Dude, Where’s My Bronco?

Dude, Where’s My Bronco?

Kevin Klimek’s lifelong loyalty to Ford Motor Co. 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 $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 $30 billion commitment to roll out electric vehicles; that figure is growing by as much as another $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.”

Dude, Where’s My Bronco?

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.

Susan Joy Paul, who writes guide books about the American West, decided to buy a Bronco months before Ford started taking orders. Her work requires extremely rugged travel and her 2009 Suzuki SX4 is tired. “I drive places I really have no business driving that car,” Paul explained from her home in Colorado Springs. 

Although she reserved her Bronco on day one (a two-door in Outer Banks trim painted Velocity Blue), Paul’s Suzuki still serves and will have to for at least a few more months. “A lot of people I know have walked away,” she said. 

Dude, Where’s My Bronco?

What irritates buyers like Paul 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% would be sent based on historic volume of sales, with bigger, busier stores taking precedent. 

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% 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?”

Dude, Where’s My Bronco?

Ford said the supply-demand imbalance is confined to a limited number of shops and that its allocation system treats dealers fairly. It advises its store managers not to take orders in excess of what they “know they can fill,” the company said in an emailed statement. As for waiting buyers, it acknowledges that some “may be waiting longer than expected. If a customer isn’t happy with their dealer experience, they have an option to transfer their reservation or unscheduled order to a different dealer.” 

Granger, however, isn’t an outlier. Ford dealers all over the country are in a similar predicament, generally small stores that agreed early to sell the vehicles at or near the suggested retail price. For example, at Stephens Automotive Group, a tiny dealership in rural Danville, West Virginia. Its reservation list at the moment is a little over three years long.

General Manager Chase Barton said Ford should have expected some of its stores to offer slight discounts; after all, new vehicles account for only slightly more than half the revenue for U.S. car dealers. Other lines of business, including used vehicles, maintenance and financing are more profitable.  Discounting is what normally happens, “not just in the car business, but any business,” Barton said. “You’re always looking for an edge and this was an edge for us.”

Plenty of people, however, are happy to pay more, including many who weren’t prescient enough to place a Bronco order in 2020. Hundreds of U.S. dealers are charging well over sticker price, irking executives in Detroit. Farley estimates about 10% of the company’s stores are overcharging. “We’re dealing with that,” he explained. “The severity for them is that they’ll lose future allocations, which would be very severe.”

However, Ford also has loosened rules about how closely dealers have to stick to the reservation line. At first, the company required that 80% of new Broncos be matched to a name on the digital order list, according to several dealers; today that’s just 60%. So four out of 10 new Broncos can go to a walk-in customer or the highest bidder.

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? “It’s just a bad look for Ford,” Joy Paul said. “I’m sick of hearing people who ordered a year or two after I did saying ‘Oh, it’s worth the wait.’”

Dude, Where’s My Bronco?

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.”

At the same time, the company is doing its best to put a sticker over the buyer backlash, literally. Paul has received a few shipments of Bronco-branded trinkets and apparel. John Felice, managing partner at the Motormindz consultancy and Ford’s former vice president of U.S. sales, said that’s an old strategy — handing out swag to reduce the defection rate. “With hot products like the Bronco,” he said, “all an automaker can do is try to keep buyers informed and rewarded with goodies.”

The company is also making good on last year’s pricing for early customers who have yet to get their SUV and is letting customers transfer their orders to different dealers.

None of this has kept the company from doubling down on digital orders. It aims to get 40% of U.S. sales in advance online and buyers are already queuing up for the F-150 Lightning, the electric pickup that will hit streets this spring. Ford, perhaps skittish about another waitlist fiasco, has stopped taking orders for the truck, while it scrambles to increase capacity. There is no word, yet, on how the company will handle the allocation of the Lightning.

As for the Bronco reservation queue, Klimek and thousands like him are just hoping that it speeds up somehow. “It’s a want, not a need, so I’m waiting it out,” he said. But at the Granger store alone, there are almost 600 Bronco customers behind him in line, which, at the current rate will take almost eight years to fill. 

“I really don’t know what we’re going to do,” said Westrum. Some of his Bronco customers are giving up and buying something else – say, a Jeep Wrangler. 

Granger, it turns out, sells those too. 

©2022 Bloomberg L.P.