A year ago, Jannell Ford in Hanover, Mass., promised to charge no more than sticker price for the highly anticipated Bronco SUV. But that was before the industry's microchip shortage caused new-vehicle inventory to dry up.
For Ford's next hot product, the F-150 Lightning electric pickup due out this spring, the dealership is charging a $5,000 premium. General Manager Bill Roderick said he's upfront with customers about the markup and believes it's justified because his store's allocation is expected to be small, given the truck's nationwide appeal and Ford's early production constraints. Jannell Ford last year received just 20 Broncos, which generated low margins after a challenging and time-consuming ordering process.
"It's supply and demand, and for the amount of work that goes into it, it needs to yield a little bit more," Roderick said. "I don't like overpricing anything. I don't want to. But at the same time we have to keep the doors open and feed mouths here."
Heavy demand for the electric truck is good news for an automaker that before the chip shortage often struggled to sell vehicles without big, profit-eating discounts. But Ford now worries that the markups of up to $30,000 some retailers are demanding could be harmful as well, irking the consumers it's trying to win over and driving them to rivals such as Tesla and Rivian that don't have franchised dealer networks.
"That's precisely why we're working with [dealers] to address this as quickly as possible," Kumar Galhotra, Ford's president of the Americas and International Markets Group, told Automotive News. "If that happens, that's obviously a huge disappointment for our brand, for our network and the entire enterprise. For the long-term health of the brand and the company, it's important we stay as close to the MSRP as possible."