As a car owner, I hate going to car dealers. Whether it is buying my car or having my car served, I feel like being a sheep walking into a cave of hungry wolves.
However, today I would like to make a case to Tesla that the dealership business model has significant downside for automobile makers too.
1. Misalignment of interests between dealers and car makers
It is in the interest of car makers to produce cars that are highly reliable and require very few repairs. However, the opposite is true for the dealers who make most of their profits from repairing the cars.
2. No full control over end-to-end user experience
The car owner has to interact with the dealers regularly over the duration of his ownership for maintenance and repairs. Thus, interaction with dealers becomes a big part of the owner experience. Since the dealer is a third party, the car maker has no full control over that user experience.
Apple's success can be linked its focus on delivering the best end-to-end user experiences: from software design, hardware design to training and serving end-users. I took my iPad and iPod to Apple store for questions and repair. Even though some of my Apple devices were purchased from a third party retailer, I always go to Apple stores for support. Why? Because Apple store employees focus on solving customer's problems, not selling more devices. I never feel that the Apple store employees try to leverage their product knowledges to rip me off.
Reader's Digest 1990 investigative report: only 27% of auto repair shops in Canada were competent and honest.
So I certainly hope that Tesla's customers will always have the option to buy directly from Tesla, and have their cars served directly by Tesla. My fear is that when Tesla becomes a volume car maker, it may adopt the dealership model.
What do you think?