R900m-plus investment rollout on the cards for Ford dealership network

The Ford dealership network will see a R900-million-plus investment rollout over the next three years.

The money will not be spent by Ford, but by its partners and dealership owners, such as Motus, NMI and Super Group.

Ford Motor Company of Southern Africa (FMCSA) network operations manager Kuda Takura says the investment follows a rework of Ford’s dealer design language.

The goal is to have an open, transparent facility that is less transactional, and with increased focus on customer relationships, social interaction, merchandise, accessories and lifestyle.

The US car-maker’s in-house research shows that new-vehicle sales can increase by 26% at upgraded dealerships, with profits on average up 27%.

The three-year investment programme will kick off with 20 projects this year to the value of R292-million; 18 projects next year to the value of R300-million; and 19 projects in 2027 to the value of R310-million.

Ford has 118 dealers in Southern Africa and a vehicle parc of 527 000 vehicles. The group also has an engine, as well as vehicle assembly plant, in South Africa, and is one of the country’s big-three auto exporters.

When considering local sales, the blue oval was number four in the local market for the first six months of the year.

Ford Motor Company Africa president Neale Hill says the dealership investment programme comes amid a “very, very competitive landscape”, with the local market witnessing a plethora of new market entrants.

He believes the investment will serve as a boost for the 103-year-old company’s competitiveness in the local market.

While the South African new-vehicle market has seen sales increase by 13.5% in the first six months of the year, Ford could not quite match this tempo, with sales up 7.9%.

Hill notes that the company had been lean on Ranger pickup inventory early in the year, with the situation improving from April onwards.

He adds, however, that the brand is still not “where we want it to be”.

FMCSA sales operations director Ryan Searle notes that Ford has no vehicle on offer in the highly popular below-R500 000 category.

According to Hill, there is also no new Ford small car in the pipeline to ensure future participation.

Safeguard Local Manufacturing Hill regards the global automotive industry as finding itself in a “very interesting state of flux”, with new brands increasingly doing battle with established brands, and petrol and diesel being challenged by new propulsion options.

US President Donald Trump has now also added to this already volatile mix by throwing “a rooikat” among the pigeons with his raft of tariff introductions.

“There is a lot of turmoil and it will take a while to settle down,” says Hill.

“We [Ford South Africa] are not affected by the US tariffs, as we do not export to the US.”

He warns, however, that the 25% tariffs imposed on South African-made vehicle and parts exports to US is of major concern to the local automotive industry in general, as well as the domestic economy.

He also warns against domestic auto industry production being displaced by imported goods, as this is the country’s largest manufacturing base. “Once you lose your automotive manufacturing sector, you never get it back.”