I am starting to wonder if there is a pattern in the making here. Last year, you likely remember, a lot of legacy automaker Ford (F) news emerged about plans to change dealerships, which would focus less on actually having cars in stock and more on providing quiet, welcoming, social spaces to place an order for a car. Not much came of that news, but new reports suggest Ford may not have dropped the idea altogether. Ford investors, meanwhile, were willing to roll with the notion, and sent shares up fractionally in Thursday afternoon’s trading.
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Ford built an entire simulation lab around this topic, reports noted, known as “Ford Signature 2.0.” Ford is hopeful that, one day, every dealership will look like a Ford Signature 2.0 dealership. So what separates Ford Signature 2.0 from what has worked for the last several decades?
Some of the points are more a matter of training than anything else, reports suggest. The dealership staff will be trained with a focus on “…lower(ing) sales pressure to customers.” Staff will focus on “hospitality” as well, and Ford hopes to—brace yourself for this one—redesign the entrances of dealerships to make it “…feel more like you’re walking into a hotel than a car store.” Open-concept showrooms, lounge seating, free food and beverages—that sounds like a loitering charge waiting to happen—and a dedicated greeter round out the notion.
Standing Room Only
While the F-150 has come under some production problems of late since that big supplier fire, Ford is not letting any grass grow under its feet, or under the concept. In fact, Ford just handed out a major new contract for F-150 seating. Adient (ADNT) landed the big contract, which as it turns out, was not a new win for Adient.
Adient has been Ford’s F-150 seating supplier for some time now, reports note, and that combination of “design expertise” and “enhanced craftsmanship” was sufficient to keep Ford coming back to its F-150 seat supplier of choice. Given that I have yet to hear about a recall over F-150 seats, it may just be the company for the job after all. Throw in the fact that the F-150 has routinely done well in the J.D. Power’s Seat Quality Study, and the end result is a strong contender who knew its place and kept it.
Is Ford Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Hold consensus rating on F stock based on two Buys, nine Holds and two Sells assigned in the past three months, as indicated by the graphic below. After a 19.62% rally in its share price over the past year, the average F price target of $12.14 per share implies 7.93% downside risk.
