AutoNation CEO Supports Tesla Direct Sales Model

AutoNation CEO

The popular narrative goes something like this: Tesla wants the right to sell its electric cars directly to customers, but the big, bad car dealers don’t want that- they want to force you to buy through them, so they can rip you off. You’ve seen that play out a few times now, in states like New Jersey, Texas, and Ohio, and the powerful car dealerships are the bad guys. AutoNation’s CEO Mike Jackson, however, didn’t seem to get the same memo.

In fact, AutoNation’s CEO is warning dealers that their “line in the sand” approach to Tesla’s direct sales model could end up hurting them in the long run, and points to the electric car-maker’s proposed Gigafactory as just one of many unforeseen consequences. “You want to talk about unintended consequences,” says Jackson, referencing the 6500+ new jobs the Gigafactory would create. “You pick a fight with Tesla. Now they (want to) build a big battery factory. What are you going to do?”

Dealers fighting Tesla’s direct-sales model say the carmaker is breaking long-standing state laws that promote price competition and protect consumers, particularly in areas of warranty coverage and safety recalls. Critics of the dealerships, however, point out that this seems more like a law intended to keep dealers “in the loop”. Jackson, however, sees some potential benefits for AutonNation- America’s largest dealer group- if Tesla’s efforts to sell directly to consumers in certain states goes their way. For AutoNation, Tesla isn’t a competitor. Instead, it’s a blueprint for a future sales model that could benefit customers, and which AutoNation may be able to share a piece of.

 

Source | Photos: Autonation, Automotive News (AN) via Target Evolved

 

Jo Borrás

I've been in the auto industry 1997, and write for a number of blogs in the IM network. You can also find me on Twitter, at my Volvo fansite, or chasing my kids around Oak Park, IL.