Kevin Klimek’s lifelong loyalty to Ford hasn’t broken, but it’s bending.
When Ford launched a website to field new Bronco reservations in July 2020, Klimek, a 52-year-old network engineer, was hovering over his computer like a teenager keen on concert tickets. He put down his US$100 deposit and figured if his wasn’t the very first booking, it was close.
Today, Klimek is around number 400 in the Bronco queue at Granger Motors, just outside of Des Moines, Iowa. The family-owned dealer receives about 11 of the SUVs every month. At that pace, Klimek, a Mustang owner who has never bought another brand of car, will get his Bronco nearly five years after he put his deposit down.
“I’m a realist,” he said. “I know it’s a hard time to launch a vehicle. What bothers me is seeing people on social media saying, ‘I just put my order in and I already got a VIN number.’”
As Ford’s Bronco tries to surmount a supply chain disaster exacerbated by the pandemic, Twitter-fueled outrage over how the rigs are doled out risks tarnishing the company’s hot streak. The high-profit, hot-selling Bronco has become a big business for Ford since it went on sale last year. It is key to helping finance Ford’s US$30-billion commitment to roll out electric vehicles; that figure is growing by as much as another US$20 billion to convert factories to build EVs, Bloomberg recently reported.
Ford convinced its most loyal customers to order vehicles months in advance, but the line of reservations has been far from first-come, first-served. Large dealerships are taking priority over smaller stores in the digital queue, primarily disadvantaging rural customers. And Ford has acknowledged hundreds of dealers are charging over the sticker price, which those stores call a “market adjustment.”
The Bronco market is wild and no one appears to be breaking it. And the waiting is the hardest part.
“It’s really frustrating; it’s frustrating for everyone,” Ford Chief Executive Officer Jim Farley told Bloomberg. “All we can do at this point is scale as fast as we can and break the constraints and communicate to (buyers) what’s realistic.”
Farley and his predecessors have never before had to grapple with a market dynamic like this. The new Bronco was the resurrection of a storied model years in the making. Hyped to a frenzy on social media and message boards, it became one of the most-anticipated vehicle launches in 2021.
Ford, anticipating runaway demand, set up a digital reservation system, a nod to the socially distanced order of the day and a smart way to handicap what buyers would want months before production. The company would not have to guess, for example, what would be the most popular color or what share of buyers would prefer two doors to four. Customers, in turn, did not need a test drive to be sold. But they did have to sit on their thumbs for a while.
Pre-production 2021 two-door Bronco Black Diamond series in Cyber Orange Metallic Tri-Coat with available Sasquatch™ off-road package. Photo by Ford
What irritates buyers isn’t so much the length of the wait as its inequity. These consumers were under the impression Ford would distribute its seminal Broncos entirely based on the order in which it received reservations. Dealers like Granger Motors expected the same, according to Zach Westrum, who inherited the company from his father. Westrum considered the Bronco an opportunity to become a bigger player in the market of 3,000 or so Ford stores, so he offered a set price, $1,000 below MSRP. At the time of the launch, with the first Broncos still almost a year away, many dealers refused to agree to any sort of price, so Granger’s offer drew reservations from all over the country — 1,300 in all.
However, in a conference call with Ford two months after it started taking deposits, Westrum said he heard the term “allocation formula” and quickly realized his strategic sales coup would turn into a supply nightmare. He describes the moment as “a gut punch.”
Using an allocation formula is a well-worn strategy by which a carmaker decides where to ship its finished vehicles. With a coveted model, priority typically goes to larger dealers and those who hustle to sell less popular models. With the Bronco, Ford said only half of its shipments would be routed based on online reservations; another quarter would be sent based on the location of the dealerships, with larger markets getting priority, and the final 25 per cent would be sent based on historic volume of sales, with bigger, busier stores taking precedent.
For every rugged photo from Ford’s PR team on social media, there is a long tail of sharp comments with the same refrain: where’s mine?
Granger figured it had more Bronco reservations than any other store in the nation, but it was a mid-size dealer in corn country; Ford’s equation would favor larger dealers in massive car markets like Dallas and Los Angeles. “I thought it would be first-come, first-served,” Westrum said, “but 50 per cent of the formula was working against us.”
Last year, Granger was able to fill only 150 of its 1,300 orders, almost all of them to customers who flew in, picked up their SUV and drove back out of state. In October, Ford tweaked the formula further, this time adding to the equation sales of Bronco Sport, a smaller sibling model that launched in late 2020. Granger slashed prices on Bronco Sports, but with only a few weeks left in 2021, it did little good. At the start of this year, Westrum’s Bronco deliveries slowed to a crawl.
“I get the reason for an allocation formula, and I actually don’t think it was that inequitable,” he said. “The frustrating thing here … is that Ford is moving the goal posts, and how is a customer supposed to be aware of that?”
2022 Ford Bronco Everglades Photo by Ford
The drama is spilling over on social media. For every rugged photo from Ford’s PR team — every proud post from a new Bronco pilot — there is a long tail of sharp comments with the same refrain: where’s mine?
Standard economics would suggest Ford simply boost supply to build its way out of this. But the Bronco shares a Wayne, Michigan, factory with the Ranger pickup, another popular model. Even if Ford added a third crew at the plant, computer chips and other parts are still scarce.
“I would say right now is not the best time to do that,” Farley explained. “And I’ve learned in this business that it’s better to have too few.”
Meanwhile, Ford is further stoking demand. This week, it unveiled a new version of its Bronco dubbed the Everglades edition, complete with a 10,000-pound winch on the front bumper and an engine snorkel for fording deep water. Ford said for the moment, the model is only available for existing Bronco reservation holders.
When Ford splashed the rig up on Twitter, one response read: “Looking forward to seeing this on Ford lots in 2030.”
Keyword: Dude, where’s my Bronco? Ford customers, dealers play waiting game