ekaddo
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Dealers like Granger Motors expected the same, according to Zach Westrum, who inherited the company from his father. Westrum considered the Bronco an opportunity to become a bigger player in the market of 3,000 or so Ford stores, so he offered a set price, $1,000 below MSRP. At the time of the launch, with the first Broncos still almost a year away, many dealers refused to agree to any sort of price, so Granger’s offer drew reservations from all over the country — 1,300 in all.
However, in a conference call with Ford two months after it started taking deposits, Westrum said he heard the term “allocation formula” and quickly realized his strategic sales coup would turn into a supply nightmare. He describes the moment as “a gut punch.”
Using an allocation formula is a well-worn strategy by which a carmaker decides where to ship its finished vehicles. With a coveted model, priority typically goes to larger dealers and those who hustle to sell less popular models. With the Bronco, Ford said only half of its shipments would be routed based on online reservations; another quarter would be sent based on the location of the dealerships, with larger markets getting priority, and the final 25% would be sent based on historic volume of sales, with bigger, busier stores taking precedent.
Granger figured it had more Bronco reservations than any other store in the nation, but it was a mid-size dealer in corn country; Ford’s equation would favor larger dealers in massive car markets like Dallas and Los Angeles. “I thought it would be first-come, first-served,” Westrum said, “but 50% of the formula was working against us.”
Last year, Granger was able to fill only 150 of its 1,300 orders, almost all of them to customers who flew in, picked up their SUV and drove back out of state.” https://apple.news/AkrKKLkLqStuZP2OS7ruYDA
Dealers like Granger Motors expected the same, according to Zach Westrum, who inherited the company from his father. Westrum considered the Bronco an opportunity to become a bigger player in the market of 3,000 or so Ford stores, so he offered a set price, $1,000 below MSRP. At the time of the launch, with the first Broncos still almost a year away, many dealers refused to agree to any sort of price, so Granger’s offer drew reservations from all over the country — 1,300 in all.
However, in a conference call with Ford two months after it started taking deposits, Westrum said he heard the term “allocation formula” and quickly realized his strategic sales coup would turn into a supply nightmare. He describes the moment as “a gut punch.”
Using an allocation formula is a well-worn strategy by which a carmaker decides where to ship its finished vehicles. With a coveted model, priority typically goes to larger dealers and those who hustle to sell less popular models. With the Bronco, Ford said only half of its shipments would be routed based on online reservations; another quarter would be sent based on the location of the dealerships, with larger markets getting priority, and the final 25% would be sent based on historic volume of sales, with bigger, busier stores taking precedent.
Granger figured it had more Bronco reservations than any other store in the nation, but it was a mid-size dealer in corn country; Ford’s equation would favor larger dealers in massive car markets like Dallas and Los Angeles. “I thought it would be first-come, first-served,” Westrum said, “but 50% of the formula was working against us.”
Last year, Granger was able to fill only 150 of its 1,300 orders, almost all of them to customers who flew in, picked up their SUV and drove back out of state.” https://apple.news/AkrKKLkLqStuZP2OS7ruYDA
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