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Bill sponsor received $8,000 in campaign donations from the North Carolina Automobile Dealers Association

Living in the Research Triangle Park (RTP) area of North Carolina, which I nickname Silicon Valley East, I quite frequently see Tesla Model S sedans and Roadsters silently cruising down city streets and interstates. However, the North Carolina Senate Commerce Committee unanimously approved a measure that would make it illegal for Tesla Motors to sell vehicles directly to customers without the ever-present "middleman" in new car transactions: car dealerships.
 
Not surprisingly, the NC Automobile Dealers Association (which represents North Carolina's franchised car dealership) is behind this latest stab at Tesla. But according to NC ADA President Robert Glasser, this isn't an attack specifically aimed at Tesla. Glasser notes that the precedent Tesla has set for direct sales could set into motion a chain of events that would topple the entire dealership model of business.
 
“We care about the franchise system,” said Glaser. “The whole point of the retail system is to protect the consumer.”
 
Of course, Tesla Motors sees things quite differently. “They’re trying to insulate the dealer franchise model from any competition,” said Diarmuid O’Connell, Tesla’s VP of Corporate and Business Development. “It’s a protectionist move to lock down the market so we have to go through the middleman – the dealer – to sell our cars.”

And here's an interesting tidbit that shines a whole new light on the story. Slate reports that Sen. Tom Apodaca, the Republican sponsor of the bill, received $8,000 in campaign donations (the maximum allowed by state law) from the NC ADA.
 
It's pretty clear to see why dealerships are shaking in their boots at the prospect of Tesla (and other auto manufacturers) selling directly to customers. Tesla managed to deliver a whopping 4,750 Model S sedans to customers during the month of April. Compared to other luxury sedans that also dance in the $70,000 to $100,000+ price range, the Model S outpaced monthly sales of the Audi A8 (1,462 units), BMW 7-Series (2,338), Lexus LS (2,860) and Mercedes S Class (3,077).

 Tesla Model S
 
Tesla has sold 80 Model S sedans in North Carolina and has an additional 60 orders in queue from residents. The overwhelming majority of those sales have come via the internet.
 
And one could argue that an electric vehicle like the Model S needs less attention from dealerships due to the much lower maintenance needs of the electric motor and battery pack. Quite simply, there is potentially less to go wrong with a Model S compared to BMW 750i with its twin-turbocharged V8 and 8-speed automatic transmission.
 
Despite this new speed bump in Tesla's road to electric vehicle proliferation, the company has been showered with a wealth of good news in the past week. Last week, Tesla reported its first profit in its ten years of existence and Consumer Reports gave the Model S a near perfect rating: 99 out of 100 possible points.
 
Tesla's stock is up 57 percent since its quarterly earnings were released last Thursday to just under $90/share.

Sources: News Observer, Slate



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Hard to sell cars without dealers
By omgwtf8888 on 5/14/2013 2:34:29 PM , Rating: 2
One key reason to have dealerships is to floorplan cars locally. Car purchases are for the most part emotional. If I am looking online at a Tesla and the desire strikes yet it takes weeks to months to get one.... I might think twice. Also even though the tesla may or may not require as much maintenance, it isnt like a laptop that I can mail back to california. The dealership model was not created due to some conspiracy theory, it evolved as the best way to sell cars. Tesla's ability to sell units will be limited if it can not have units and maintenance facilities in places where people want to buy them. Who knows maybe Tesla can build a deriviative of the dealer model. With Amazon building many regional distribution centers, maybe they can partner up with them for sales and service.

I know all of you recent college graduates keep thinking that the old brick and mortar systems are antiquated but they do employ people. There are lots of dealers employing lots of people. What people do not realize is that either we strive to keep these jobs or our taxes are going to continually going to escalate to pay their welfare.

I grew up near a Ford assembly plant in NJ. Many of the residents worked for Ford. People with low skills/education could find jobs that paid living wages and enabled them to have pride and that pride promoted their desire to see their children do better. Was this the best bottom line deal for Ford? Obviously not! High wages and union benefits reduced profits. So they close the plant and ship the jobs overseas. Ford profits but the country loses as welfare rolls increase and pride decreases.

