Dealers problem

Dealers problem

LMB | June 20, 2013

Thanks! Fascinating - for those of us who are fascinated by this kind of thing. I know I'm unusual in this respect.

Over in the Virginia dealer problem thread, the point of view was advanced that these issues probably won't have a significant impact on sales even in the short term. I agree with that. Most people I know, when offered an opportunity to do a little extra leg-work to buy the car they want without having to talk to a dealer, would probably jump at the chance.

However, we shouldn't just let this thing go on without speaking up. This is another, albeit less crucial, way in which Tesla may change the world for the good for automotive consumers, and we should add our voices to the discussion at the state level wherever this comes up.

I think the idea that manufacturers should be free to sell, and people free to buy, using whatever sales model the maker chooses, has broad appeal across the political spectrum, and something we could all agree on.

I could imagine a situation where in any given state, manufacturers could be required to use one sales one model or the other, but not both. That would solve the argument that manufacturers shouldn't be competing with their franchisees. But I think most people not in the auto dealers' pockets (*cough* legislators) would feel this was fair and only right. | June 20, 2013

LMB +1

AmpedRealtor | June 20, 2013

This issue is beyond simple. Apple can sell Apple products at Apple's stores, why can't Tesla sell Tesla products at Tesla stores? Why are the two not equivalent? And has anyone thought about asking our illustrious legislators this most clear question?

hamer | June 20, 2013

Many have asked them that clear question and they obfuscate. You can ask all you want to, but you'll never get a, "Gee. Why didn't I think of that. You're right, of course."

DouglasR | June 20, 2013

It's pretty simple: dealers have a vested interest in preventing this from happening, not because Tesla poses a threat, but because it is seen as the camel's nose under the tent. If TM is allowed to do this, the other manufacturers will not be far behind. Those dealers have a lot of clout at the state level. They make a lot of campaign contributions, pay a lot of taxes, and generally are deeply involved in local politics. So even though 90%+ of the public would like to see direct sales, they are no match for the forces arrayed against this model.

Colasec | June 20, 2013

That article is very interesting and provides a clear explanation and background - thanks for sharing. Here are two points that I found to be interesting:

"The total value of new car inventory held by the 20,700 franchised new car dealerships in the United States near the end of 2008 was about $100 billion and the annual carrying cost of that inventory was estimated as $890 million."

"Based on an average vehicle price of $26,000, total cost savings in the order-to-delivery cycle were estimated as $2,225 or about 8.6%."

Tesla's doing the right thing in so many ways...