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Texas just shut Tesla down on the state level

Tesla CEO Elon Musk is determined to win the dealership fight by any means necessary -- even going to the feds.

A new report from Automotive News says Musk may take the dealership fight to the federal level since working at the state level hasn't been completely successful.

Here's the deal: Musk believes that auto dealerships don't do a very good job at selling specialty cars like Tesla's high-end electric vehicles (Roadster, Model S). Hence, he's looking to run his own Tesla stores around the U.S. where he believes his cars will get a fair shot at being sold. 

However, auto dealerships are fighting back. If Tesla were to succeed at opening its own dealerships, other automakers could try to do the same. The National Automobile Dealers Association (NADA) said that dealerships are necessary to ensure competitive prices for customers, and that it will continue to defend franchise and consumer laws in the states.

While Tesla has been able to fight off auto dealership assaults in some states -- like North Carolina -- it has had a more difficult time in others, like Texas. The state has laws that protect the franchise dealership system where car manufacturers are not allowed to run and own dealerships -- and Texas isn't looking to budge on that issue.


Musk has worked quite a bit to eliminate the conventional dealership model for his cars in Texas, going as far as supporting a recent Texas bill called House Bill 3351, which would allow distributors and manufacturers of electric vehicles (EVs) only to sell directly to customers without the use of dealerships. He also offered to build a second manufacturing plant in Texas, and is even trying to appeal to Texas consumers by discussing a design for an electric pickup truck that would be stronger than any current gasoline truck.

Tesla made a case before the state legislature this past session that Tesla should be one exception to the state laws, and be allowed to sell its cars to the public directly. The state legislature blew it off without even taking a vote, and that was that. According to NPR's State Impact, the reason was because Tesla failed to lobby as much as the dealership associations. Tesla spent about $345,000 in lobbying while dealerships spent about $780,000.

Texas isn't alone in attempting to keep Tesla at bay. New York, Massachusetts and others have attempted to shut down Tesla's stores as well. 

With that, Musk is looking into taking his fight to the federal level in order to bypass each state's restrictions. Musk may lobby Congress or file a federal claim saying that the state laws banning Tesla-owned dealerships are unconstitutional. 

Musk said in April that he'd be willing to make the fight a federal battle. 

"If we're seeing nonstop battles at the state level, rather than fight 20 different state battles, I'd rather fight one federal battle," said Musk.

Sources: Automotive News [1], [2]



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Nope
By Motoman on 9/17/2013 1:00:25 PM , Rating: 5
quote:
The National Automobile Dealers Association (NADA) said that dealerships are necessary to ensure competitive prices for customers


Um, no. Dealerships in no way ensure competitive prices. They're an unnecessary middleman that's just simply woven itself into the political fabric of our governments, and they want they cut on each sale - even though they're not needed. In point of fact, their existence *necessarily* INCREASES prices for customers. Granted that the dealer has to make some amount of profit above cost.

If manufacturers want to sell straight to consumers, it would cost less - because of the lack of the middleman. And there's still the *exact* same price competition, granted that more than one manufacturer is selling the same thing.

Look at ALL THE OTHER industries in which there is no forced middleman/dealership. If it was "necessary" to have such a middleman for cars, why is the same thing not true for ALL products that consumers buy?

Answer: because it's a lie.

Dealerships are useful because they distribute inventory. And of course auto owners need repair shops and access to warranty services. But "necessary" to ensure price competition? Please. GTFO.




RE: Nope
By Flunk on 9/17/2013 1:12:01 PM , Rating: 2
Maybe if there were only 2 or 3 auto manufacturers, but in this market you're definitely right.


RE: Nope
By Motoman on 9/17/2013 1:23:12 PM , Rating: 4
2 or 3 still have to compete. If there were any validity to this argument at all, any and all markets where manufacturers *do* sell directly to customers would be all f%cked up somehow.

But guess what? They're not.


RE: Nope
By Flunk on 9/17/2013 2:01:48 PM , Rating: 2
No, 2 or 3 are a small enough number to collude on prices like cable companies, cell phone companies, phone companies and most other limited-market businesses do.

My point is that the argument is ludicrous considering the sheer number of companies building vehicles.


RE: Nope
By Flunk on 9/17/2013 2:03:52 PM , Rating: 3
This is actually why the dealership laws exist at all, there were only a very small number of manufacturers who colluded on pricing.


