It is basically the same type of law that kept studios from owning movie theaters. Separating producers from local sales was a big thing. We can say it is a crap law but there were some very real worries and reasons that lead to it in many industries. Expect if the law is overturned that all the manufactures will replace local dealers with their own showrooms. This isn't about stopping innovation, it's about accumulated history.
Car Dealers Sue Tesla, Citing State Franchise Laws
21–30 of 111 posts
Re: Car Dealers Sue Tesla, Citing State Franchise Laws
#22Every now and then we see old laws being used by dying industries take a plunge at stopping innovation. Uber & Air B'n'B are two others that come to mind. The bigger problem for the dying industries is that they're taking on companies that at their core solve problems and disrupt. As opposed to being pathetic and continuing to prolonge the inevitable, they should focus their efforts on product development/sales chann…
Its easy to say that at the macro scale, but what are you suggesting car dealerships do on the micro scale? Learn how to build their own cars and sell them in defiance of the current laws on the contingency that the judge rules in Tesla's favor?
No, go out of business and look for a real job.
Re: Car Dealers Sue Tesla, Citing State Franchise Laws
#23What a dumb law. I wish I had a dollar for everytime the government tried to stop progress to protect big, archaic businesses (über, sidecar, lyft, Airbnb, you're with me on this one). Anyone smell corruption brewing? Think about it. How can a government own a car company then legislate against other car companies? I know it's federal gov buying and local gov ruling in this example, but it's a slippery slope nonethel…
By big, archaic businesses you are talking about local car dealerships, right?
Re: Car Dealers Sue Tesla, Citing State Franchise Laws
#24How can such a law be anything but bad for an economy?
The rationale I've heard is that consumers benefit from having a local service location for the brand. Based on that logic, the state limits the franchises to avoid "ruinous competition" (not my phrase) that would threaten that consumer benefit.
The first time I heard the phrase "ruinous competition" used this way, I nearly jumped out of my chair.
But this is why the OP mentions the challenge that Tesla will have in providing local repair service. If it can crack that problem, it may open the door to manufacturer shops of other car models as well.
Re: Car Dealers Sue Tesla, Citing State Franchise Laws
#25"Tesla is choosing to ignore the law and then is choosing to play outside that system."
Is there a statement more indicative of the fear of innovation in archaic industries?
Let's hope that laws like this begin to vanish and clear the way for innovation.
If they don't, I'm sure Mr. Musk will find a workaround. They could essentially setup their retailing operation as a separate legal entity and work around this.
And that's what big auto needs to understand - legal ploys to stop progress will only be met with more legal maneuvers. How about cessation of belly aching and movement toward a change in the product and retail model?
Re: Car Dealers Sue Tesla, Citing State Franchise Laws
#26Did the horse-and-buggy dealers sue the automobile industry when it was starting to threaten them, too?
Re: Car Dealers Sue Tesla, Citing State Franchise Laws
#27I love it. Tackling both the electric car and dealership problem at the same time. This is what disruption looks like.
Re: Car Dealers Sue Tesla, Citing State Franchise Laws
#28Every now and then we see old laws being used by dying industries take a plunge at stopping innovation. Uber & Air B'n'B are two others that come to mind. The bigger problem for the dying industries is that they're taking on companies that at their core solve problems and disrupt. As opposed to being pathetic and continuing to prolonge the inevitable, they should focus their efforts on product development/sales chann…
Its easy to say that at the macro scale, but what are you suggesting car dealerships do on the micro scale? Learn how to build their own cars and sell them in defiance of the current laws on the contingency that the judge rules in Tesla's favor?
They have place in the same way that record labels do.
Re: Car Dealers Sue Tesla, Citing State Franchise Laws
#29Did the horse-and-buggy dealers sue the automobile industry when it was starting to threaten them, too?
Don't know but I'd bet dinner and beers for "Yes, as hard and often as they could"
Re: Car Dealers Sue Tesla, Citing State Franchise Laws
#30It is basically the same type of law that kept studios from owning movie theaters. Separating producers from local sales was a big thing. We can say it is a crap law but there were some very real worries and reasons that lead to it in many industries. Expect if the law is overturned that all the manufactures will replace local dealers with their own showrooms. This isn't about stopping innovation, it's about accumula…
Maybe I'm too naive to see why manufactures having their own showrooms would be such a problem?