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Car Dealers Sue Tesla, Citing State Franchise Laws

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Re: Car Dealers Sue Tesla, Citing State Franchise Laws

#41

Post by delinka »

jasonlotito wrote: post #23
nickesh_23 wrote: post #16

What 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?

That's how I read it. Not that you've insinuated otherwise, but if you take a look at the requirements for starting a dealership, they're typically not 'small' businesses.

Re: Car Dealers Sue Tesla, Citing State Franchise Laws

#42

Post by politician »

mrkmcknz wrote: post #30
protomyth wrote: post #21

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 accumula…

Maybe I'm too naive to see why manufactures having their own showrooms would be such a problem?

Why does having a Walmart raise such ire in small towns? These types of companies expatriate dollars from local economies. I think that's the reason for the original laws.

Re: Car Dealers Sue Tesla, Citing State Franchise Laws

#43

Post by tomjen3 »

beedogs wrote: post #26

Did the horse-and-buggy dealers sue the automobile industry when it was starting to threaten them, too?

Absolutely. Mackinac Island banned cars in 1898 (properly easier back then than now), with the official excuse that they would 'scare the horses' (http://www.hal.state.mi.us/mhc/autoshow/vehicles/mackauto.ht...)

They are still banned their today, but properly mostly because the town use it as a turist attraction.

Re: Car Dealers Sue Tesla, Citing State Franchise Laws

#44

Post by protomyth »

Herring wrote: post #31
protomyth wrote: post #21

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 accumula…

> Separating producers from local sales was a big thing. That sounds interesting. I'm curious why.

To expand rapidly (play catchup is the modern term), GM started franchising car sales. No real protections other than the agreements. Then anti-trust laws intruded and it looked like franchising would be illegal (think Standard Oil), but later court cases clarified the difference between the franchise owner and the suppling company. The we go to stopping companies from owning the whole horizontal chain in some industries like theaters and stopping national companies from abusing the local franchisors (like car dealerships).

It is basically the story of stopping evil monopolies combined with need for companies to expand reach quickly in a non-internet world (see Singer sewing machines and GM) dovetailing into more anti-trust laws and then local job protection schemes meshed with laws codifying the 100 year old business model (we are talking stuff that started before automobiles).

Apple doesn't have a problem because they came after. If you think this is screwed up, then don't buy a boat.

Re: Car Dealers Sue Tesla, Citing State Franchise Laws

#45

Post by dietrichepp »

djokkataja wrote: post #14

From the Massachusetts law: (c) It shall be deemed a violation of subsection (a) of section 3 for a manufacturer, distributor or franchisor representative: ... (10) to own or operate, either directly or indirectly through any subsidiary, parent company or firm, a motor vehicle dealership located in the commonwealth of the same line make as any of the vehicles manufactured, assembled or distributed by the manufacturer…

http://www.teslamotors.com/natick

> The Gallery does not sell cars, but serves as a place to educate visitors about our groundbreaking electric vehicles.

The website does not say this about Tesla's other locations.

Re: Car Dealers Sue Tesla, Citing State Franchise Laws

#46

Post by protomyth »

andrewtbham wrote: post #34
protomyth wrote: post #21

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 accumula…

The movie studio/theater breakup was an anti-trust case. http://en.wikipedia.org/wiki/United_States_v._Paramount_Pict... . btw, there is a bug the hn code... add a period at the end of the url to see the link

Yep, all of these laws have been affected by anti-trust since the Standard Oil case. It is very much a part of these laws being developed.

Re: Car Dealers Sue Tesla, Citing State Franchise Laws

#47

Post by schreiaj »

cloverich wrote: post #33
datalus wrote: post #6

Earlier quoted context omitted.

It certainly is, quote from the article: "Let's say consumers really liked buying from a factory store. That would put dealers in a tough spot because they've been saying for years that the franchise system is actually good for customers," [Jeremy Anwyl] says. I think he hit the nail on the head. I would say the franchise system is only good for the franchise owners, not the customers.

Has anyone ever had a good experience at a car dealership? I remember getting my first car when I was 16. I was so excited, I drove the thing home and didn't realize the car mats weren't in it. I called the next day: "Sorry sir, Car mats don't come with used Vehicles. We do sell them though ($350!!!)" The thought of car dealerships going out of business and being replaced by a better business model feels nearly too g…

Actually when I purchased my MINI I had a great experience. I walked into the show room and the salesman asked me if I wanted to drive a car (they only sold 1 car with 3 options for engine and suspension tuning at the time). I said yes, he took my license and copied it then handed me the keys. Told me to go down the road and where to turn to get to some relatively empty roads. Then said see you later. I took the car out, drove it and knew that day I was going to get the car it was just a matter of figuring out manual or automatic and which of the engine options.

Fast forward a few days I walked in and purchased the car. They have it ready the next day. Problem is they forgot the temporary plates and we didn't notice that. I drove it 40 miles home and then discovered the plates. The salesman drove the plates out to my home address on his way home from work.

Re: Car Dealers Sue Tesla, Citing State Franchise Laws

#48

Post by protomyth »

dietrichepp wrote: post #45
djokkataja wrote: post #14

From the Massachusetts law: (c) It shall be deemed a violation of subsection (a) of section 3 for a manufacturer, distributor or franchisor representative: ... (10) to own or operate, either directly or indirectly through any subsidiary, parent company or firm, a motor vehicle dealership located in the commonwealth of the same line make as any of the vehicles manufactured, assembled or distributed by the manufacturer…

http://www.teslamotors.com/natick > The Gallery does not sell cars, but serves as a place to educate visitors about our groundbreaking electric vehicles. The website does not say this about Tesla's other locations.

Can they order the car on premises (even if it is a computer with a web browser in the studio)?
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