The reason that the distribution of income has shifted away from the middle class is that we are caught in this tug-of-war. Outsourced jobs= corporate profits=fewer highpaying lowskilled jobs. Fewer highpaying lowskilled jobs = increased social costs. The middle class does not receive the profits the corporations yeild and they have to pay the taxes on the social cost.




RE: Hard to sell cars without dealers
By lelias2k on 5/14/2013 2:59:07 PM , Rating: 5
I'm sorry, but your vision is the reason why America is falling behind.

America used to have "the best of the best", but today it is fighting just to keep up. Why? Because of the mentality that "we can't do that because we will lose jobs!"

Guess what: jobs will disappear regardless of what corporations do. It's called evolution. Technology has been and will continue to kill thousands of jobs every year.

We need a shift in paradigm. We need to get our of the Industrial Revolution mentality and finally move on into the 21st century.

The government has been begging for years for kids to join STEM class, offering incentives and so on, but apparently Americans are more interested in becoming the next American Idol or whatever reality show is "hot" right now.

quote:
People with low skills/education could find jobs that paid living wages and enabled them to have pride and that pride promoted their desire to see their children do better.


Well, people now can access the information to educate themselves for free or close to it. It is called the internet. If you don't have a computer, your public library does. All you need is the drive to make yourself a better, more prepared individual, and you will find a job.

I suggest you watch this video: http://youtu.be/zDZFcDGpL4U

It might illustrate better what I'm talking about.


RE: Hard to sell cars without dealers
By lelias2k on 5/14/2013 3:07:06 PM , Rating: 2
Now, back to Tesla:

quote:

Tesla's ability to sell units will be limited if it can not have units and maintenance facilities in places where people want to buy them.


Then they are the ones who should be worried, not the government, wouldn't you agree?


RE: Hard to sell cars without dealers
By omgwtf8888 on 5/14/2013 4:06:24 PM , Rating: 2
It appears from a post 2 down, that Tesla has already moved to a quasi-dealer format. But, the servicing is the part that will need to be addressed. If you are asking should the government intervene in having or not having dealerships I would say NO!. I personally believe that North Carolina's proposed law is a restraint of trade and should run afoul of the commerce clause of the Constitution.

Most likely what N.C. wants is a single dealer located in their State so the can get their sales tax. Much easier then having to track down all of the Tesla purchasers and get your money.


By lelias2k on 5/15/2013 5:31:21 PM , Rating: 2
Well, keep in mind that this is NC. Home of Nascar. And the biggest dealership owners in the US. ;)


By somedude1234 on 5/15/2013 5:53:45 PM , Rating: 2
quote:
Most likely what N.C. wants is a single dealer located in their State so the can get their sales tax. Much easier then having to track down all of the Tesla purchasers and get your money.


This is easy enough to enforce when you register the vehicle to obtain your state-issued license plates and registration sticker (or whatever your local state uses). You settle up on the taxes as part of the registration process. This is how it works in most places for used vehicle purchases.

Also, how hard would it be for NC to tell Tesla: sure, direct sales, no problem, just make sure you collect our sales tax for us and forward it along. That's one entity to deal with instead of N dealers.


RE: Hard to sell cars without dealers
By omgwtf8888 on 5/14/2013 3:26:50 PM , Rating: 2
Yes in your world everyone gets a college degree and gets a high tech job. The reality is that a large portion of the population will never be able to achieve that. New Jersey has invested virtually of its State education budget on the low income school districts. It doesn't work! Yes technology is removing jobs but that leaves you 2 choices: Either you support this population with welfare or you create living wage jobs that are menial by nature. Yes technology will take all of the Taxi cab/Limousine/trucking jobs in the very near futures. What do you plan to do with these people? If your solution is to educate them guess what... been there done that! I am leaving New Jersey because when the State moved all of the State monies to low income school districts (abbott districts) it put the full burden on the local districts. Hence N.J. Highest property taxes in the country. I am gathering that by your "evolution" statement that you believe that the strong will survive and the weak (in this case) lower skilled/educated should perish? Because in reality, these people exist and either you find employment for them or you pay the taxes to support them. People with pride seek to improve their children and those subsequent generations can better adapt/or evolve as you suggest. Unemployed, depressed people have higher addiction/crime rates and usually do not become to invested in their child's education.