RE: Nope
By Motoman on 9/17/2013 2:25:46 PM , Rating: 2
What's to stop a small number of dealers in a given area from colluding?

This doesn't fix the issue. And, as noted, if it was an *actual* problem we'd see it in *all* such markets. We don't.


RE: Nope
By Solandri on 9/17/2013 3:11:47 PM , Rating: 2
The fact that you can easily shop outside the area covered by a small number of dealers. I'm shopping for a car right now, and I'm using a 150 mile radius circle to search for best prices. I'm even checking a 500 mile radius now and then in case there's a really good deal a little further out there.


RE: Nope
By Motoman on 9/17/2013 4:48:43 PM , Rating: 2
...a lot of people live in places where there's not anything for 150 miles around. And regardless, whether a shop is 150 miles or 500 miles away, that wouldn't stop collusion. Especially in the digital age.


RE: Nope
By Alexvrb on 9/18/2013 12:00:14 AM , Rating: 2
You asked what's to stop a small number of dealers in an given area from colluding. He replied to that, and now you're kind of throwing a different argument around. 150 miles... 500 miles... digital collusion. Well golly gee if factory owned dealers doesn't fix that, nothing will!

If you live someplace where you don't have anything around, there's nothing to stop you from getting boned either way - except for used cars. Realistically, whether private or factory owned, prices aren't going to go down. They'll charge you whatever they can get away with... quite similar to today!

I've seen surprisingly large discrepencies in pricing between dealers if you are willing to travel even 50 miles. Imagine if ALL of the dealers have the same "owner" - the manufacturer. Not only is normal selling price going to stay the same, now if you're interested in a particular model, you can't even play two same-marque dealers against each other.


RE: Nope
By Motoman on 9/18/2013 5:29:19 PM , Rating: 2
Sorry, but reality called and wants to let you know that you're wrong.

All you have to do is realize that if middlemen were a requirement for competitive pricing, then direct sales from manufacturers to consumers would be troublesome in all markets.

You can't say that middlemen are necessary for car sales, but not necessary for anything else. The universe doesn't work that way.


RE: Nope
By crimson117 on 9/17/2013 3:46:28 PM , Rating: 2
2 or 3 is still few enough for an oligopoly - look at the phone companies, how Verizon and AT&T both settle around the same high prices, and they sell basically the same plans as each other.

There are 10+ auto manufacturers, across many budgets, so there's competition there.


RE: Nope
By Motoman on 9/17/2013 4:52:08 PM , Rating: 2
quote:
2 or 3 is still few enough for an oligopoly - look at the phone companies, how Verizon and AT&T both settle around the same high prices, and they sell basically the same plans as each other.


There are artificial barriers around some industries, like limited amounts of bandwidth available, or maybe local governments giving monopolies/duopolies to cable companies, etc. So those are bad examples.

And the number of auto makers doesn't really matter - if it's 2 or 10, you could still get collusion - active or passive (active collusion is when the gas station on one side of the street calls the station on the other side of the street and they both set gas to $4 a gallon. Passive collusion is when one gas station changes it's price to match the other station every time they change it without any active discussion).

And...ONCE AGAIN...if such concerns were valid, we'd see problems in *all* markets where manufacturers sell directly to consumers. Not just ones where artificial forces create monopolies/duopolies/etc.


RE: Nope
By flatrock on 9/17/2013 2:29:12 PM , Rating: 2
I'm not convinced that dealerships really increase costs all that much.

If the manufacturer runs the stores they still have to pay employees, managers, run the service part, and the used car business. The used car part seems like a particularly poor fit, but trade-ins are an important part of auto sales.

Overhead doesn't go away when you remove the dealerships, and like any owner the car company is going to expect a reasonable return on the money invested in the store itself. There is additional capital investment, additional costs, and additional risk. Stockholders will demand additional revenues to maintain profit margins. That means that you will likely just end up paying about the same amount in the end.


RE: Nope
By Keeir on 9/17/2013 3:04:10 PM , Rating: 5
quote:
I'm not convinced that dealerships really increase costs all that much.


While what you say is "true". It is also true that dealerships do not -decrease- price.

For GM, the dealership network is large enough to ensure most customers end up with the same level of service (with ~25% significantly worse or better) however crappy that may be.

