Ford Motor Co., concerned about its reputation and customer complaints related to the upcoming launch of the F-150 Lightning, is warning dealers not to upsell reservations for the popular EV truck and also wants customers to sign a contract preventing them from reselling it within a year, according to a letter from the automaker to its dealers.
The warning letter, dated Friday and posted online by the F150gen14.com forum, is addressed to all dealer principals, the general manager and sales managers.
Written by Andrew Frick, Ford vice president of U.S. and Canada sales, the letter began: "It has come to our attention that a limited number of dealerships are interacting with customers in a manner that is negatively impacting customer satisfaction and damaging to the Ford Motor Company brand and Dealer Body reputation."
Examples of these negative interactions include demanding that customers who are already on the reservation list for the 2022 model year F-150 Lightning make additional deposits or payments, the letter said.
"These actions are perceived as threatening customers by withholding their opportunity to convert reservations to orders," the letter said. "This behavior is not allowable ..."
Ford then cites dealer sales and service contract language that requires dealers to conduct their operations in a manner that reflects favorably on dealers, the company and its products.
"The Dealer shall avoid in every way any 'bait,' deceptive, misleading, confusing or illegal advertising or business practices," the letter said.
"If it is determined that your dealership is engaging in such practices, Ford Motor Company reserves the right to redirect that dealerships allocation of the F-150 Lightning" for all of model year 2022, the letter said.
Blocking rapid resale
To help protect the interests of the dealer, however, Ford did write in the letter that it supports modifying the traditional vehicle purchase contract.
In order to prevent people from buying and immediately reselling the pickup truck for a profit, Ford is "offering support for a No-Sale Provision to be signed by the customer at the time of purchase. Dealers may add this language to existing closing forms or create a new standalone document."
Ford provided language that explicitly requires the buyer to agree not to sell, offer to sell or transfer any ownership interest in the Lightning within one year of purchase. If the buyer sells the vehicle within one year, they may face court action that includes blocking transfer of the car title.
This letter was inspired by a discussion Frick had with members of the Ford dealer network on Thursday, Ford spokesperson Said Deep said.
The Free Press confirmed with the Ford dealer community that the letter was sent and received and that a webinar was held with Frick.
However, the Frick call was primarily intended to review year-end sales and what to expect in coming months with the Lightning order bank opening this week, Deep said.
The letter that went out captures the spirit and discussion, Deep said.
He told the Free Press on Friday that customer care is especially important now.
"The all-new F-150 Lightning represents a leap ahead in innovation for Ford trucks and is critical to the Ford brand and our dealerships as we move into a segment we’ve never competed (in)," Deep said. "We are competing with others who have a direct model and we need to be very mindful of how customers perceive Ford and our dealer network. How our dealers treat customers has major implications not only on an individual dealer but the reputation of Ford and our dealers."
Tim Hovik, chairman of the Ford National Dealer Council that serves as an advisory group on strategy and developing issues within Ford, said dealers are pleased.
“The Dealer Council worked with Ford Motor Company and we feel very positive about the letter," he said Friday. "I don't think the letter makes us look bad, at all. We’re coming with a new product, a new way to come to market with that product and it's a hugely anticipated launch. I view the letter more as making sure we’re all on the same page."
Hovik, who also owns San Tan Ford in Gilbert, Arizona, said, "We’re really excited as we get close to launching the Lightning."
The truck is scheduled to be delivered to dealerships in the spring.
Ford received so many reservations for the all-electric pickup that the company had to shut down the reservation process in December.
The company just this week opened up the opportunity for customers to convert their $100 reservations orders to actual purchases. Ford is working through the list in the order reservations were placed since the reveal in May.
⚠️ Ford Warns Dealers Against Additional Deposit / Reservation Requirements For 2022 F-150 Lightning Orders. Supports No-Resale Provisions in Purchase Contracts https://t.co/K6ywob9XqU pic.twitter.com/OFpFiOODn3
— F150Gen14 (@F150Gen14) January 7, 2022
With some 200,000 reservations, Ford also announced this week a plan to ramp up production. And the stock market responded favorably. The cost of the pickup ranges from $39,974 to $92,000 or so, depending on specialty items.
Ford has had an issue with buyers snapping up the popular Ford Bronco and reselling it at profits of more than $10,000.
The Ford Lightning is built at the Rouge Electric Vehicle Center in Dearborn.
This article originally appeared on Detroit Free Press: Ford sends dealers warning letter over F-150 Lightning sales tactics