I don't understand why Elon can't register another corp to be an exclusive dealer for Tesla?
Or not an exclusive, but add an outrageous fee to become a member of "Tesla Dealer" club.
NY auto dealers trying to shut down Tesla Motors in NY
101–110 of 138 posts
Re: NY auto dealers trying to shut down Tesla Motors in NY
#102Earlier quoted context omitted.
McDonalds doesn't need any arrangement like that because nobody's interested in mail-ordering cheeseburgers from them, and if HQ wanted to put them in supermarkets and sell direct-to-consumer, it wouldn't affect the franchises anyway -- frozen burgers are not a substitute good for drive-thru fast-food meals. Cars are different. If the manufacturers sell direct-to-consumer, then they can always undercut dealerships (n…
> McDonalds doesn't need any arrangement like that because nobody's interested in mail-ordering cheeseburgers from them Mail-order isn't the issue. McDonalds can own their own restaurants right now if they want to, instead of franchising. This is similar to how Tesla wants to operate. > If the manufacturers sell direct-to-consumer, then they can always undercut dealerships...there will be no profit in buying new vehi…
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Re: NY auto dealers trying to shut down Tesla Motors in NY
#103Earlier quoted context omitted.
Why can't this all be enforced using contract law? I don't see McDonalds having burger dealerships codified into law, but rather franchise contracts that let them sell billions of pounds of beef, chicken, and potatoes through their "dealers."
McDonald's do exploit and undermine local laws and use their bottomless pockets to grind down opposition. This isn't the same as what you are talking about I know, but its on the spectrum. http://m.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=...
I didn't see anything in that article talking about exploiting or undermining local laws. In fact the whole article talked about outrage at local politicians.
Not to say they don't, but the admirable qualities about the McDonald's corporation is that they are hyper-rational about business efficiency and public image. I don't see anything in the article illustrating that they were acting in a dirty manner.
Re: NY auto dealers trying to shut down Tesla Motors in NY
#104Earlier quoted context omitted.
> McDonalds doesn't need any arrangement like that because nobody's interested in mail-ordering cheeseburgers from them Mail-order isn't the issue. McDonalds can own their own restaurants right now if they want to, instead of franchising. This is similar to how Tesla wants to operate. > If the manufacturers sell direct-to-consumer, then they can always undercut dealerships...there will be no profit in buying new vehi…
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> I answered your question of why the status quo cannot be enforced by contract instead of by industry-specific law; the status quo only exists because of those laws.
That wasn't my question. My question was why contracts cannot enforce this kind of behavior instead of heavy handed law, not if the parties would agree to those contracts. The fact that you think the parties would not willingly enter into this kind of contract makes it obvious to me that it is heavy-handed.
> If you prefer a country where everyone operates like Tesla -- your nearest service center is a state and a half away
That's a much more cynically view of dealerships than even i portrayed. Are you suggesting dealerships offer absolutely no value to customers and wouldn't have a sustainable business without the gov't protecting them? It almost sounds like you've come across a business idea in the event of a post-dealership-apocalypse world.
Re: NY auto dealers trying to shut down Tesla Motors in NY
#105Earlier quoted context omitted.
If instead of brushing it off you could explain what those reasons are, it could be more helpful. Thus my question. If you don't know them and assume they exist - I'm not convinced. There are bad laws which are pushed in by various lobbies (like DMCA). The fact that they can exist long is not a proof of the sanity of such laws.
This Planet Money podcast: http://www.npr.org/blogs/money/2013/02/12/171814201/episode-... and this paper (PDF) http://faculty.som.yale.edu/FionaScottMorton/documents/State... Should be a useful primer. It explains how the dealership/franchise structure came to be, and why automakers prefer this model today.
I listened to the podcast. So it boils down to the fact that in the past manufacturers had really rough relations with dealers, and the later passed tons of protection laws which gave them essentially a solid monopoly. And most of those reasons have no meaning today.
Though I didn't get the part that fighting that now is futile (there were not enough details in the story). If enough people will be against these laws - they'll be cancelled, no matter how much power these dealers wield.
Re: NY auto dealers trying to shut down Tesla Motors in NY
#106Earlier quoted context omitted.
Not now. But his arguments might tell you why the laws were created in the first place. Protection of consumers like you and me. I honestly I can't see a good reason for labor unions to exist anymore either, but they're still around and have plenty of politicians on their side.
Huh? The laws were created to stop manufacturers from turning around after using franchises to scale and selling directly at lower prices. As "lower prices" tells you, the customer was not considered in the equation.
Except that the prospective franchise owners, able to see the trap you've just described, wouldn't have opened any franchises without some sort of long-term guarantee, and customers would ultimately have lost out. I'm not endorsing this particular solution, mind you...