For companies/brands like Telsa, Smart, Fiat, etc, the a bad dealer can spoil large areas and decrease/alter brand perception significantly. Or two competing dealerships.

But without the requirement of dealerships, companies like GM even could go to internet ordering, flat pricing, service contracts, etc. These types of options could allow for significantly reduced overheads which -could- be passed on to the consumer! I wonder what percentage of consumers would wait 2 months (on a "custom" order) for a price decrease of 5-10%?


RE: Nope
By Solandri on 9/17/2013 3:18:14 PM , Rating: 2
Yeah, dealerships make less sense today when you could conceivably custom-order a car online and simply wait for the manufacturer to ship it to you.

They made a lot more sense back in the day. Contrary to the above posts condemning them, they were actually good for the manufacturers too. The dealership did all the local market research work to decide how many of each model car to order, and assumed the risk of cars cluttering their lots if they overestimated and didn't sell. The manufacturer could then concentrate on building cars, instead of on market research and warehouse storage.

The logical solution here is that low-volume car sales should be exempt from the dealership requirement. It makes no sense to require dealerships if your volume would only make it practical to have a dozen dealerships nationwide. Likewise, the dealerships are going to fight Musk's proposal that EVs be exempt, because they can conceive a future where EVs are the majority of car sales.


RE: Nope
By ebakke on 9/17/2013 3:37:53 PM , Rating: 3
Your solution turns a two sentence law into a two paragraph law. Which will later be amended for some other "logical reason" to include another 4 paragraphs to remedy a different unintended consequence.

The solution to this problem is not more government. Just strike the laws and let individuals freely engage in commerce with one another however they see fit!


RE: Nope
By artemicion on 9/17/2013 4:49:42 PM , Rating: 3
I find it ironic that a supposedly red state like Texas has a law in the books like this one that unnecessarily regulates businesses.

Just goes to show you that political rhetoric is mostly hogwash. Obviously, Texas republicans are more interested in pandering to their constituents (local car dealerships) instead of adhereing to their political philosophy of less government. De-regulating the industry would hurt the local car delears that vote for them and would primarily benefit out-of-state car manufacturers who can't vote for them.


RE: Nope
By ebakke on 9/17/2013 4:57:51 PM , Rating: 4
Republicans stopped caring about small government ages ago. The only difference between the GOP and the DFL today is which type of government intrusion you'll get. They both expand the size/scope of the government, and they both can't figure out how to balance a budget. The GOP wants to bring in less than they spend, and the DFL wants to spend more than they bring in.


RE: Nope
By Solandri on 9/18/2013 2:16:52 AM , Rating: 2
You're confusing Republican with Libertarian. Libertarians believe in less government regulation. Republicans (the non-Libertarian ones) believe in whatever laws give businesses in their governing region an advantage over businesses outside it. In this case, since the auto manufacturers are outside Texas while the dealers are within Texas...


RE: Nope
By drycrust3 on 9/17/2013 4:30:13 PM , Rating: 2
quote:
For companies/brands like Telsa, Smart, Fiat, etc, the a bad dealer can spoil large areas and decrease/alter brand perception significantly.

Not being an American, I would have thought any reputable manufacturer would stipulate things like the customer service standards, visibility from a main road, and amount of departure from their recommended pricing a dealer can offer when putting out tenders for dealers in an area. What is to stop a manufacturer from terminating their contract with a "bad dealer" if that dealer fails to comply with the terms of their contract?
To me, the only way a manufacturer makes any money is at the till, i.e. cash from what is sold. If a car show room has no sales, then the manufacturer won't get any money. If dealers in Texas thought they could make a mint out of selling exclusively Tesla cars at the recommended prices with the customer service standards, then Tesla wouldn't be having this fight with Texas.


RE: Nope
By DanNeely on 9/17/2013 4:49:37 PM , Rating: 2
At some point in the past the existing dealers managed to get contracts that made it virtually impossible for car manufacturers to revoke their franchises. Historically when the car companies cut a brand they had to give the dealers affected a franchise for one of their other makes or spend a huge pile of money to buy them out.

GM and Chrysler both used bankruptcy as a club to cut down the worst performing of their dealers in areas where they had a lot more than they needed; and their dealer networks were huge compared to their Asian competitors. ex Pre-recession numbers had GM with 4x as many dealers as Toyota but selling about the same number of cars. Chrysler was even worse off with 3x as many dealers but was selling less than half as many. AFAIK despite the cutbacks a few years ago their dealership networks are still much larger than the competition.

