Ford is set to cut its UK dealership network by almost half as it looks to shore up ‘unsustainable’ profit levels.
The manufacturer, which currently has around 400 showrooms across the country, is looking to reduce that number to somewhere between 210 and 230 by 2025.
In a statement issued today, the company said it was ‘working together in a spirit of partnership’ with its dealers and their investors to build a ‘stronger and more sustainably profitable Ford sales and servicing network for the future’.
The aim is to create a network ‘which works for the mutual benefit of our businesses and for our commercial and passenger vehicle customers,’ it added.
Ford said its customers would not be ‘unduly inconvenienced’ when buying a new vehicle adding: “There will continue to be a Ford selling site within easy reach for the majority of our customers, with around 90% of the population within a 30-minute drive of a Ford sales point.
“Many of the existing smaller sales sites will be converted into vehicle servicing centres to further improve our customer service capability.”
Explaining the rationale behind the strategy, the manufacturer said: “Ford is becoming a more targeted business with a strong focus on growing our commercial vehicle business and providing passenger vehicle customers with a more defined portfolio. In addition, automotive retailing is pivoting to new trends, including electrification, connectivity, car-sharing and online sales.
“The UK is an important part of Ford’s European transformation, continuing to be a critical market. We are the largest European sales market for commercial and passenger vehicles, and [have been] market leader in both for many decades.”
Turning to the specifics of its dealer network, it went on: “Ahead of the game in UK, the dealer network and Ford of Britain national sales company have undergone restructuring over the past two decades. [But] the market is changing further and dealer network profitability is still not sustainable.”
Speaking to the PA news agency, Andy Barratt, chairman and managing director of Ford of Britain, said: “This journey started a few years ago and we have had some natural attrition but we truly value the relationship we have with our network. They’ve been valued partners – in some cases, we’re talking about the same family for well over 100 years.
“You cannot disregard that level of loyalty – and it has worked both ways. You don’t rip up a relationship that has lasted that long. We are actively working with every single owner and investor in our network to come up with the right solution for them for the future. They have a choice as to where they spend their capital – we’d like them to keep spending their capital with Ford.”
Barratt added: “There are some sites that will no longer sell new vehicles. It depends on the viability and it depends on the shape and format and span of control. It’s not an easy answer for the purposes of an interview but we have a plan.”