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Kill the laws that keep car dealers in business

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Re: Kill the laws that keep car dealers in business

#41

Post by eru »

runholm wrote: post #22
suneilp wrote: post #3

"the price of the cars that are sold needs to be high enough to cover the costs of building and storing the unsold ones." We shouldn't be having this problem anymore. It's a massive detriment to the economies of scale model. Most people don't need to buy a car overnight, which ironically is because they are so expensive. Keeping a small amount of cars for test driving and personal inspection is all that is needed. Th…

Based on the fact that a large industry is not doing this I would guess there are some reason it's not a good idea economically. I don't see an obvious flaw in your suggestion, but it's so simple that someone in the industry have to have come up with it already and decided not to do it.

Might just be a regulatory reason, though. Not a technical one.

Re: Kill the laws that keep car dealers in business

#42

Post by eru »

bgribble wrote: post #7

Yep, buying a car sucks. But this is one of the largest supply-chain operations in the world. The dealer franchise system and its legal framework have evolved over 100 years and are balanced pretty delicately. It can't just be refactored by waving a regulatory wand at it and hoping for the best. Cars will still have to be warehoused, delivered, serviced, and resold. Somebody has to buy your old junky trade-in. Somebo…

> It can't just be refactored by waving a regulatory wand at it and hoping for the best.

No need for anything new, just find the sanest country, and copy their laws.

Re: Kill the laws that keep car dealers in business

#43

Post by bluecalm »

BinaryIdiot wrote: post #4
devit wrote: post #2

Maybe the dealerships and in general physical shops should evolve into paid-for showrooms? That is, you pay, say, $50, and you get to try a bunch of cars or in general products that they have on loan from various manufacturers and get some guidance from the staff if needed. Then once you figure out what you want, you buy it online and get it shipped to you. Then there is no need to "protect" those shops, since the cu…

If you're selling me something very big and expensive I better get a chance to look at it up close and try it out. If you're going to charge me for that experience then I will go somewhere else. What should happen is the car manufacturers buy out the best dealerships and simply sell the cars direct. It'll allow them to optimize their distribution and inventory channels and give them a bigger margin overall. It's goin…

I would prefer paying for trying. It's added to the price anyway, it would be more customer friendly to have the fees exposed and not bundled with the purchase itself.

Re: Kill the laws that keep car dealers in business

#44

Post by dagw »

eru wrote: post #42
bgribble wrote: post #7

Yep, buying a car sucks. But this is one of the largest supply-chain operations in the world. The dealer franchise system and its legal framework have evolved over 100 years and are balanced pretty delicately. It can't just be refactored by waving a regulatory wand at it and hoping for the best. Cars will still have to be warehoused, delivered, serviced, and resold. Somebody has to buy your old junky trade-in. Somebo…

> It can't just be refactored by waving a regulatory wand at it and hoping for the best. No need for anything new, just find the sanest country, and copy their laws.

Laws are a product of culture. Copying a countries laws, without also copying its culture won't give you the effects you are hoping for.

Re: Kill the laws that keep car dealers in business

#45

Post by alaskamiller »

This is why Apple will take over the car industry.

Integrate the best supply chain management, best logistics, best customization processes, best personalization processes, best servicing processes, best retail sales force, best legal compliance/adherence processes.

Then look at how to make a giant iPod on wheels then deploy.

Re: Kill the laws that keep car dealers in business

#46

Post by SideburnsOfDoom »

nomercy400 wrote: post #32
jpfr wrote: post #18

Earlier quoted context omitted.

In Europe, only used cars are sold directly off the parking lot or showroom of the dealer. Normally, you choose the options (color, engine options, leather seats, ..) and the car is built for you. You can pick it up some weeks/months later. Manufacturers of high-priced cars may invite you to pick up the car at the plant when it comes off the line. They have a special "experience" designed around that.

To be honest, should it really take months to produce and ship that one car through europe? Surely assembly lines are faster than that.

If you start with a few stock models, and then all you're picking is the colour of the paint and the style of the seats and a few other bolt-on parts; then no, it should not really take long.