Re: NY auto dealers trying to shut down Tesla Motors in NY
#107Earlier quoted context omitted.
> McDonalds doesn't need any arrangement like that because nobody's interested in mail-ordering cheeseburgers from them Mail-order isn't the issue. McDonalds can own their own restaurants right now if they want to, instead of franchising. This is similar to how Tesla wants to operate. > If the manufacturers sell direct-to-consumer, then they can always undercut dealerships...there will be no profit in buying new vehi…
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Apart from a few cities, the nearest service center is a state and a half away. If you don't like the staff/service there, your next option is shipping your car two states away when it needs work. There are few enough car manufacturers that none of them will build out significantly more company-owned service centers than the others; you won't be able to "vote with your dollars" on better coverage now that an expansive dealer network can't be counted on for OEM service.
Dealers, right now, make a lot of money on service. Why the hell would manufacturers, in an alternative world where dealers are no longer protected by laws, skip out on that profit? There are also lots of independent auto workshops that never had anything to do with selling brand new cars.
Manufacturers can't count on bulk sales to dealers of each year's new models, so there's higher risk of a model not ramping up production fast enough to become profitable, and of the entire company going out of business in a recession.
Well yes, theres an inherent risk in running a business. Who knew.
Dealerships will be much smaller, no longer having to stock and earning a profit from new car sales; hundreds of thousands of jobs will gradually disappear. But new cars will get cheaper.
Jobs for the sake of "jobs" are not sane economic policy and will eventually be to the loss of everyone.
Comparison shopping gets much harder -- you won't be test-driving new and used cars of different makes on the same lot anymore. You probably won't be able to test-drive a new car and drive that car home the same day anymore either.
Why the hell not? Tesla offers testdrives, and you can even buy a car right now if they happen to have an orphaned one at a service center. They are still production constrained right now so thats obviously not how they can sell cars this very moment. Other manufacturers can offer this easily.
Re: NY auto dealers trying to shut down Tesla Motors in NY
#108"My dear colleagues, every day great quantities of wood come into Paris, and draw out of it large sums of money. If this goes on, we shall all be ruined in three years, and what will become of the poor people? [Bravo.] Let us prohibit foreign wood. I am not speaking for myself, for you could not make a tooth-pick out of all the wood I own. I am, therefore, perfectly disinterested. [Good, good.] But here is Pierre, wh…
May I add:
"To rob the public, it is necessary to deceive them. To deceive them, it is necessary to persuade them that they are robbed for their own advantage, and to induce them to accept in exchange for their property, imaginary services, and often worse. Hence spring Sophisms in all their varieties. Then, since Force is held in check, Sophistry is no longer only an evil; it is the genius of evil, and requires a check in its turn. This check must be the enlightenment of the public, which must be rendered more subtle than the subtle, as it is already stronger than the strong."
-- Bastiat, Sophisms of the Protectionists
Re: NY auto dealers trying to shut down Tesla Motors in NY
#109Because the government is completely ran by corporations and Musk isn't in "the club" (yet). Gone are the days where the consumer is uneducated and the supplier doesn't have a way to easily and effectively communicate with customers everywhere from anywhere. There's a pretty good doc on Netflix, "Park Avenue: Money, Power and the American Dream", which covers some of the financial backing of congress and how it affec…
Elon Musk reminds me of Preston Tucker. Lots of similarities between Tesla Motors and Tucker Corp. http://en.wikipedia.org/wiki/Preston_Tucker
I don't see any, offhand. Tucker was a dilettante next to Musk.
Re: NY auto dealers trying to shut down Tesla Motors in NY
#110Earlier quoted context omitted.
>The irony is that once (if) Tesla starts selling cars in significant volume their purely direct/internet/word of mouth model will break down and they'll probably find themselves....... establishing dealerships! How come? In my experience dealerships provide a horrible experience, where you're always thinking "how am I being ripped off here?". What value do they provide that is suddenly required once you reach scale?
Short answer: Think "the Apple Store" of car dealerships. Long answer: I don't think the mass market is in Tesla's future anymore. They're too late. There are too many competitive new entry level entrants from Honda, Nissan, Ford etc. I don't think Musk cares. He strikes me as a guy with a mission - to get us off fossil fuels - and he's doing that. I think his deal to supply the motor industry shows you where Tesla w…
> There are too many competitive new entry level entrants from Honda, Nissan, Ford etc.
I completely lost you there. Where are these competitive new entry level models?
e.g.: The Nissan Leaf absolutely does not compare with the Model S in range, speed, style, ecosystem, internals, etc, etc.
There really is no EV competition for Tesla. There is competition from non-EV luxury vehicles, but Tesla is beating most of them in price/performance and customer satisfaction.