2015 by akirby

[jasonj80]

If you are reputed, why are you spamming?

I highly doubt it is the dealer that is doing this, just a SEO marketing company trying to get inbound links to the dealers website from another site that is similar in content to the dealership. Google likes this so they get higher placement in search terms. . There are other ways of doing it though so board members don't see it.

[akirby]

Spam? I don't see any spam....

[fuzzymoomoo]