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Think of dealerships as being the distribution network for the automobile manufacturers. They represent the manufacturer (GM, Ford, Toyota, Honda, etc) and handle the sales and servicing of the product.
The old-school model is just that -- the manufacturer builds the cars in a given location (say, Detroit), and ships them to each dealership. Some are purely inventory, and some are pre-sold cars that were ordered by the customer at the dealership. It wasn't the best model at one time, because GM was famous for overproducing cars (in order to satisfy shareholders, of which I am one) and then sticking the dealers with them. At certain times of the year, dealer inventories would rise, and in order to sell the cars, the dealerships would resort to all kinds of sometimes-questionable tactics.
A parallel to this is the computer business. Once upon a time, Compaq, HP, IBM, etc sold notebook computers. But they didn't want to be in the business of selling directly to the consumer, so they sold them through resellers, such as Best Buy, CDW, etc. You couldn't call up Compaq and order a computer from them.
Then Michael Dell discovers, while still in college, that he WANTS to sell directly to the consumer. Dell cut out the middleman (the reseller) and were able to sell you EXACTLY the computer you ordered. That's basically what Tesla wants to do, and it's making billionaire auto dealership tycoons somewhat nervous.
Make sense?
Thank you, but it doesn't make sense. I understand that some car manufacturers may be interested in selling trough a network of dealers. But why is there in place a law that forbids other ways of selling merchandise? What is the reasoning behind it? And, since these laws are dated, why are they still in place today?
Direct to and from people models will only become more numerous. Not something govts like.
It's only a few Republican state which don't like it and even with them they're just responding to bribes from dealers who are upset about lower cost and more efficient competition. They are trying to block that competition via legalistic restrictions because they don't want to have to compete in the free market.
But that's the Republican way. Only a dullard would believe their talking points when their actual ACTIONS can been seen.
The New Jersey Motor Vehicle Commission voted Tuesday to ban the direct sale of vehicles in the state, becoming the third state in the nation to prevent Tesla from selling to consumers.
As I said in the other thread on this topic it is THREE states, not five as the OP claims, which have recently passed such anti-competitive and anti-consumer laws. Three Republican controlled states.
Arizona, Texas, Nevada, and Texas are the only states under consideration for the battery plant. I am pretty sure Arizona for example with governor Brewer could get the law changed in a heart beat. With 6,500 jobs at stake there will be a whole lot of concessions from any state.
As I said in the other thread on this topic it is THREE states, not five as the OP claims, which have recently passed such anti-competitive and anti-consumer laws. Three Republican controlled states.
Actually I did read the link but i misread and added Nevada and New Mexico because they are in the running to get the new factory.
I believed they were sold out of existing dealers. If I am wrong I have no problem with them setting up their own network. If not the dealers have invested on them already. It wouldn't be right to just pull them.
I can appreciate this thinking, however, changing how one does things should not be a problem. Investment is subjective. I am not sure how their cars have been sold since I haven't followed them all that much. However, EVs have been getting the short end for far too long. Centrally controlled models have problems. The articles I have seen seem to indicate Tesla had their own dealerships. Tesla Open for Business. Finally Virginia Allows Tesla To Establish Traditional Dealership | The Truth About Cars
The real concern here is the fear this will be where things go. The trends are pointing in this direction. Just a matter of time. Tesla (NASDAQ: TSLA) Fights State Laws
quote:
Supports of these laws want Tesla to abide by the same rules as everyone else, and they are concerned that Tesla’s departing sales technique would encourage other manufacturers to follow suit — setting a precedent and preventing franchise dealers from competing against manufacturers.
In a conventional automobile market, franchise dealerships sell cars on the manufacturer’s behalf, with profits negotiated between the two parties.
It is worth noting Tesla is not ruling out dealerships in the future, but as of now company heads believe the company would perform better by retaining control of prices, do a better job explaining car benefits, and would offer better customer service to consumers.
Another example on how Republicans aren't anymore free market than Democrats and in many ways they are even more restrictive. Whatever happened to supporting free markets?!
NO SURPRISE HERE: "Indeed, the Administration and the NJMVC are thwarting the Legislature and going beyond their authority to implement the state's laws at the behest of a special interest group looking to protect its monopoly at the expense of New Jersey consumers. This is an affront to the very concept of a free market," Tesla said in a post on its corporate website.
Sounds like any another main scream politician bending over for special interests, just like Obama does.
If you're going to be outraged, at least spread it to all those who deserve it, including many liberal dems. Corruption is rampant in DC, so cherry picking Christie is weak at best.
It's only a few Republican state which don't like it and even with them they're just responding to bribes from dealers who are upset about lower cost and more efficient competition. They are trying to block that competition via legalistic restrictions because they don't want to have to compete in the free market.
But that's the Republican way. Only a dullard would believe their talking points when their actual ACTIONS can been seen.
Don't buy into the DnR game, nor do I see evidence we have a free market, however, it will be interesting to see where this goes.
Tesla motors, at just under 60% institutional ownership has plenty of both DnR's invested in them.
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