Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Auto Dealers Whine That Tesla Stores Are Illegal

wired.com

Post reply on HN
Print view View original

51–60 of 154 posts

Re: Auto Dealers Whine That Tesla Stores Are Illegal

#51

Post by jmaygarden »

aleyan wrote: post #33
tomrod wrote: post #14

Earlier quoted context omitted.

> How is that helping anyone but the dealerships? It's not.

> > How is that helping anyone but the dealerships? > It's not. That was my initial though as well, but I came up with at least one case where survival of the dealerships is critical to an open market place. If all stores were owned by car manufacturers, that would be a significant barrier to entry of new automakers. Not only do new entrants have to build a car company, but now they have to create a new distribution…

Then shouldn't the law simply ban such pricing practices? That seems like a less oppressive solution. Banning an important industry from selling its own products just sounds wrong.

Re: Auto Dealers Whine That Tesla Stores Are Illegal

#52

Post by techdmn »

jetti wrote: post #28
jwr wrote: post #20

Today I found out that USA (arguably the most libertarian country on earth, as far as business is concerned) has strict laws governing the sale of vehicles, said laws actually preventing companies from selling vehicles. I find that quite amazing.

Not to mention that there are some states that just prohibit the sales of vehicles on Sunday. That is what I find amazing. I can't imagine being told that one day a week I'm not allowed to sell my product.

It does seem a little odd, but as a resident of one of those states I think it's awesome. I can peruse the lot with zero chance of being approached by a salesperson. IMHO it actually facilitates car sales, because one day a week people can look at new cars without immediately feeling like prey.

Re: Auto Dealers Whine That Tesla Stores Are Illegal

#53

Post by Khao »

jetti wrote: post #28
jwr wrote: post #20

Today I found out that USA (arguably the most libertarian country on earth, as far as business is concerned) has strict laws governing the sale of vehicles, said laws actually preventing companies from selling vehicles. I find that quite amazing.

Not to mention that there are some states that just prohibit the sales of vehicles on Sunday. That is what I find amazing. I can't imagine being told that one day a week I'm not allowed to sell my product.

In Québec auto dealers are only allowed to be open on weekdays. I can't see why our province (or maybe it's a Canadian law I'm not sure) needs to pass a law to prohibit car sales on the week-end.

Re: Auto Dealers Whine That Tesla Stores Are Illegal

#54

Post by ImprovedSilence »

artursapek wrote: post #25
jwr wrote: post #20

Today I found out that USA (arguably the most libertarian country on earth, as far as business is concerned) has strict laws governing the sale of vehicles, said laws actually preventing companies from selling vehicles. I find that quite amazing.

If there's any industry begging to be "disrupted," it's the automotive industry.

True, and Tesla has been the biggest disruptor. But barriers to entry are huge, and regulation really clamps down on "disruption".

You know all those awesome concept cars you see at car shows that never get built? One reason nothing revolutionary comes out is that the industry is regulated to the max. Much of it is "safety" features, which may be well and good, but much of those "safety" constraints are arbitrary. But there are laws about everything from the shape of the steering wheel, to how far apart headlights need to be, and the CAFE standards pushing for fuel economy limits how cars have to be designed and built, as the companies need to squeak out every last mpg on the car.

Re: Auto Dealers Whine That Tesla Stores Are Illegal

#55

Post by travisp »

aleyan wrote: post #33
tomrod wrote: post #14

Earlier quoted context omitted.

> How is that helping anyone but the dealerships? It's not.

> > How is that helping anyone but the dealerships? > It's not. That was my initial though as well, but I came up with at least one case where survival of the dealerships is critical to an open market place. If all stores were owned by car manufacturers, that would be a significant barrier to entry of new automakers. Not only do new entrants have to build a car company, but now they have to create a new distribution…

>If all stores were owned by car manufacturers, that would be a significant barrier to entry of new automakers.

Is that a barrier to Tesla? It appears a big potential barrier to Tesla (a new automaker) is in fact the dealerships and the law preventing manufacturers from selling directly. In this case it's helping to prevent new entrants into the industry.

Re: Auto Dealers Whine That Tesla Stores Are Illegal

#56

Post by ssimpson »

btilly wrote: post #41
lysol wrote: post #32

Earlier quoted context omitted.

This is normal. The dealer makes very little from a new car. They have to recoup that from trade-ins and selling used cars, which have a higher margin. New cars don't offer a lot of wiggle room because the invoice price for them is set, and they already sell them for little profit.

The dealer makes more than that from the new car. In addition to the invoice price (which is significantly higher than the dealer price) they also make money from add-ons, extended warranties, and the loan terms. This doesn't stop them from making top dollar on everything else that they can though.

And some manufactures have "holdback" which means the dealer can get a percentage back if the car sells within 90 days. For VW it is 2% off MSRP.

http://www.edmunds.com/car-buying/dealer-holdback/

Re: Auto Dealers Whine That Tesla Stores Are Illegal

#57

Post by dasil003 »

Timing is ripe for Tesla to join up with other auto manufacturers to start a PR campaign to get these laws overturned. Normally special interests are the only ones who care enough to lobby about niche issues which is how we end up with so much bass-ackwards legislation. But in this case it's manufacturers vs dealers, and the public by and large hates dealers, so this could quickly be turned against them and I bet they'd shut up pretty fast.

Re: Auto Dealers Whine That Tesla Stores Are Illegal

#58

Post by jetti »

techdmn wrote: post #52
jetti wrote: post #28

Earlier quoted context omitted.

Not to mention that there are some states that just prohibit the sales of vehicles on Sunday. That is what I find amazing. I can't imagine being told that one day a week I'm not allowed to sell my product.

It does seem a little odd, but as a resident of one of those states I think it's awesome. I can peruse the lot with zero chance of being approached by a salesperson. IMHO it actually facilitates car sales, because one day a week people can look at new cars without immediately feeling like prey.

You can do that online any time. What you see in the lot on Sunday is the same as what you would see online.

But as a resident of one of those states as well, I hate it. Not because I want to buy a car on Sunday but because if the dealership is open the service section of the dealership would also be open.

Re: Auto Dealers Whine That Tesla Stores Are Illegal

#59

Post by ImprovedSilence »

travisp wrote: post #44
jwr wrote: post #20

Today I found out that USA (arguably the most libertarian country on earth, as far as business is concerned) has strict laws governing the sale of vehicles, said laws actually preventing companies from selling vehicles. I find that quite amazing.

Under most rankings of economic freedom, the United States barely manages to be in the top 10. The Heritage Foundation places Hong Kong, Singapore, Australia, New Zealand, Switzerland, Canada, Chile, Mauritius, and Ireland all above the United States on their Index of Economic Freedom. Source: http://en.wikipedia.org/wiki/Index_of_Economic_Freedom

Doesn't Australia have hideously terrible internet regulations? I guess that wouldn't fall under economic freedom...
Post reply on HN