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Ford's Win-Win Opportunity for Specialty-Equipment Business and Dealerships
Ford's Mustang is one of the most popular cars for enthusiasts to customize—now made even easier through the automaker's licensed accessories program.
Ford is the Vehicle Manufacturer of Show for the 2009 SEMA Show, but its support for specialty-equipment companies goes well beyond that. The Ford Licensed Accessories Program offers qualified SEMA members the chance to boost sales of their products through Ford dealerships.
"It is a great concept and we've had a lot of growth with the program," says Ernie Bunnell, vice president of sales and marketing at 3dCarbon of Newport Beach, California.
The Ford Licensed Accessories Program certifies selected non-Ford manufactured specialty products, forms a relationship with the manufacturer, and establishes competitive pricing, says Jim Abraham, licensed accessories manager in Ford Motor Company’s vehicle personalization division. The products are then sold through Ford dealerships.
3-D, which manufactures styling kits, has been a licensed supplier for several years and is the only aero kit company supplying Ford, Bunnell says. Sales grew 30 percent from 2006 when 3dCarbon entered the Ford program until 2008, he adds, declining to discuss actual figures.
Beau Boeckmann, president of Galpin Auto Sports, is also a fan of the accessories program.
"Now we are able to sell Ford-licensed products that have great quality at good prices," he says.
The Ford program helps Galpin sell a wider variety of accessories. Galpin's lawyers were initially "scared" to sell leather interiors without Ford's backing, Boeckmann explains. Now, Galpin offers leather interiors by Ford-licensed Katzkin. Having Ford's stamp of approval reassured more than just the lawyers.
"The customers felt more secure that Ford has put its name behind the product,” Boeckmann says.
|3dCarbon of Newport Beach, California, supplies this Focus styling kit through the Ford Licensed Accessories program.|
In place since 2001, the Ford Licensed Accessories Program has "really gained momentum," particularly in the last three years, says Abraham. About 20 companies are licensed, he says. Abraham declined to estimate how much that number will grow this year. Ford's expanded product portfolio will offer many vehicle personalization opportunities, he says.
The larger-than-usual number of Ford model changeovers in 2009 has put a dent in 3dCarbon's accessory sales, says Bunnell.
"This year had a slew of products change over in mid-year,” he says. "All of our new products are based on revenue from existing products, sales and revenue."
Ford has also begun to offer similar products as a factory option, says Bunnell.
The Ford Licensed Accessories Program also helps sell product by providing financing and warranty support for dealerships selling specialty accessories.
Warranty coverage often does not extend to specialty parts added to a new vehicle. The licensed supplier program addresses that. Ford requires members to back their products with a 3-year, 36,000-mile (4 year/50,000 mile for Lincoln/Mercury) warranty. The warranty is written by the supplier and approved by Ford. It is not a Ford warranty and is not funded by Ford.
Financing for accessories is a big hurdle during tough times like these.
"Most banks aren't covering accessories," says Dave Moulton, head of accessories sales at Cerritos Ford Lincoln Mercury near Los Angeles. Moulton is the creative force behind Cerritos Ford Motorsports, the dealership's customization shop, and says a Ford-licensed accessory label lends credibility to the supplier and the dealership.
"If the product is Ford-licensed, that can help (get financing) with the bank," he says.
Ford Motor Credit can assist with financing for all Ford-licensed accessory products on vehicles that are sold or leased through Ford dealers in North America, says Abraham. Ford Motor Credit can cover other specialty-equipment products for qualified buyers in a vehicle purchase, but it really depends on the dealer, he says.
Ford is pushing customization as a profit center for its dealerships. The automaker launched a new line of accessories at the 2007 SEMA Show. In 2008, Ford began delivering stand-alone accessory displays to Ford dealerships. The Ford licensing program allows specialty parts makers to participate.
|3dCarbon also makes a kit for the 2010 Edge.|
To be sure, there is plenty of room for accessory sales at dealerships to grow. Sales at dealerships accounted for less than 17% of the $32 billion automotive accessories market in 2008, according to SEMA.
"Ford has a strong track record in collaboration with SEMA member companies," says Peter MacGillivray, SEMA vice-president, communications and events. "They have been an active participant in Tech Transfer, measuring sessions and other programs that advance the concept of accessory-friendly vehicles. This collaboration has fueled a special kind of passion for the Mustang and other Ford vehicles."
Ford was also an innovator in transferring technology to specialty-equipment companies before a model launch so those companies could start designing parts for the new models, says SEMA president and CEO Chris Kersting.
Now, Ford has taken that to the next level as the official manufacturer of the SEMA Show.
"At a time when the industry is looking for new opportunities, we're all waiting to see what Ford has for the Show," says Kersting.
— Alysha Webb
Companies interested in becoming Ford-licensed accessory suppliers should send a company overview, a product sample and contact information to Ford Motor Co, Attn: Ford Licensed Accessories Dept., Ste 613, 1800 Fairlane Dr, Allen Park, MI 48101.