Ford to slash ad spending and change its dealers

Ford Motor Co chief executive has that the automaker needs to overhaul its century-old business model.

CEO Jim Farley advocates that the automaker needs to slash advertising spending and rework its dealer network if it is to earn enough profit on electric vehicles to compete with Tesla and others.

Competition is shifting from established players like Ford to newcomers from China and Silicon Valley.

As a result, Ford is reviewing nearly every aspect of its business just months after Farley restructured the company into three units – Ford Pro for commercial customers, Ford Blue for its profitable gasoline-powered trucks and SUVS, and Ford Model E for electric vehicles.

Farley said Tesla, which was founded 100 years after Ford, enjoys a significant cost advantage that has convinced the Michigan-based automaker to consider reducing or eliminating dealer inventories of unsold vehicles and following Tesla in selling some vehicles directly to customers.

Farley said he was “not convinced” that Ford needs to continue buying advertising, especially for popular new electric models like the F-150 Lightning, which is sold out for the first year.

The U.S. automaker spent $3.1 billion on advertising last year, according to the company’s annual report, compared to nothing for Tesla.

Leave a Reply

Your email address will not be published.