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c0lo writes:
"Following the ban on Tesla direct sale in New Jersey, Elon Musk wrote a message to the people of New Jersey on the Tesla Motor's blog, explaining why they don't want to go through dealers and what will happen next with the stores in New Jersey. To put a context around the issue: Tesla soared in consumer satisfaction, while Ford dropped and it's likely to continue dropping.
The post:
- explains why Tesla don't want to sell through dealers, claiming a conflict of interest between selling and servicing gasoline and electric cars.
- explains what will happen with their presence in New Jersey; the stores will be transformed into showrooms, with no info on price being offered, and servicing will not be impacted by the new regulation.
- tells people what they can do - buy online and receive the car delivered interstate or buy from across the river in Manhattan; They can also contact their representatives if they want back the right to buy directly from a store."
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Elon Musk to the People of New Jersey
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Can anyone remember when the times were not hard, and money not scarce?
(Score: 5, Interesting) by VLM on Monday March 17 2014, @01:17PM
There are laws specifically to prevent that. Not prevent Tesla specifically, but prevent dealers from being owned by the mfgr.
At least theoretically, (wink wink) the consumer benefits from warranty work and recall work done by dealer and mfgr being in "opposition" to each other, sorta.
Also there is some truth to one state DMV, one state attorneys general, and dealership operates in one state (plus or minus funny business near borders and family owned operations). If we had a federal registration system... if we had federal regulation of dealerships... then a nationwide dealership concept would make a lot of sense.
Its a static vs dynamic stability problem. Allowing mfgr owned dealers would result in GM coming in, undercutting all the locals for all other brands until they close... it would be like the walmart effect, pretty much, but even worse. You'd get competition only until the competitors declared bankruptcy and then it would be monopoly time.
The benefit of a dealership network is resiliency. Resiliency has costs.
The short version is its not because of tesla but because of GM, ford, toyota, etc.
(Score: 4, Interesting) by Grishnakh on Monday March 17 2014, @02:14PM
Its a static vs dynamic stability problem. Allowing mfgr owned dealers would result in GM coming in, undercutting all the locals for all other brands until they close... it would be like the walmart effect, pretty much, but even worse. You'd get competition only until the competitors declared bankruptcy and then it would be monopoly time.
What are you talking about? GM isn't the only giant automaker out there; Toyota is much larger, and Volkswagen is the biggest of all. Ford is also quite large, as are Fiat and BMW. (Here's a list.) [wikipedia.org]
In addition to that, how is GM going to undercut anyone? GM is only going to sell GM cars. If someone wants to buy a BMW or Mercedes, there's no way in hell they're going to buy a GM of any kind. Same goes for most Japanese car buyers, Volvo buyers, etc. There's tons of people out there who wouldn't buy a GM even if it meant paying a giant premium to avoid it. There's still tons of people who absolutely refuse to consider any American brand.
Mfgr-owned dealers would just result in lots of dealerships (just like now), all owned by the MANY different automakers; we'd just have lower prices since we wouldn't have annoying middlemen who are out to screw over the consumer and stain the reputation of the manufacturers.
(Score: 2) by mmcmonster on Monday March 17 2014, @02:14PM
You'll always have competition so long as the Nissans' and BMWs' of the world still exist.
Let the relic dealers of the world get bought out and you may actually see better customer satisfaction knowing that they get the same price no matter where they buy the GM car.
Buying a car is stressful when purchasing through a dealer. Every time I do, my friends laugh and say that I got robbed (more than they got robbed on their car purchases, even).
I love the Tesla way.
Also, the number of jobs lost by losing a dealer shouldn't be many. The car companies still need showrooms and sales people. And if you get the dealer out of the way the salesperson's job is much easier. It will be more like purchasing a computer. Good prices and pretty much no negotiation.
(Score: 3, Interesting) by VLM on Monday March 17 2014, @02:24PM
"get the same price no matter where they buy the GM car"
Like Saturn? Which was a division of GM?
The point is that dealers skim at least 10% of the retail sales price market. Obviously not all of that is "excess profit" because even a mfgr owned dealership would have to pay to keep the lights on, pay prop tax, etc.
Still the first major mfgr to go from independent to corporate would get an instant 5% price discount. So the competitors can either go corporate, try to convince people to pay more because its "local", or close.
Am I the only person here old enough to remember when Walmart arrived and the little stores all closed? Admittedly the little stores did mostly suck, so I don't mind, but still...
Now I can either go to walmart with the ghetto people or target where the hot women shop and have my identity stolen. And there's not much else. And they know it, so prices have risen.