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Should Ford be allowed to sell vehicles on the Internet?

Stephen

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Ford should be fined $1.7 million for Web sales, Texas judge says

December 5, 2000







BY RAJIV NARAYANA
BLOOMBERG NEWS



AUSTIN, Texas -- Ford Motor Co., the world's second-largest automaker, should be fined $1.7 million for its part in selling used vehicles last year on the Internet, an administrative law judge in Texas recommended.


Ford will appeal the Austin, Texas, judge's recommendation, said company spokesman Pete Olsen. The automaker has until Monday to file an appeal, and the Texas Motor Vehicle Board will review the recommendation in January.


The Texas Motor Vehicle Division's enforcement section last year filed a complaint against the automaker and its Fordpreowned.com Web site, which listed for sale mostly Ford cars and trucks on which leases had ended and referred consumers to dealers. The enforcement section said the site violated a state law prohibiting automakers from operating vehicle dealerships.


Ford "was selling directly to retail customers through this Web site," said Karen Cox, a lawyer for the enforcement section.


The company shut down the Fordpreowned.com site in Houston last year after getting a letter from Texas regulators saying dealers participating in the online service could be fined as much as $10,000 a day. The Houston site was started as a pilot project two years ago. Ford still runs such sites in cities including San Francisco, Boston, New York and Atlanta, Olsen said.


"We're not selling direct," Olsen said. "It's an inventory that the dealer purchases from us."


The Web site let consumers view used vehicles. If customers decided to test-drive a vehicle, they picked a dealership and Ford transferred the title to the dealership before shipping the car or truck. If the customer decided to buy the vehicle, the dealer concluded the sale, Olsen said.


The Dearborn, Michigan-based automaker previously had lost a federal court ruling against the Texas Motor Vehicle Division over Fordpreowned.com. Ford has appealed that ruling, in which Judge Sam Sparks declined to decide whether the company's plan violated Texas law. The Motor Vehicle Division, which is part of the state Transportation Department, licenses and oversees auto dealers and manufacturers.


The Dallas Morning News earlier reported the administrative law judge's recommendation.

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Whats everyone think of this? Should Ford be allowed to sell vehicles directly on the Internet?
 



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I don't see why not! Heck I think they oughtta be able to take the dealers outo f the picture and sell brand new cars over the internet, deliver em to your door, custom made! I hate it when you go to ford's web site and you can "build" your own vehicle, and it gives you what it will cost, then it has you get a quote from your dealer and it's usually more expensive then the original quote. I say nuts to that! I hate my dealer and most auto dealers around town and I'd love to take em out of the picture whenever possible!
 






I really don't understand why the government is concerned about car companies selling vehicles directly. I wish they'd stop "helping" us! There has to be a reason why car companies can't operate dealerships, anyone know?
 






i look kinda young (for 29) and every time i pull up to a dealer, (quite often) noone ever even acknowledges me. that pretty much hacks me off! i would rather be able to just go online, pick what i want, finance it online and pick it up whenever it is ready. wouldn't have to deal with the "i'll have to check with my manager" crap either!
 












Look at it from more of a business perspective here. It may hurt the dealers, but also look at another fact. Reality is, Ford's customer service is pretty bad, but we really see it at the dealer level. Online buying will then increase competition among dealers. Dealers will then have to vie for customers, thus improving their Customer Service, overall benefiting you and I. If every customer is important, then your going to treat them with importance. Like with what Doug said, instead of dealers looking at him as "just another kid," he will end up holding a little more weight and importance, as a consumer, competition has made him more valuable, a more important and scarce comodity. Just my 2 cents.

[Edited by NoBoundaries on 12-07-2000 at 09:28 PM]
 






Thats a good point Tim. More of a dealer's profits will come from the service and maintenance aspect of their business also, so they'll have to beef that up too.
 












Originally posted by drmoore71
i look kinda young (for 29) and every time i pull up to a dealer, (quite often) noone ever even acknowledges me. that pretty much hacks me off! i would rather be able to just go online, pick what i want, finance it online and pick it up whenever it is ready. wouldn't have to deal with the "i'll have to check with my manager" crap either!

When I went to buy my first car, I was 17. I knew I could afford a loan up to about $25,000, and knew EXACTLY what I wanted in my vehicle. I went to many dealers and was extremely upset to find many trying ot steer me towards a cheaper car. I mean come on, if someone comes in and says "ok, I want a 98 F-150 brand new, moonlight blue, grey interior, with the premium stereo and cd changer, 4.6L engine, stick shift, supercab, with sliding rear window, limited slip, bla bla" would you even consider saying "let me show you what we have as far as Rangers go? ARGH!
 






[quote from Stephen ] There has to be a reason why car companies can't operate dealerships, anyone know?[/quote]


Who else would they get to buy some of those gawd awful ties :D
 






I don't see what "law" the courts would be using to enforce this. Heck...as far as I can tell they should be able to send it to your door. One of my friends did this with a dodge ram. Why not here. Heck http://www.carsdirect.com does this as far as I know

As for killing the dealers.....I doubt it would. Not everybody would want to spend $15,000 on the net. Some would rather go to the store to get what they want. I know that's how I am. I'd rather drive up the street to get what I want over point and click. Somebody else may be different. If anything this would almost help ford. Some people would price out what they want online and go to the dealer and say......this is what I want and here is what I'm going to pay. On top of that they'll spend less time making a sale and can spend it on service and with the person who is debating about what they want.
 






The problem seems to be just with the Texas law. The car dealers must have a strong lobby in Texas.
It was not all that many years ago that it was illegal for the auto companies to finance the retail sale of their cars.
If the dealers catch on that they will have to get better at service they may try to make it illegal for companies to sell direct in all states.
Oh well, we aint a gonna win so we might as well have some fun....
 






Originally posted by Goober
[quote from Stephen ] There has to be a reason why car companies can't operate dealerships, anyone know?



Who else would they get to buy some of those gawd awful ties :D
[/QUOTE]

Ah good point!

They'd sell em to us paper salesmen Dead Link Removed
 






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