Ford Hopes to Trim U.S. Dealerships Ranks by Another 10%

DETROIT - Ford Motor Co. wants to reduce its U.S. dealership ranks by another 10 percent -- or 300 outlets -- the automaker's top marketing executive said, according to Automotive News.

At the end of July, Ford had about 3,338 U.S. dealers, including 1,189 dealers with Lincoln franchises.

With industry sales volumes forecast to rebound slowly, Ford and other automakers want to rationalize and improve the profitability of their sales networks by consolidating dealerships. The automaker has aggressively restructured to operate profitably at current sales volumes and adapt to consumers' shift from big trucks and SUVs to cars and crossovers.

Ford is also shuttering the Mercury brand by the end of the year, putting pressure on some of the company's 261 stand-alone Lincoln Mercury dealerships. There are no Mercury-only stores.

“The dealers are full partners in every decision the company makes,” Jim Farley, Ford's group vice president for global marketing, sales and service, said at an investor conference in San Francisco Tuesday. “When you are trying to consolidate your network from 6,000 down to 3,000, the dealers are on your side, and they will help you participate in the consolidation.”

Because Ford's dealer relations have improved in recent years, to an all-time-high, Farley said, the company is in a position of strength to encourage consolidation. At the same time, the value of many Ford dealerships has rebounded this year, so some dealers may be reluctant to give up a franchise.

Separately, Farley said Ford plans to make its premium EcoBoost engines with turbo-charging the core powertrain across all model lines.

Until now, Ford has said it wants to offer EcoBoost in nearly all models as an optional engine. The EcoBoost line also carries a price premium.

“We intend to have EcoBoost across every one of our vehicles as a core powertrain,” Farley said. Over time, he said, the engines will shift from a small portion of Ford's product mix to a “substantial” offering across the lineup.

"We are aggressively investing in global powertrain, especially EcoBoost," Farley said. "We want to bring fuel economy technology to everyone."

EcoBoost can increase the fuel economy and performance of engines by as much as 30 percent.

Since 2004, Farley said Ford has improved average fuel economy in the U.S. market by 25 percent -- almost double what its competitors have achieved.

"We want to beat Toyota and Honda, the traditional leaders of fuel economy, and be the best in class with fuel economy,” he said. "The real key difference for us in our DNA, we want to democratize technology to the average customer."