Putting down a deposit with an automaker to lock in a build slot is not a newfound practice, but we’ve seen it used to great effect recently. Whereas in the past this type of vehicle reservation was associated with the most special of Ferraris, Lamborghinis and the like, more mainstream companies like Tesla and Ford are taking customer deposits online nowadays. We recently sat down with Ford’s Chief Product Development & Purchasing Officer Hau Thai-Tang to discuss the deposit method used on the Ford Bronco and Mustang Mach-E, and what it means for buying cars in the future.
“We’d like to do more of this going forward,” said Thai-Tang. “ Some of it is facilitated by COVID, where there’s more and more virtually. I think it’s a great model for us to replicate, there’s a lot of benefits.”
The Tesla Cybertruck and its cringeworthy launch event are somewhat responsible for the proliferation of the deposit method over the past year. The company allowed customers to place down just $100 in order to secure their own Cybertruck build slot on the night of the launch. This quickly resulted in hundreds of thousands of Elon’s rabid disciples throwing down the single Benjamin required for their eternal social media glory. Ford would go on to copy Tesla’s homework with the $500 deposits available for the Mustang Mach-E, as well as the $100 deposit buyers are currently throwing down for the reborn Bronco lineup.
“165,000 deposits is a net number of Bronco and Bronco Sport,” said Thai-Tang in an interview with MC&T.
The volume of reservations has left Ford telling customers that they might not take delivery of their SUV until mid-2022, which is quite a long time. The Blue Oval has also noted that this timeline could change once official ordering opens for the Bronco models, but this is what their current reservation numbers point towards. Despite the somewhat clunky nature in which this deposit method has played out, Ford is working to adapt as it does hold some serious benefits for the Blue Oval and their customers.
“We’re looking at streamlining the process… things like how do customers go about putting down money, to partnering with our dealerships to basically have customers choose their dealer as part of the deposit,” said Thai-Tang. “ We lowered the financial threshold (with Bronco deposits)… those were learnings from the Mach-E process. The benefit for us isn’t just dimensioning the demand, it’s really understanding specifically what the customers want, being able to coordinate that with the dealers, and then working through the value chain with the supply base to make sure we have the right product mix.”
The deposit system achieves two goals for an automaker: it allows the company to gauge interest in a vehicle as well as how buyers may choose to spec them. Ford sent out an email to current Bronco reservation holders earlier this week, which allowed them to gauge interest in specific content packages in order to notify suppliers. This wouldn’t have been possible if they didn’t already have a list of everyone who is enthusiastic about buying a Bronco in the first place. From a business perspective, this trend doesn’t appear to be going anywhere soon.