Ford Motor Co. is entering the used-parts business in its quest to expand beyond in its core automotive operations.
Within two to three years, Ford wants to operate a used-parts business in every U.S. major metropolitan market. The operations will disassemble used cars and trucks and resell the parts to body shops, insurance companies and retail consumers.
Ford says the enterprise will not conflict with its dealers' operations. But some dealership personnel are not so sure.
The new business represents the latest move in Ford's accelerating strategy to become more than a traditional automotive manufacturer. Ford wants to reach customers in new ways and increase revenues.
The company has turned its goal into a single phrase: to become 'the world's leading consumer company for automotive products and services.'
The recycling operations also further Ford's push to become a more visible environmental leader because the amount of auto parts going to landfills will be reduced.
Ford expects the new company eventually to generate $1 billion in revenue annually in the United States. The company did not give a timetable.
By year end, the used-parts inventory will be available on the Internet for business customers. Individual consumers will be able to search for and buy used parts online next year.
Within four years, Ford's new business will be global. Europe likely will be the next stop after the U.S. launch.
Ford already has displayed its nontraditional approach in Europe. In April, the company spent
$1.6 billion to buy Scotland-based Kwik-Fit, Europe's largest maintenance and light-repair chain.
Ford has not named its new recycling subsidiary. But retail signs for each operation will carry the wording 'an enterprise of Ford Motor Co.,' the same terminology used by Ford's parts unit, Visteon Automotive Systems. Ford has not yet named the executive who will run the venture.
In March, Ford bought Copher Brothers Parts in Tampa, Fla., and now is negotiating additional purchases. The dismantling and recycling industry, which generates
$6 billion annually in the United States, is made up largely of small, independent operators.
'We will be covering a significant amount of the United States and Canada this year,' said Bill Li, the venture's COO.
Ford said its new business will not conflict with the operations of its franchised dealers. Most dealership service customers are new-vehicle owners, not consumers with older cars seeking used parts, Ford said.
But Jack Steinkamp, a spokesman for the Ford Parts Managers Association, which represents 2,000 Ford and Lincoln Mercury parts managers globally, said the new venture potentially could hurt a dealership's parts business.
'If someone has a 1995 Mercury Grand Marquis and breaks their taillight assembly in a parking lot, they normally would come to a dealership and buy a new one,' Steinkamp said. 'But if they can buy a used assembly through a Ford subsidiary why would they come to the dealership? This gives the customer another option that steers them away from the dealership.'
Ron Boyer, the chairman of the Ford Division National Dealer Council and managing partner of Courtesy Ford in Denver, said dealers see little threat from the venture.
However, this week Boyer and other council members are gathering in Detroit for a quarterly meeting with Ford executives and will discuss Ford's widening business strategy. He said dealers want assurances that new ventures do not undermine franchised retailers.