The only real leverage the car companies have over their dealer network is that they can offer better showroom payments to dealers who match the official style/layout/appearance guidelines.


RE: Nope
By Keeir on 9/18/2013 7:42:02 PM , Rating: 2
quote:
Not being an American, I would have thought any reputable manufacturer would stipulate things like the customer service standards, visibility from a main road, and amount of departure from their recommended pricing a dealer can offer when putting out tenders for dealers in an area. What is to stop a manufacturer from terminating their contract with a "bad dealer" if that dealer fails to comply with the terms of their contract?


Well, for one thing the very nature of a relationship. In the US, Car Dealerships have atonomy when setting prices. Where I live, all the VW dealers try to get an additional 1,000-3,000 USD (above MSRP) for Diesel models. VW has hundreds of dealers though... I wouldn't have to go too far to find one willing to go MSRP or "Invoice" etc. I also have a brand image of VW that one dealer can't change. Tesla is going to be hard pressed for a while to meet both of those conditions for the majority of people in the US. Dealing with US car dealerships often (hey, I like cars), I completely understand Elon's desire to have control over initial brand image and brand value in the retail channel.


RE: Nope
By ClownPuncher on 9/17/2013 3:07:55 PM , Rating: 2
The issue is more about crony lobby than cost to customer. Why are we paying jackbooted thugs to bully both us and the manufacturer?


RE: Nope
By mjv.theory on 9/17/2013 3:20:25 PM , Rating: 3
You are probably correct that the existence of "dealerships" is an inevitable cost factor in buying/trading-in, test-drive and servicing. Surely, Tesla must also include this cost in their business model.
However, the rest of the world, that is, all of the world that isn't the USA, manages to cope fine without the need to legally enforce the "right to profit" for middlemen, so wholly unconnected with the manufacturer. The most typical model is a franchise, quite often a multi-manufacturer franchise. But there is no good or logical reason why a manufacturer shouldn't be able to sell direct.
Viewed from outside, this part of US law is utter madness and clearly of no defensible benefit to anyone but the dealerships themselves.


RE: Nope
By Shig on 9/17/2013 3:33:34 PM , Rating: 3
Well Texas banned sales of the Model S, yet people are still driving them in Texas. It's just like the drug war, prohibition, etc. If people want the product, they're going to get the product, you're just hurting your own economy by enforcing draconian rules.

If no one wanted the car it would be a different story, but the model S is the first American made sedan that can compete with BMW 7 series, Mercedes S class, and Audi 8.

Let me reiterate, IT'S AN AMERICAN COMPANY, MORE SALES OF IT IS A GOOD THING.


RE: Nope
By Rukkian on 9/17/2013 4:50:15 PM , Rating: 2
Yeap, now they have to go out of state, to a state that is not stupid, and pay sales tax on a 80k car to that state. A couple thousand of those and loosing the potential for a factory in their state to build a state of the art high tech car that is from an American company.


RE: Nope
By ihateu3 on 9/17/2013 11:28:13 PM , Rating: 2
So the new car dealerships are there for no reason at all? They exist to make no profit???

If they made no profit off of new cars, then they just would not offer new cars at all, plain and simple. They would only be a used car lot like any other millions of used car lots out there...

So going on your philosophy, all new cars sold have no profit at dealerships, but used cars do, so they choose to sell new cars for no reason at all, and sustain themselves from used. Then why do they even offer new cars at all?!?!?


RE: Nope
By Shig on 9/18/2013 3:15:34 PM , Rating: 2
You're mistaken on your logic. The end of the tunnel is that dealerships as a whole in their current form are now obsolete. Automakers need to think of another use for the dealership.

Take Nissan for example, they are turning their dealership network into an EV charging network for the Leaf EV. So while you're charging up for free at the 'dealership' you can go look at the new products they have and have a cup of coffee.

You'll obviously still need dealership networks for maintenance and repairs. Stop being so short sighted.


RE: Nope
By Shig on 9/18/2013 3:17:24 PM , Rating: 2
Edit - By obsolete I mean the sales people are obsolete in their traditional aspect. They'll be more like sales people at the Tesla Motors stores, where you go in, they talk about the car, then if you like it you'll go online and order it, cutting out the 'dealership markup'. Innovation is key, you have to think about dealerships in another light now.

