I'm curious to know what other consumer products are sold through dealerships (In the continental US). Why would any law make it mandatory for a manufacturer to sell their items through a dealership. Just curious.
Car Dealers Sue Tesla, Citing State Franchise Laws
71–80 of 111 posts
Re: Car Dealers Sue Tesla, Citing State Franchise Laws
#72Earlier quoted context omitted.
"Separate legal entity" isn't quite enough. It also can't be owned by the manufacturer.
Would a parent corporation that owns both the manufacturer and a separate distributor work?
I think it would already have been done by auto makers if it was legal.
Re: Car Dealers Sue Tesla, Citing State Franchise Laws
#73That is ridiculous. A car is a product like any other product that can be sold. Apple sells phones and MacBooks directly to the public. Outlet malls have clothing manufacturers selling directly to the public. The car dealerships is an outdated model and this is a sign that they are desperate. They are just suing because once the Tesla stores prove to be more efficient other car manufacturers will follow suit.
I have to admit, as an outsider, I can't fathom how a law like this even exists especially in a place like America.
Re: Car Dealers Sue Tesla, Citing State Franchise Laws
#74How can such a law be anything but bad for an economy?
Well, it creates jobs ... that aren't needed or helpful to others (they're not educating children or providing healthcare services) and inflates costs (profit and money for salaries).
Yeah, in other words an example of the broken window fallacy.
Re: Car Dealers Sue Tesla, Citing State Franchise Laws
#75Every 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?
Maybe manufacturers need to change dealer pricing structure. If they're paying millions for licenses, training and equipment, it sounds like the manufacturer treats that like a profit center. Dealers need to accomplish specific goals, if they're a franchise or company store.
Re: Car Dealers Sue Tesla, Citing State Franchise Laws
#76Earlier quoted context omitted.
Maybe I'm too naive to see why manufactures having their own showrooms would be such a problem?
Imagine that Ford only allows maintenance at company owned stores, because they don't sell replacement parts to dealers, then they charge $500 for a fan belt, etc.
Wait, how is this different from any consumer device that has a warranty?
edit: e.g. let's say my apple laptop breaks, even if I could fix it or get it fixed by a third party for cheap, I have to take it to the apple store to not risk losing my warranty completely.
Re: Car Dealers Sue Tesla, Citing State Franchise Laws
#77Every 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?
I would like to see emerge a car-buying agent. The agent would deal with all manufacturers and used car lots (still a need for this) and help the buyer get exactly what they want at the best price.
However, there will always be some new car retailers because some people like to buy new cars in person and drive them immediately. I think the standards for sales staff will continue to change away from the old commissioned, "pal" model to the new non-commissioned, quant/car nerd model. It is a change that seems to be defining this generation of workers.
Re: Car Dealers Sue Tesla, Citing State Franchise Laws
#78How 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…
These laws came into existence to protect dealers from predatory actions taken by manufacturers against the public interest. They have their roots in the Great Depression era when Henry Ford dumped inventory on dealers with "offers they couldn't refuse."
There is a huge imbalance of power in this relationship. Since their creation the statutes have been captured by special interest just like every other regulation.
Re: Car Dealers Sue Tesla, Citing State Franchise Laws
#79I think it's a sure sign you're on to something when the incumbent businesses try to use outdated laws to stop you.
Re: Car Dealers Sue Tesla, Citing State Franchise Laws
#80Car sales has always struck me as an industry that was ripe for disruption. Why do we still need car salesmen?