Kill the laws that unfairly protects X business.
Kill the laws that keep car dealers in business
181–190 of 325 posts
Re: Kill the laws that keep car dealers in business
#182Yep, 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…
In France there is almost no "inventory" of new cars in car dealership. You try the model they have, but then you can configure it exactly how you want and it gets custom built for you before being shipped to the dealership. Why can't you do that in US?
You can; custom ordering is always an option. Most people don't like to wait, or fear they lose price leverage. Which is to say there's often a chance to save by taking a car off the lot at the end of the month.
Re: Kill the laws that keep car dealers in business
#183Earlier quoted context omitted.
Agreed. And I didn't mean to sound grim. Markets tend to be efficient in the long-term and inefficient in the short-term as it is still determining how to place capital and whatnot based on new information. I feel like our industry (software, and technology generally) understands that well, even if implicitly. It's just that those "inefficiencies" are often real people and the "short-term" means being unemployed or u…
"short-term" means being unemployed or unemployable for a while. If you add the caveat that "for a while" might in practice equal "several generations" for comparable employment, this is true. See for ex. industrial revolution. The hard truth is that to the degree that these things do work as a simplistic free market model might predict (and that is clearly arguable) they may operate on time scales that will do nothi…
Very true and very scary. The sad thing is that regulatory protection often makes matters worse by insulating people from changing realities. That causes the inevitable collapse of that protection to create an even greater shock to those who had been protected.
Re: Kill the laws that keep car dealers in business
#184In the Netherlands, you go to the dealer and order a car. The car gets built to order, unless it's in inventory at a nearby dealer. The way it works in the US sounds needlessly complicated to me.
Here in the US, we just bought a car and because they didn't have the model on lot anywhere, we just ordered through Toyota the exact model we wanted with all the features we wanted in preferred colors/finish. The dealership still got a cut but they helped us select the car are made the process very easy.
Re: Kill the laws that keep car dealers in business
#185Earlier quoted context omitted.
Car dealers are among the biggest "small business owner" donors to political campaigns in the US. The National Auto Dealers Association is a big part of most dealers' lives, and they know who is buttering their bread. I mention this b/c I don't think it's a gradual accident... The dealers forced Ford to shut down factory stores in Oklahoma not too long ago. This is a turf battle.
> Car dealers are among the biggest "small business owner" donors to political campaigns in the US. The National Auto Dealers Association is a big part of most dealers' lives, and they know who is buttering their bread. Which makes me wonder how much it would change the US political landscape to eliminate the massive protections granted to car dealerships.
> eliminate the massive protections
It would certainly change things a lot, but it would have to happen through the same democratic process that put the protections there in the first place.
Re: Kill the laws that keep car dealers in business
#186Earlier quoted context omitted.
Shouldn't you have a free market economy? Where a customer is able to choose between a dealer or a direct sale company? The customer is the one that should be able to choose between a cheaper price with a lower service, or a higher price with more service. The problem here is that companies want to provide the cheap alternative but aren't allowed to do so. If a dealer cannot compete with a direct sale company on pric…
I agree in theory, but the reality is that these companies made large investments under one set of legislation. If a society flips and completely changes the economic/legislative landscape under which companies operate, it creates a very unstable business environment and discourages capex especially. This would not be good for the long term economic health.
Laws can and are written with long-term timelines in mind. If you're dismantling X, Y and Z, you could specify that X kicks in two years from now, Y starts five years from now, and Z won't kick in until seven years has passed.
Re: Kill the laws that keep car dealers in business
#187Earlier quoted context omitted.
True, but there are some low hanging fruit that have not been attempted yet... in the following areas: Finance: - why can't I rent a car for a month and if I like it sign up for a year or two or three? If I want to own it, why can't I just convert to a purchase? These options are not fluid and interchangeable which necessitates much more of a "sale" rather than a more flexible, value oriented approach. A manufacturer…
> - why can't I rent a car for a month and if I like it sign up for a year or two or three? Because of the massive depreciation on a new car the minute you drive it off the lot. > - trim levels are out of control and make inventory planning much worse. If the base model sells for $18K but is available in a $36K trim level, is it really the same car? Why not just keep it simple. There are a lot of trim levels in cars…
> Because of the massive depreciation on a new car the minute you drive it off the lot.
Does the car depreciate? Or is it that it can no longer be sold as "new", making many of the incentives irrelevant. If the "new" car gets 0% financing, and the "used" car with one mile on it gets market rate, then of course there can be a higher sticker price on the new one.