Elon Musk changed everything in only a few business quarters. Silicon valley baby.


RE: Nope
By Motoman on 9/18/2013 5:38:09 PM , Rating: 2
Where in the f%ck do you get the idea that dealers would have to sell cars for no profit?

If GM/Ford/et al wanted to remain in the dealer-centric model, then their cars would all get sold via dealers, and the dealers would make money. The point isn't that dealership employees don't deserve to make a living - the point is that the assertion that dealerships are "necessary to provide price competition" is f%cking retarded.

As I have already noted, dealerships serve useful purposes for distributing inventory, and providing access to warranty services and of course regular maintenance and repair.

If GM et al decided to sell directly to consumers, like Tesla does (and like vast numbers of manufacturers in other industries), then maybe things change at dealerships. Maybe all GM cars sell at a fixed rate, and all dealerships get a fixed % of that sale when the car comes out of their inventory...just to think of one example. Or maybe the dealership model stays the same, and dealers try to compete for car sales based on out-servicing the customer. Ooooo...scary idea - gaining customers by providing better service.

Ultimately GM et al would still need the dealer networks - they can't possibly function without them. They *have* to have the inventory distribution, and they *have* to have the availability of warranty services. If stuff changes, the industry will change with it, and dealerships won't be going anywhere.

Only the a$$-smackingly stupid idea that dealerships keep costs down for consumers.


By Mint on 9/17/2013 1:16:06 PM , Rating: 3
but the more I looked into it, the more I realized that the independent dealership model is just a relic from the past.

If manufacturers get a lot of direct sales, they'll have to start compensating dealers for being a showroom and service center or dealers will shut down and the manufacturer will lose sales. It'll be like any other industry. I'm sure Best Buy, Staples, etc. charge for shelf space when they know a lot of customers will go home and buy on Amazon.

I'd recommend a gradual phaseout of dealer legislation, though, to avoid any disruptive damage. Maybe allow 50k direct sales per manufacturer in the first year and then increase the cap slowly year after year. Dealerships shutting down chaotically could leave customers stranded for service.

Will there be job losses? I'm sure, but that's how the private sector works in any industry, and it'll directly translate into consumer savings.




By ebakke on 9/17/2013 1:57:04 PM , Rating: 4
quote:
I'd recommend a gradual phaseout of dealer legislation, though, to avoid any disruptive damage. Maybe allow 50k direct sales per manufacturer in the first year and then increase the cap slowly year after year. Dealerships shutting down chaotically could leave customers stranded for service.
What? You picked a totally random number and made this issue artificially more complex than it already is.

Just remove the laws. Period. Done. The end.

Dealerships aren't going to just shut their doors the following day. Ford isn't going to create an entirely new direct-sales channel overnight. GM may decide "hey, we like selling through dealers." And so on. There'd be no widespread chaotic shutdowns if the state governments simply repealed the laws.


By Mint on 9/17/2013 3:05:29 PM , Rating: 2
I'm just worried that there's a chance of some sob stories about people having nowhere to fix their car when some dealerships shut down. Then we'll hear an outcry of the gov't fixing what wasn't broke, a reinstatement of the law in some states, etc.

Why would GM like selling through dealers? They'd get more profit per car by selling direct.

A repeal of the laws is going to change things drastically over the next 5 years. New car buyers are generally an older crowd, but even they are web savvy nowadays. Other countries are starting to see a standoff between dealers and manufacturers, as this is the time that they are looking to sell direct.


By ebakke on 9/17/2013 3:31:40 PM , Rating: 2
I say we don't worry about hypothetical problems and we instead address the real, current problems. If sob stories arise, we collectively tell the sobbers to grow up and get over it. Government forcing individuals to sell a product in a certain way or not sell a product in a certain way is broken. The only people who can argue otherwise, are those who are benefiting from the force being used against the others.

GM may like dealers for the same reason any other company doesn't sell directly to consumers. I can't buy gasoline from directly from the local refinery. I could only buy my snowblower through a Simplicity dealer. I can't buy nuts/bolts from the foundry.