Why America is falling behind is a complex twist of globalization and greed. I believe what you are saying is possible generationally. But to get there we need to deal with the present day population.


RE: Hard to sell cars without dealers
By half_duplex on 5/14/2013 4:19:47 PM , Rating: 1
Perish isn't the exact word I'd use for it, maybe something a little more surgical or precise. Eliminated maybe.

Perhaps thinning the herd is the best analogy.

These people will not be fed into wood chipper or gassed, etc. If they don't have the pride you speak of, too bad so sad, I could care less. I'm worried about myself and my offspring. This is the natural way of think that will keep our national healthy. I refuse to acknowledge the existence of this unwritten rule that all people must be supported at some minimal level. Maybe you call that anarchy, but I see the starving deaths limited to one generation at most.

Thinning the herd. Cutting grapes from the shoot. Etc


RE: Hard to sell cars without dealers
By boobo on 5/14/2013 11:39:50 PM , Rating: 2
You're aware that, if they're going to see themselves and their families starve to death, they'd rather... "eliminate" you and take your food, right? And there will be 1000 of you defending against 1000000 of them.


RE: Hard to sell cars without dealers
By Mint on 5/14/2013 4:38:08 PM , Rating: 3
It's not clear that forcing menial jobs to stick around for the sake of lowering unemployment costs is the way to go. It's anti-progress, and lower total man-hours of labor is supposed to be a good thing. As a society, we just started to suck at dealing with it.

I think we should have companies help figure out what is the optimum balance: raise raw corporate tax rates to maybe 50%, but give them $3/hr in tax credits for all employees (up to a yearly hour limit, of course). Basically, they get marginally rewarded for taking the burden of an unemployed adult off of society's hands, making net tax rates will be similar, with high-employment businesses paying less and low employment ones paying more.

With regards to education, lelias2k's Darwinian view would be wrong even if everyone left was well educated. Kill off the poor and we lose aggregate demand, resulting in layoffs. Now you're back to square one.


By lelias2k on 5/15/2013 5:27:55 PM , Rating: 3
The long term reality is that we have to evolve from the hierarchical society that we are now. We must find a way to equalize things better.

There are countless possibilities of how this can be made, but it will have to be a huge paradigm shift. Something that most people can't possibly comprehend right now. Hence their necessity to keep trying to treat the symptom instead of going for the cause.

My post was just a simple remark about how I am tired of people complaining about how things are not the same. Of course they are not! And 30 years ago they weren't the same as 30 year before that either!

Will it be simple to change? Hell no. But people need to start trying to look at themselves for the problem before coming out and blaming other factors.


RE: Hard to sell cars without dealers
By kilkennycat on 5/14/2013 3:00:55 PM , Rating: 2
Fyi: Our local shopping mall (near Portland, OR) has a Tesla showroom, not very far from the Apple store in the same mall. Go figure the future....

See the 2012 article here:-

http://www.autotrader.com/research/article/car-new...


By kmmatney on 5/15/2013 2:53:32 AM , Rating: 2
We have both a tesla showroom, and a Tesla service center in Denver.

http://www.teslamotors.com/service/denver

There a pretty big market for Tesla in the Denver and Boulder area, I've seen quite a few of them driving around. If I didn't have 3 kids soon going to College, I'd buy one myself...


By tanjali on 5/14/2013 3:14:04 PM , Rating: 3
Cartels employ a lot of people too. We dont want them losing their jobs, dont we?


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