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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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RE: lolwut?
By othercents on 5/15/2013 8:40:58 AM , Rating: 1
quote:
Uh-huh. Then why is the same not true of everything else you can buy from a manufacturer directly?

Do you actually buy anything direct from the manufacturer? We go to the grocery store which is a middle man. We go to Walmart or Target which is a middle man. We go to the gas station which is usually franchised and a middle man. We go to the motorcycle shop and they sell all brands and they are a middle man. We purchase phones from AT&T, T-Mobile, Verizon, etc and they are all middle man. We purchase clothing from Nordstrom and Macy's. We use middle man everyday and we choose which middle man to use based on service, pricing, and convenience. Even with the newer stores like Gap, J.Crew, Express, American Eagle, etc. there is still direct competition that are middle man and these stores are fairly new. In the past J.Crew sold from catalog and didn't own stores.

quote:
Think of all the other things you can buy directly from a manufacturer...including, as pointed out, a new house - probably the biggest purchase you'll ever make...and now try to rationalize that argument.

To compare cars to houses, do houses get built out of state and then shipped in to be sold? Are there any housing companies that sell houses in all 50 states? When you go looking for a house do you have competition and choice or it is all one type of house sold in different colors for the same price? Housing is different, however it is only one of the few items you can purchase direct from the manufacturer.

quote:
Doesn't work.

If it doesn't work, then why did Elon say he was willing to go with the franchise model once he started to produce more mainstream vehicles?

The better question is if the franchise system for cars is outdated? Would it be more convenient if you could buy a new car from one lot that had all brands? Or direct mail order from the manufacturer? It would be, however that doesn't mean the franchise system is bad.


RE: lolwut?
By Manch on 5/15/2013 11:24:48 AM , Rating: 3
I buy fruits and veggies from the farmers. They also deliver my milk and eggs. Now I didnt buy the milk and eggs directly from the chicken and cows, so I guess you could say the farmer is the "middle man".

My metal frame building was ordered straight from the manufacturer(out of state), shipped to my farm and then I had it errected. There's a living space inside of it too. You wouldnt notice the difference between my living room and one in a regular house except maybe the fals ceiling.

More and more houses are being prefabbed in sections and transported to the build sites.

I've bought several items online direct from the manufacturer. so yeah it's not unheard of or rare as you say.


RE: lolwut?
By lelias2k on 5/15/2013 5:09:38 PM , Rating: 3
So I guess Dell, HP, Apple, Nike, Adidas, etc, all quit selling their products on their websites, right???

Come on, the whole thing is a lobby. Please tell me when a lobby is watching over consumers' best interests.


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