Re: Kill the laws that keep car dealers in business
#188A long time ago I saw an ad on the back of a magazine, paying tribute to Dell's direct model. It was a Johnnie Walker ad, with a bar napkin. On the napkin was written Dell's business plan; it had "make computer, sell computer" basically crossed out, replaced with "sell computer, make computer." Make the car -> sell the car Sell the car -> make the car This switch should have happened a long time ago. The near total e…
That elimination of the inventory system works great for cars produced locally. What of those produced overseas, or even on the opposite side of the US? Consumers can handle waiting a week for a car they ordered, but you can't just throw a car into the UPS cargo hold and deliver it to the buyer's doorstep a day or two later.
You gotta love the eagerness the HN world has to label these old companies as idiots.. Never mind that 'kanban' came from the auto-industry. I say that tongue in cheek, there probably are some changes that could make the industry a lot better, we need dreamers to try.
The actual integration part isn't the problem, I don't believe. The dealers themselves could probably do that with a little help and some changes if you could deliver them a crate of all the parts. When you buy a Honda accord, there are at least 3 different power train options, a 4-cylinder manual (do they still make this?,) a 4-cylinder CVT, and a 6-cylinder automatic; and Honda has been amazing at actually reducing the number of options over the years. Do you build the power train on demand or do you attempt to forecast sales and stock an inventory? That's a very significant part of the overall cost. Many of those parts are forged and then machined both, just building the head takes some time and precision, let alone assembling it... there are interior changes that have to integrated as well, from the dash display to things like paddles for shifting in some formats.
With a lot of modern cars, I wouldn't be surprised if the rolling chassis for the different models is very nearly the same but subtly different depending upon the power train. Toyota has the highlander, it's a very popular platform, it also comes in a hybrid configuration, I suspect that are more than just some subtle changes to a lot more parts for that. Same with like an all-wheel drive as an option type products... or convertible roof. I think the navi-option on some mass market cars results in a different dashboard molding.
If you limit "options" to color and seat materials, this is an easy problem. The auto industry practically invented options though, like Ford and Lincoln and Mercury were the same vehicles for a long time, the fake options helped sell way more product. Today when you buy a Camry, it's almost like there are four or five entirely different products that are all labeled "Camry" from like an entry level spartan 4-cylinder edition up to the hybrid limited that costs nearly twice as much. The market seems to like that. That's the trick, if you could some how convince the buyer that they had real options but they didn't... Maybe electric motors are a big part of that, take performance off the table as an option and things can be made more simple.
Re: Kill the laws that keep car dealers in business
#189This is the reason I like TrueCar. It's not a total solution, but it definitely starts down the road of leveling the playing field.
I used www.roadster.com to buy a new car online for my father in law. It gives you a great price up front, and its experts do all the work of negotiating, handle your trade-in, and deliver the car to you, so you don't have to step into a dealership at all. Roadster's available in California so far. Check out their reviews http://yelp.com/biz/roadster-san-francisco
Re: Kill the laws that keep car dealers in business
#190There are some interesting comments in here about how tough the struggle is for car dealerships, but I don't think that necessarily justifies their existence or mitigates the point of this article. If what the dealerships do is valuable enough to the customer, they would exist even without the ban on direct sales. But I think we can all intuit that if the ban were lifted, buying a car would be a very different (and b…
We often moan about the taxi industry, the hotel industry, or the dealer associations but, in doing so, we miss something very important. The players in that industry often existed for years or decades in a state of government-backed protection without realizing it . Taxi drivers didn't necessarily lobby for market restrictions; they took advantage of the oligopoly, sure, but not necessarily consciously. If you live…
>. Taxi drivers didn't necessarily lobby for market restrictions
Drivers are out in the street protesting anything that allows ride sharing and demanding further restrictions. The idea that employees are innocents is riduculous. This ignores 100+ years of unions, associations, legislation, etc. Its the rank and file demanding these laws, not shadowy men cutting backroom deals. If these deals get made its because the rank and file have a enough political capital to make them happen.
>Essentially, the incumbents have been lied to for years
This seems to be politically biased. These people know exactly what they're doing. When the Chicago Teacher's Union marches and claims low pay (instead they are some of the highest paid teachers in the nation), they know exactly what they are doing. When cab drivers block streets to protest Uber, they know exactly what they are doing.