Source: WSJ

Category: Really, really bad calls, Video, Web/Tech

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7 Responses to “Tesla Versus Local Car Dealers”

  1. Bill Wilson says:

    I’m rooting for Tesla on this one. If the dealers lose this fight, they will only have themselves to blame. Too often, buying a new car is a miserable experience.

  2. cjb says:

    I’m really unknowledgeable on this, but wouldn’t Congresses authority to regulate interstate trade circumvent any state passing laws inhibiting Tesla from using the business model they have chosen?

  3. willid3 says:

    not sure how to address this. there are federal laws about this and state laws all were set up to protect the dealer because it was a case of the big company vs the small one. among the examples of this are the require for the mulroney sticker (that the sticker you see on the side of the car). that didnt exist until it was required by by the Feds. now we can see that neither really have that much interest in protecting the consumer, its just not in the best interest. but consider this Tesla isn’t advocating having company stores to reduce the price of the car (that stays at sticker) they seem to want to make sure the buying experience is the same any where. but company stores will not compete on price or service. they have no incentive to do so. dealers do as there usually is more than one of them selling a particular car. but not all of them do a very good job of providing a good experience or service to their customers either. and that may be the same as the seeming standard where a small percentage of dealers/consumers/manufacturers/doctors/etc cause the most havoc for all of the rest. we just can never root all those who do that

  4. Moopheus says:

    That’s conceivable, but it would mean Tesla would have to sue the state in Federal court, or lobby congress to deal with it legislatively. Tesla probably can’t afford to buy enough friends in Congress, not when their competitors still have more sway there.

  5. Concerned Neighbour says:

    Why should selling automobiles direct be illegal? What makes a car different from a toaster in this regard? It’s a serious question. I would like to know why the car dealership lobby believes this kind of transaction should be illegal.

    I must say personally I despise the current car purchasing process, where dealers set their margins artificially high to allow room for customers to haggle.

  6. Iamthe50percent says:

    I hate the Oriental Bazaar dealer system. Even if you think you got a good deal, there is the nagging doubt whether you were cheated or not. Why does one have to spend hours negotiating? I don’t go into Fry’s and start arguing for a lower price on a TV. I don’t go into Red Lobster and ask for a discount and start dickering. I don’t spend a few hours arguing with my insurance agent about the policy price. You check prices and buy accordingly. When there is a sale, everyone gets it, not just those with the stamina to argue all night and engage in histrionics.

    Dealer ads border on fraud with bait and switch advertised deals that are only available on non-existent cars or special classes of people (veterans, recent grads) that are never spelled out in the ads.

  7. Frwip says:

    Hopefully, the dealership model is living its last decade. It’s utterly indefensible on any merit, fairness, honesty, service delivered, etc., and all of it rolled in one with the worst, oiliest, sleaziest buying experience of any kind anyone can be subjected to.

    But it’s also a logistical nightmare and a complete anachronism for car manufacturers.

    The dealership model relies on large inventories of cars in dealers’ lots, useless inventories that someone ends up paying for, the customer though mark-ups and never actually getting the car they really want, the manufacturers through end-year discounted sales, take-backs from dealers, poor customer experience, loss of options sales, etc. It doesn’t make any sense for the manufacturers except as short term accounting tricks (to book sales early, as soon the cars are on the trucks for shipping to the dealers).

    Both car companies and their customers would be much better off with a built-to-order model, especially local manufacturers – GM, Ford, Toyota – who would be able to provide fast delivery. It should take less than a week from getting the order on the computer at the factory to delivering at the customer’s doorstep or the local service center. There would be zero finished inventory to carry. Customers would get exactly the car they want. No haggling, very low marketing costs. And, beyond happy customers, manufacturers would probably make a lot of money on options and customizations that they currently cannot offer.