DETROIT -- Ford Motor Co. is offering extra vehicle allocations and loan assistance to Ford-brand dealers who agree to renovate stores according to Ford's Trustmark Design blueprint this year.
Ford gave dealers the broad outlines of the program at the National Automobile Dealers Association convention in early February. It now has outlined the details in a letter signed by Ken Czubay, Ford U.S. vice president of marketing, sales and service.
The program is voluntary. Any Ford dealer can apply.
"There is no limit to the number of dealers that can apply, but we may be constrained by our resources to work through the design elements," said Ford spokeswoman Elizabeth Weigandt. She estimated the cost to each dealership would be $350,000 to $700,000.
To start, Ford is offering dealers a "design control document" with architectural services that Ford values at $15,000 to $20,000. That document will give dealers an estimate of how much it will cost to redo stores.
Dealers also will get additional vehicle allocations based upon how much they spend to rehabilitate facilities. Ford promises one additional vehicle for every $10,000 spent on renovation, delivered over a three- to 12-month period after completing the work. So a dealer who spends $500,000 would get 50 additional vehicles.
Perhaps most attractive to dealers is the offer by Ford of a Ford Motor Credit Capital Loan package. The company will allow dealers to defer payment on the principal for up to two years on a seven-year loan. Ford also will pay the interest to Ford Credit on the dealer's behalf for up to two years.
"I see that as a real incentive to do this. You still owe the principal. You just don't have it coming out of your cash flow," said Jeff Carlson, president of Glenwood Springs Ford-Lincoln in Glenwood Springs, Colo., who already has applied to the program.
"I've got the oldest dealership in the market," said Carlson. "We have to do something. I need to update my store.
"This is a real opportunity for some of us who have dated facilities to upgrade if the program actually is as good as it was presented at NADA," said Carlson, whose dealership sells about 500 new vehicles a year, including both retail and fleet sales. Carlson's main concern is that if the architectural estimate comes back recommending that he build a "Taj Mahal," it would be outlandishly expensive.
Jon Lind, owner of Burlington Ford and Lincoln in Burlington, Colo., said he would not be applying for the facility assistance right now primarily because his dealership doesn't sell enough vehicles in the town of Burlington (population about 3,500) to justify the expense.
But Lind, who sells about 100 new vehicles a year, applauded Ford for the program.
"It's proactive on Ford's part. Ford's approach is not forcing people to do anything. It seems like when you push, everybody pushes back," he said.
"Ford has been pretty good about the facility deal. They'll come in and tell you. All the communications you get is they want our facility to be clean and operable and at least as good as anyone else's in town.
"My only concern: If you're going to get extra allocation, where's it going to come from -- the guys who aren't doing the upgrade?"