Re: Kill the laws that keep car dealers in business

#47

Post by gambiting »

jpfr wrote: post #18
suneilp wrote: post #3

"the price of the cars that are sold needs to be high enough to cover the costs of building and storing the unsold ones." We shouldn't be having this problem anymore. It's a massive detriment to the economies of scale model. Most people don't need to buy a car overnight, which ironically is because they are so expensive. Keeping a small amount of cars for test driving and personal inspection is all that is needed. Th…

In Europe, only used cars are sold directly off the parking lot or showroom of the dealer. Normally, you choose the options (color, engine options, leather seats, ..) and the car is built for you. You can pick it up some weeks/months later. Manufacturers of high-priced cars may invite you to pick up the car at the plant when it comes off the line. They have a special "experience" designed around that.

In "Europe"....again you are trying to make it sound like everywhere is the same. I've bought many new cars in "Europe" and it was always off the lot. I'm really not interested in waiting 5-6 months for a new car. Especially since waiting time for some, like the new Range Rover is 12-18 months, which is just insane. If you don't have a car in stock, I'm walking out of the dealership.

Re: Kill the laws that keep car dealers in business

#48

Post by jasonkester »

jpatokal wrote: post #35
jasonkester wrote: post #24

This seems like an opportunity for an Uber/AirBnB move. Find a jurisdiction anywhere in the USA where direct manufacturer sales are legal. Negotiate with the manufacturers to handle direct-to-consumer sales for them. Write your "app" so that customers can build their car online and have the order go straight to the factory. Charge the customer a "delivery fee" to get their heavily discounted car to them, from which y…

> Negotiate with the manufacturers to handle direct-to-consumer sales for them. As in, found a startup and then negotiate with Ford, GM, Toyota, Volkswagen etc about a deal that's guaranteed to piss off the existing dealer networks that make ~100% of their revenue and will view this as an existential threat? Good luck with that! Above all, this seems to assume car companies are stupid. Ford, GM & co would sell their…

Thus the billions of dollars of VC and fighting mentioned above.

In the context of what you've written, though, can you explain why Tesla chooses to sell directly to consumers?

They have the ability to sell through dealers, just like the established automakers. And it would cost them a lot less money and hassle to do so.

Why then would they choose to sell direct if not that it actually made good business sense to do so.

Re: Kill the laws that keep car dealers in business

#49

Post by gambiting »

nomercy400 wrote: post #32
jpfr wrote: post #18

Earlier quoted context omitted.

In Europe, only used cars are sold directly off the parking lot or showroom of the dealer. Normally, you choose the options (color, engine options, leather seats, ..) and the car is built for you. You can pick it up some weeks/months later. Manufacturers of high-priced cars may invite you to pick up the car at the plant when it comes off the line. They have a special "experience" designed around that.

To be honest, should it really take months to produce and ship that one car through europe? Surely assembly lines are faster than that.

Nope, with some cars the next available spot in factory is months and months away. Try ordering a new Range Rover - standard wheel base model can now be ordered for the end of 2016, long wheel base you would get delivered around March 2017 if you ordered one now. Apparently that's because there's only one assembly line in their factory in Solihull, and there's thousands and thousands of orders from all over the world.

To be fair, waiting time for a new Qashqai(which is a very popular car) is still 3-4 months, because the factory is that busy.

Re: Kill the laws that keep car dealers in business

#50

Post by gambiting »

adventured wrote: post #27
gedrap wrote: post #17

Earlier quoted context omitted.

>>> The automaker never builds a car that hasn't already been sold. I am not familiar with the industry, how long does it take to make a car and deliver it to the customer (let's assume to a major US city)?

It takes Toyota 16 to 18 hours or so from start to finish on a car, with around 35 total man hours of labor put into each. I think a custom vehicle ordered from a sales outlet, could be completed within 2 to 3 days, and shipped out, available to the customer within 7 to 10 days. It would require pushing manufacturing forward in numerous ways, and retooling the entire process of making a car for this business model, b…

Except that the factories are already booked out several months in advance. Manufacture of a car takes less than a day, delivery can be done within a week, but that doesn't help if the nearest available slot in the factory is 4 months away.
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