Simply put, selling directly to the end customer is a lot of extra work. The sheer number of orders you're taking in is much larger (granted, for smaller quantities). You have to figure out how to get the product to the customer. You have to figure out support, repairs, instruction, updates, etc. You have to figure out distribution, and marketing. There are many problems to solve, and for some companies it's worth the extra effort. For others, they sell only to wholesalers. Others, sell through dealers. As with everything else in business, it's a cost/benefit analysis. What's your goal, and what's the cheapest and most effective way to accomplish it.


By Mint on 9/18/2013 2:00:44 PM , Rating: 2
I can't say I disagree with you about legislation. I'm just telling you why I think a phaseout will be more palatable.

You're overestimating the work needed for direct sales, though. Contractors will be lining up at the manufacturer's door to implement a sales and delivery system for even 0.1% commission of the $450B/yr new car market (plus destination). Dealers make most of their money from service anyway, so that's taken care of (service centers aren't closing down, even if they move to smaller lots).

You can't compare cars to other other goods like gas or nuts/bolts. Cars are a huge expense and they're nearly all sold at brand-specific outlets anyway. Can you name anything else that matches those characteristics?

Anyway, I'm not trying to make you empathize with the incoming plight of dealers with direct sales. I'm just telling you that it's going to be disruptive once it catches on.


By ebakke on 9/19/2013 10:54:17 AM , Rating: 2
quote:
I can't say I disagree with you about legislation. I'm just telling you why I think a phaseout will be more palatable.
Humans are resourceful, capable beings. They're more than able to handle the changes that would come about from removing these stupid laws.

quote:
You're overestimating the work needed for direct sales, though. Contractors will be lining up...
Which then just become new "dealers". And thus the original dealers don't have anything to fear. If it'll cost the manufacturers more money to sell direct, that's less of a price difference between the manufacturer and the dealer.

quote:
Can you name anything else that matches those characteristics?
I already gave you one: my snowblower. Or a lawn tractor. Or an agriculture tractor. A new Deere tractor dwarfs the expense of a new automobile, and is sold at brand-specific outlets.

quote:
Anyway, I'm not trying to make you empathize with the incoming plight of dealers with direct sales. I'm just telling you that it's going to be disruptive once it catches on.
And I'm telling you you're speculating. It might be disruptive in some cases. It might not be in others. But in either case, I don't much care. And I'm not sure why it matters. What matters to me, is not restricting the freedom of individuals to interact with others as they see fit.


By Reclaimer77 on 9/17/2013 4:32:26 PM , Rating: 2
There isn't going to be a repeal of any laws. Musk isn't fighting for us. He's fighting for a special exemption for Tesla motors, and that's it. Dealerships aren't going anywhere.


By ebakke on 9/17/2013 5:00:39 PM , Rating: 2
Sadly, you're spot on. The status quo will be maintained.

Sure would be nice though if a few politicians were willing to stand up for freedom and not crony capitalism. Or if the voters would promptly fire any politician who didn't.


By ritualm on 9/17/2013 5:03:02 PM , Rating: 2
Dealerships today are glorified brick-and-mortar showrooms with salespeople working on commission - and with that, some of the more unsavory and unscrupulous practices they employ to push sales.

The first time I shopped for my car, the sales guy took me on a test drive where I was disallowed to make any right-turns. Instead of a "you break it, you buy it" approach, they're not letting me try the car as is while not breaking any local driving safety rules.


By ritualm on 9/17/2013 4:53:15 PM , Rating: 3
Kill the auto dealerships. They're now essentially a cost-plus service.

The price of a car from the dealership might be 60-70% the raw BOM from the automaker itself, 5-10% from local, state and federal taxes/charges. What remains is the cost of paying some guy in suits for commission and dealership's fixed costs.

For the first few years I went to the dealership to change winter tires and basic checkups. When I found out those same jobs can be done at an auto shop for many times cheaper, the only reason I ever go back to the dealership is for product recalls.


Tesla is here to stay
By bigi on 9/17/2013 12:34:27 PM , Rating: 3
Fvck them. Tesla is here to stay.

It is sad that people will go out of state to buy and drive Teslas.




RE: Tesla is here to stay
By Motoman on 9/17/2013 1:01:59 PM , Rating: 3
Has nothing to do with Tesla or not. It has to do with the ridiculous manipulation of the consumer auto market by having state governments require dealership networks.

Good on Tesla for pressing the issue though. The vacated-tube supertrain thing is nothing but a pipe dream (heh), but this is a good social issue that he's taking on this time.


