Let's get Tesla to build their new factory near Austin (Rule: for rent, insurance)

[Austin97]

Originally Posted by scm53

The issue isn't Tesla, per se. It is the precedent it would create, which the other factories would then insist upon. As far as competition, if Ford owned all the dealerships in the state, how would that foster competition?

I just bought a new car. Shopped the internet for the best price. Even got prices from dealers as far away as California. In the end, it turned out that the Austin dealer was within $200 of the lowest. I never went in there - did it all online. I'm just glad they, and their parts inventory will be there, when I need it fixed.

The "confidence" issue is a red herring. I think it is all about control.

I dont care how the market shakes out. However the state should not be dictating how the market is sorting itself out. If ford wants to own all its dealerships, Im fine with that. Other car companies will do something different and customers will get to choose the experience that works best for them. Right now the government is limiting our choice of business model we want to do business with.

[scm53]

Originally Posted by Austin97

I dont care how the market shakes out. However the state should not be dictating how the market is sorting itself out.

I don't know what your complaint is. You can buy a car from the guy next door, you can buy one off Craiglist, you can buy one from your brother-in-law, you can buy one from a hundred lots in this town. The auto market is wide open. But if you want the protection of the lemon law on new car purchases, you need state licenses of dealerships, no matter who owns them.

Once you let any factory get a dealership, they all will have them. And if you think you will get a better deal from a factory, with monopoly pricing power, than from an independant businessman, you aren't thinking clearly.

[Novacek]

Originally Posted by scm53

#1. Do you really think that the manufacturers would offer lower prices if it weren't for the dastardly dealers?

Because adding additional middle-men _always_ lowers the price.

[hoffdano]

Originally Posted by scm53

The issue isn't Tesla, per se. It is the precedent it would create, which the other factories would then insist upon. As far as competition, if Ford owned all the dealerships in the state, how would that foster competition?

I just bought a new car. Shopped the internet for the best price. Even got prices from dealers as far away as California. In the end, it turned out that the Austin dealer was within $200 of the lowest. I never went in there - did it all online. I'm just glad they, and their parts inventory will be there, when I need it fixed.

The "confidence" issue is a red herring. I think it is all about control.

There is no evidence to show that Ford wants to own all the Ford dealerships (anywhere). But if they did, the would have to compete with GM, Honda, Toyota, and of course Tesla.

There is no place for the government interfering in commerce like this.

[scm53]

Originally Posted by hoffdano

There is no evidence to show that Ford wants to own all the Ford dealerships (anywhere). But if they did, the would have to compete with GM, Honda, Toyota, and of course Tesla.

There is no place for the government interfering in commerce like this.

You're right. So let's dump the lemon law. Isn't that "interfering in commerce"?

[scm53]

Originally Posted by Novacek

Because adding additional middle-men _always_ lowers the price.

You obviously don't understand monopoly pricing power.

How much do you think a dealer makes on a car, anyway? What costs of the dealership would be removed if a manufacturer owned the dealership? Real estate? Nope. Inventory carrying costs? Nope. Building depreciation? Nope. What do you think you are paying for that would disappear?

[Novacek]

Originally Posted by scm53

You obviously don't understand monopoly pricing power.

As noted above, they still wouldn't have a monopoly, they'd have to compete with other brands.

Alternatively, they _already_ have a monopoly. Ford is the only one supplying Fords to the dealers. Yet somehow that "monopoly" position isn't being abused.

Originally Posted by scm53

What do you think you are paying for that would disappear?

A reduction in overlapping, redundant dealerships. Outlets could be opened or closed in response to true demand.
A reduction in required dealership capacity because some buyers could buy direct over the internet.

[scm53]

Originally Posted by Novacek

As noted above, they still wouldn't have a monopoly, they'd have to compete with other brands.

Alternatively, they _already_ have a monopoly. Ford is the only one supplying Fords to the dealers. Yet somehow that "monopoly" position isn't being abused.

No, they don't. Because the manufacturer doesn't set the selling price. So you have absolutely no idea if the monopoly position is being abused because it doesn't exist in the current system. It most certainly would if there was no choice but to buy a make from only one entity.

Originally Posted by Novacek

A reduction in overlapping, redundant dealerships. Outlets could be opened or closed in response to true demand.
A reduction in required dealership capacity because some buyers could buy direct over the internet.

Actually, Texas, due to the franchise law, doesn't have the "over-dealering" that is prevalent in other states. Maybe they should adopt our system.

If there is reduced demand, dealerships go out of business right now. If there is increased demand, the existing dealerships get more efficient and become more competitive. Ultimately, new dealerships open. And there is nothing that prevents buying over the internet right now. Just bought my last car that way.

You still have failed to identify what costs would be reduced in a manufacturer only sales environment. Because there aren't any.

[Austin97]

Originally Posted by scm53

You still have failed to identify what costs would be reduced in a manufacturer only sales environment. Because there aren't any.

you are making an assumption that it would be a manufacturer only sales environment. All Im saying is allow the manufacturers to sell direct to customers. In most industries manufacturers dont anyway because it is too much trouble. The auto industry probably wouldnt change much. Manufacturers rarely compete with their retailers. Dell sells direct, HP sells through retailers and very little direct.

Benefits to customers arent always costs.

I have no idea if costs would be reduced. What I do know is that tesla would be able to sell their cars in texas which they cant do now. That is ridiculous.

Right now consumers are inhibited from being able to buy teslas in texas with the full tesla experience (test drive etc). Tesla doesnt want to sell through franchises because they want to guarantee the buying experience.

Im not sure why you are presenting the false choice of lemon law OR manufacturers selling direct. The lemon law could still exist even if manufacturers had the ability to sell directly to consumers.

[scm53]

Originally Posted by Austin97

Im not sure why you are presenting the false choice of lemon law OR manufacturers selling direct. The lemon law could still exist even if manufacturers had the ability to sell directly to consumers.

Because I'm not. I was just pointing out that one can't decry the intrusion of government into commerce in the presence of a franchising law, and also expect the intrusion of government into commerce in the presence of a lemon law.