Published on October 12th, 2012 | by Christopher DeMorro
Tesla Motors Under Fire From Dealership Lobby
The Internet has revolutionized everything, from the way we shop to the way we date. But one thing the Internet has not done is change the way we buy cars. Tesla Motors is trying to emulate the success of Apple by eschewing dealership franchises in lieu of direct sales. This has some dealership associations suing, though their lawsuit could have the opposite effect.
Right now, 48 U.S. states have laws prohibiting carmakers from selling cars directly to customers. This is due in large part to the dealership lobby passing laws like those in California prohibiting competing dealers selling the same brand of vehicle within a mile of each other.
These laws have in part led to increasingly deceptive dealership practices, and it doesn’t take much Googling to find dealership horror stories involving everything from lead footed service technicians to sleazy sales practices. Since these are franchises that companies like GM has relatively little control over, your experience can vary widely.
Tesla Motors is trying a new model, selling cars directly to customers via 17 Tesla-owned stores centered in major metro areas. This is similar to the Apple Store, which is credited as being a large part of Apple’s wild financial success in the past decade. That is why Tesla hired the former Apple executive who came up with the Apple Store concept, George Blankenship.
This move to cut out franchise dealerships has Bob O’Koniewski, VP of the Massachusetts State Automobile Association up in arms. If Tesla is successful in selling cars directly to customers, why wouldn’t other automakers move to copy their success? It could bring the whole dealership structure crumbling, to the benefit mostly of consumers.
Imagine if cars were priced like iPads; a set price, where you select the options, no haggling, no lying, no need to try and eek out an extra profit. You pay the same price as everybody else. Isn’t that how car buying should be?
For Tesla’s part, the electric carmaker seems unwilling to budge. If they can’t have a store on site, they tell customers to make reservations online. Simply point and click. Why can’t we do this with other automakers? It is definitely to Tesla’s advantage, and I can’t be the only person who thinks the who concept of independently-owned dealerships is SO 20th century.
The lawsuit can go one of two ways; either dealerships get to keep their franchise model, or the walls come crashing down, opening the way for carmaker-direct sales. This lawsuit could bring into question the whole dealership franchise model, and public questioning of the reasons for these methods might put the pressure on automakers and dealers to come up with something better.
Like I said before, I can buy just about anything else online. Why not cars?
Source: Automotive News