As I see more and more complaints on this forum concerning pricing, trade-in, delivery and servicing, I am beginning to consider this issue.
The fact is, direct sale does not always deliver a better price and experience to customers compared to dealerships. If dealerships are in fact more efficient, then consumer surplus will be greater with dealerships.
Based on both personal experience and information I have read on this forum, Tesla's delivery and service experiences are sub-par. Service experience is particularly bad in busy locations with many owners. If this is the case now, then I can't even imagine what it will be like when Model 3 comes out and both the delivery and service needs are multiplied many folds.
Moreover, it's uncertain if customers even get the best pricing with a direct sales model. Operating stores are expensive and those costs need to be spread into the cars. If stores operate inefficiently, compared to a dealership, then they would actually cost more, be more risky for the company, and lead to higher car prices.
Overall in the past few years, my experiences at dealerships (mostly premium brands) have been great. Sales, delivery and serving have all been good. These are experts at doing what they do, while Tesla stores are not. I am beginning to think that they may be economically more efficient at doing what they do and dealership model may actually be better than company stores in maximizing consumer welfare.
What are others' thoughts?
The fact is, direct sale does not always deliver a better price and experience to customers compared to dealerships. If dealerships are in fact more efficient, then consumer surplus will be greater with dealerships.
Based on both personal experience and information I have read on this forum, Tesla's delivery and service experiences are sub-par. Service experience is particularly bad in busy locations with many owners. If this is the case now, then I can't even imagine what it will be like when Model 3 comes out and both the delivery and service needs are multiplied many folds.
Moreover, it's uncertain if customers even get the best pricing with a direct sales model. Operating stores are expensive and those costs need to be spread into the cars. If stores operate inefficiently, compared to a dealership, then they would actually cost more, be more risky for the company, and lead to higher car prices.
Overall in the past few years, my experiences at dealerships (mostly premium brands) have been great. Sales, delivery and serving have all been good. These are experts at doing what they do, while Tesla stores are not. I am beginning to think that they may be economically more efficient at doing what they do and dealership model may actually be better than company stores in maximizing consumer welfare.
What are others' thoughts?