Ford council backs withholding allocation over price markups

Ford Motor Co. has a message for the minority of dealers who are adding significant markups to its hottest products: Stop it, or we're cutting you off.

"We have very good knowledge of who they are," CEO Jim Farley said in February. "And their future allocation of product will be directly impacted because of that policy."

Tim Hovik, chairman of the Ford National Dealer Council, said the organization endorses the factory's hard-line stance when it comes to selling electric vehicles such as the F-150 Lightning.

"Why we support that is, we're entering a market that has different competitors," Hovik, owner of San Tan Ford in Gilbert, Ariz., told Automotive News. "And one of the things those competitors talk about a lot is transparency. As we enter into a space that's different form the traditional industry, we need to be nimble and forward-thinking."

The markup issue has caused a stir online, with angry customers taking to Twitter and message boards to voice their displeasure. Negative brand perception, Hovik says, could hurt dealers trying to compete against brands such as Tesla and Rivian that sell directly to customers.

"They're talking about transparency, and we want to show we can play that game," he said.

Still, Hovik said Ford must continue to work with dealers to ensure they're making a fair profit on the vehicles they sell.

"If we can ensure that margin structure is equitable and makes sense, then the company has more of a sound footing to tell us to sell at MSRP," he said. "If a vehicle has no margin, it makes it not nearly as strong of an argument from the company's standpoint. I think company leadership understands that."