Amidst December’s heavy snow, Ford of Kirkland dealer Jim Walen was busy brushing off his cars and trucks and directing a snowplow to clear a path for potential customers to reach his business.
Faced with fewer buyers with the economy in recession, Walen and Ford Motor Company are pulling out all the stops to get car and truck buyers in the door. A combination of aggressive vehicle pricing and financing, a “fuel-efficient” F-150 truck that gets up to 21 miles a gallon and award-winning customer service are the strategy he hopes will get the dealership increasing sales again.
“There’s not a better time to buy a vehicle,” he said.
Nationally, Ford is doing better than U.S. competitors GM and Chrysler and passing on emergency federal loans to stay afloat. But nearly all auto retailers worldwide are seeing a steep downturn. Ford’s sales were down 40 percent in January from a year earlier. Weak consumer spending and tight credit markets are spurring the auto makers to offer enticing deals and affordable loans to attract new customers. Ford is projecting sales of around 12 million vehicles for this year.
Back at Ford of Kirkland, Walen said the company’s latest promotion called “Employee Plus” that ended Feb. 4 was successful. He said buyers were offered a discount “employee price,” plus additional cash back rebates on a number of car models. They also offered zero-percent interest financing for the new F-150 truck for customers who chose not to take the added cash back.
Long-term, Walen is relying on brand loyalty, customer service and a diverse range of vehicles that will sell in a tough market. One of those new vehicles is the 2010 hybrid Ford Fusion (at 41 miles per gallon/highway), designed to compete with Toyota’s hybrid Prius and Camry. With 27 of this year’s Fusion model still on his lot (24 mpg/hwy), Walen said it’s time to make a deal.
“You start with the $27,000 price, employee pricing takes it down to $24,000 plus you get a discount on top of that,” he explained.
The combined savings bring the total cost of the compact car down to $21,000.
Financing through their lending arm to customers with credit scores of 620 or better is also keeping Ford of Kirkland chugging along. His top salesman, Todd Ireland, inked a contract for a used XLT Ford Ranger with Issaquah resident Loren Matteson on a recent afternoon. Aretired union employee from a rock and gravel plant, the 71-year-old and his wife have a steady retirement income and own their own home and qualified for a low-rate loan.
“Financing is a big component of our business,” he said. “Now more than ever.”
Matteson said he was looking for an American made truck with four-wheel drive that could make it up his steep driveway. A mixed blessing, the weather actually helped spur truck sales, Walen said, where Ford has done comparatively well.
“Teamsters buy American,” Ireland added.
Taking care of their customers is also a central part of Walen’s business strategy. Service director Tom Olsen, was recently recognized for the dealership’s top customer satisfaction ratings for the four year running.
But doing business in the recession economy has challenged Ford of Kirkland to do more with less. New numbers are showing city sales-tax receipts are trending sharply downward, off 19 percent for November. Walen has seen sales from his lot plummet 25 percent from 2007, forcing him to cut back on his staff. Two years ago, he had 92 employees. Today, he’s got 65 full-time staff. He’s also had to deal with an additional $5,000 more in local business-taxes and set to go higher if he hires back employees.
“We wish they’d try to help business, rather than make us less competitive,” he said.
But there is a silver lining – as demand shrinks, Ford of Kirkland has seen his share of the market grow. They sold 822 vehicles last year, the most in the state of Washington out of 74
Ford dealerships.
Sitting at his desk adorned with a large red “Easy Button,” Walen was confident that the investment made in his customers through deep discounts, financing and customer service has its dividends in the long run.
“Taking care of every single customer pays you back down the road,” he said. “Big time.”