RE: Tesla is here to stay
By Samus on 9/17/2013 1:18:12 PM , Rating: 2
Exactly. These types of laws violate the free market and cripple smaller startup's. The thing is Tesla isn't really a startup anymore...they *could* run a dealership network, but I stand for their reasons not too. Buying a car through a dealer is so stressful I don't even bother. My last 3 vehicles have been from a private party because negotiations are easy, there is no BS fees or paperwork, and it takes 5 minutes, not 5 hours before I'm driving away.


I Like Having Dealers
By drlumen on 9/17/2013 6:42:18 PM , Rating: 1
While I hate the process of buying a new car I am glad that the dealerships are there. If I don't like the price or even the salesperson I can always go to another nearby dealer. That simple point keeps the market competitive.

There will also always be a service center nearby, from a dealership with a vested interest in keeping me happy.

While the dealers may add a nickel or dime that is fine. I have the convenience of sales and service nearby. Plus, it is the American way - own a businesses to make money. I don't fault them for that.

Also, people keep talking about direct sales, not all businesses do direct sales to the public. Look at the major appliance makers. It is unlikely any have a direct sales channel.

All this is really a tempest in a teacup. All Tesla really needs to do is partner with a chain of used car dealers to act as a Tesla dealer. Some paperwork, some surety bonds, some dealing with used car dealers and presto - Tesla has dealerships in Texas. He seems to want to make it harder that it actually is for some reason.

While it has no impact on me personally, there is something to be said about all the people that work at dealerships. To just kick them out into the cold and go to strictly OEM internet sales would lots of people and damage some local economies.




RE: I Like Having Dealers
By rountad on 9/18/2013 11:01:57 AM , Rating: 2
The dealerships should only exist if people want to pay to keep them in existence. That is, if they provide a valuable service.

If you only exist because of a law that requires your existence, what does that say about your value?


REALLY !
By Dr of crap on 9/17/2013 12:32:39 PM , Rating: 2
"...the reason was because Tesla failed to lobby as much as the dealership associations. Tesla spent about $345,000 in lobbying while dealerships spent about $780,000."
This should NEVER be a part of any political issue! NEVER!
Why it is still in force I just do not understand!
Bribery at its best!
LEGAL bribery!




White House petition
By OnyxNite on 9/17/2013 2:19:33 PM , Rating: 2
There was a White House petition on this issue a while back that got enough votes for an official response but I haven't hear anything about a response. It's located here:

https://petitions.whitehouse.gov/petition/allow-te...

I will be interesting to see what the White House says.




hi
By aamori on 9/17/13, Rating: 0
RE: hi
By ebakke on 9/17/2013 3:35:24 PM , Rating: 2
well at least the spam is kinda sorta on-topic now.


dealership model
By DocScience on 9/17/2013 2:32:54 PM , Rating: 2
Dealers serve ONE purpose: local service and parts.

This can be accomplished with other models. And should be.




history anyone?
By Treckin on 9/17/2013 4:50:37 PM , Rating: 2
Just to shine the light of history on this fascinating discussion, the dealership model was created as a method for sheltering auto manufacturers from liability claims brought by their customers (and their grieving families, in the case of motorists killed by faulty vehicles).

The supreme court settled the issue of "privity" when it comes to warranties extended by the manufacturer through the dealership - Henningsen v Chrysler.

Now dealerships serve no real purpose except to inflate prices and prevent new manufactures from entering the market.




Possible Dealers in Texas
By highlineGM on 9/19/2013 1:39:18 PM , Rating: 2
Musk needs to contact Carl Sewell in Dallas Texas to sell these cars. He created the customer service platform that Lexus modeled theirs after. Texas will never change this law to protect franchisees, ask Ford.




By overlandpark4me on 9/19/2013 2:27:55 PM , Rating: 2
They've practically taking over my town with the big "all brand's" stores. Not only are they higher in price,and lower on your trade, they actually put add-on stickers that inflate the value of the car, citing "market adjustment". That's code speak for "screw you, we're the only game in town".

Saw a couple cars that stickered for 75K, and they had a 5 thousand dollar "adjustment" on it.




By vitp on 9/19/2013 3:27:22 PM , Rating: 2
I hope dealerships disappear soon. It is a middle man in a suit that adds no value but costs a lot and make the process of buying a car really lengthy and annoying. Maybe those people will find a job where they actually do something.




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