Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Kill the laws that keep car dealers in business

vox.com

Post reply on HN
Print view View original

51–60 of 325 posts

Re: Kill the laws that keep car dealers in business

#51

Post by khgvljhkb »

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.

Europe seems like an interesting country indeed. In many countries on the continent we call Europe, it works differently. I'm in a european country, and next-door to my office is a Porsche dealership where new cars roll out daily, filled with young men satisfied they used their whole bonus.

Re: Kill the laws that keep car dealers in business

#52

Post by jeromeflipo »

jasonkester wrote: post #48
jpatokal wrote: post #35

Earlier quoted context omitted.

> 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…

> 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.

Not in a world dominated by fossil fuels. This is worth a read: http://www.teslamotors.com/blog/tesla-approach-distributing-....

Re: Kill the laws that keep car dealers in business

#53

Post by A_Beer_Clinked »

venning wrote: post #37

I paused my software development career to sell cars for a year. I sold cars at two different Honda dealerships, both owned by Fortune 500 companies in, what I believe is, the densest single market for Hondas in the US (Metro DC). There's a couple things missing from the situation as described by the author. First, dealerships don't really make that much of a profit on new car sales. At least not Honda dealers. Used…

I've done a lot of data work for several other brands in a few markets and can confirm the used car part of this is true.

A properly run organisation can sell and re-sell the same car several times, also selling parts and services to each owner in between sales.

Rental and other fleets are particularly battled after for this reason as they can "inject" far more life time value in the the network than just the initial sale.

Re: Kill the laws that keep car dealers in business

#54

Post by amelius »

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…

> This seems like an opportunity for an Uber/AirBnB move (...) Find a jurisdiction anywhere in the USA where direct manufacturer sales are legal.

Like Uber/AirBnB care for what is legal or not... In fact, I would say that the prototypical "Uber/AirBnB move" is characterized by a businessmodel that is just over the edge of what is legal.

Re: Kill the laws that keep car dealers in business

#55

Post by SideburnsOfDoom »

jpfr wrote: post #38
nomercy400 wrote: post #32

Earlier quoted context omitted.

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

Assembly lines require a huge investment and cannot scale beyond their maximum capacity. So when a car turns out to be popular, the OEM (the brand that does final assembly) or one of the many suppliers might run into a huge backlog. That is most pronounced when orders spike after the introduction of a new model.

This has nothing to do with the colour and seats though. When "your" car finally rolls of the line to should take ... what? 1 working day to spray it the colour that you want and let the paint dry, an hour to bolt in your choice of seats and Cd/Mp3 player.

Re: Kill the laws that keep car dealers in business

#56

Post by alkonaut »

venning wrote: post #37

I paused my software development career to sell cars for a year. I sold cars at two different Honda dealerships, both owned by Fortune 500 companies in, what I believe is, the densest single market for Hondas in the US (Metro DC). There's a couple things missing from the situation as described by the author. First, dealerships don't really make that much of a profit on new car sales. At least not Honda dealers. Used…

> In order to sell a car, you have to have a car on your lot.

I don't understand the above: you mean people buy new (unused) cars from dealers, "off the shelf"? Aren't most new cars custom? Are US customers more impatient, so that in order to close a sale you need to have the various options pre-built, so that people don't have to wait four months for their new car to be built?

I have rarely seen a new car sitting at a dealer here (Europe), most dealers have one, maybe two, of the latest model, to be used by testing for potential customers.

Re: Kill the laws that keep car dealers in business

#57

Post by coldtea »

bluecalm wrote: post #43
BinaryIdiot wrote: post #4

Earlier quoted context omitted.

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.

A lot of things people say they would pay for, when speaking to the press or market research etc, in practice they never do -- and obviously not in large numbers.

I've read several stories of founders for example hearing people say "I'd buy that" etc, but in practice they found out nobody would bother with their product/service, it solved a non-painful enough problem, etc.

Paying for checking out cars to buy seems like one of these things.

Re: Kill the laws that keep car dealers in business

#58

Post by OliverJones »

Steve Rattner's book about the auto industry bankruptcies and restructuring in 2009 (http://www.worldcat.org/title/overhaul-an-insiders-account-o...) makes one thing clear: a major win for the US manufacturers from their bankruptcies was getting out from under the onerous terms of some long-term contracts with dealers. Also, the last holdouts to getting the deal done were certain politically connected dealers.

Re: Kill the laws that keep car dealers in business

#59

Post by coldtea »

TeMPOraL wrote: post #13
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…

Yeah. People think that because it works with Tesla, it will work with everyone, but they miss the point that Tesla is a pretty unique company - both because they're new to the market, and because under Elon's leadership, they have making the best possible car and electrification of world transport as a terminal goal , not as instrumental to simply getting more money. Other companies won't play nicely like this, beca…

>and because under Elon's leadership, they have making the best possible car and electrification of world transport as a terminal goal, not as instrumental to simply getting more money

Sounds like what any company leader would say, and/or Kool Aid assisted fan.

If long term profits weren't in aim, they'd could not care less about that "terminal goal".

And conversely, I wouldn't say other car companies don't have a vision and don't want to make the "best possible car" (BMW, Mercedes, ... Ferrari, etc), just have other constraints to what's best for their buyers.

Re: Kill the laws that keep car dealers in business

#60

Post by venning »

alkonaut wrote: post #56
venning wrote: post #37

I paused my software development career to sell cars for a year. I sold cars at two different Honda dealerships, both owned by Fortune 500 companies in, what I believe is, the densest single market for Hondas in the US (Metro DC). There's a couple things missing from the situation as described by the author. First, dealerships don't really make that much of a profit on new car sales. At least not Honda dealers. Used…

> In order to sell a car, you have to have a car on your lot. I don't understand the above: you mean people buy new (unused) cars from dealers, "off the shelf"? Aren't most new cars custom? Are US customers more impatient, so that in order to close a sale you need to have the various options pre-built, so that people don't have to wait four months for their new car to be built? I have rarely seen a new car sitting at…

Correct. I discovered in selling cars that car buying was an incredibly emotional, often impulsive, decision for most people. Yes, some are able to handle the experience dispassionately, but most people are "on the edge" of being a "buyer" (as opposed to being a "shopper").

It is the job of the salesperson to "get them there", to nudge the customer towards making a decision to buy a car today.

More wisdom from a great manager: "Sales is the process of transferring emotion from the salesperson to the customer." If you're morose and apathetic, you can turn a buyer into a shopper. But if you are engaged and energetic, you can take even the most guarded shopper and make a sale out of it.

I saw this every time I watched Steve Jobs give a keynote.

Post reply on HN