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Bloomberg - Is Tesla a Victim in New Jersey Sales Fight?

Discussion in 'Video' started by Grendal, Apr 16, 2014.

  1. Grendal

    Grendal Active Member

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    Is Tesla a Victim in New Jersey Sales Fight?

    Is Tesla a Victim in New Jersey Sales Fight?: Video - Bloomberg

    NJADA advocate Appleton speaks about why Tesla should not do business in New Jersey with Matt Miller. Matt has spoken negatively about Tesla in the past. It seems he's been converted.

    Here is a great piece about him showing how to buy and test drive the car:

    How to Buy a Tesla at a Mall Near You: Video - Bloomberg

    Both of these are very well done and I was impressed with his arguments to Appleton.
     
  2. Dutchie

    Dutchie Member

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    Are you kidding? Why can dealers only do warranty work well? Not a word on Service centres, not a word on ranger's services. They can do it just as well!
     
  3. dsm363

    dsm363 Roadster + Sig Model S

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    Jim Appleton obviously knows what is coming and had what he thinks is a good response. Even threw in the iPhone argument without being promoted and says. 'But it doesn't travel at 60mph on the highways'.

    I thought Matt Miller did a good job though. Mentioning the service centers and ranger service would have been good. He brought up GM which I liked and asked if 12 years is considered good then maybe their process isn't so great. Like that.
     
  4. SCW-Greg

    SCW-Greg Active Member

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    Those arguments are so incredibly weak!
    He was even tripping over his words trying to get his talking points right. So disingenuous. He certainly can't buy his own arguments, other than he knows his job is on the line. The only motivator to create some kind of spin.

    Take it to a court and debate the merits, and he'd (the dealers) would be shot down with a resounding verdict. Or take it to the voters for a similar outcome.
     
  5. dsm363

    dsm363 Roadster + Sig Model S

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    States that have ballot initiatives would be a good place to start. Simply say what Tesla is asking that manufacturers with no franchised dealerships be allowed to sell direct.
     
  6. MarkR

    MarkR Member

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    I view the New Jersey ban on sales as ultimately a good thing for Tesla. Tesla has received a massive amount of publicity as a result of the ban and the government of NewJersey looks like a bunch of "stick up their a$$" politicians who are in the pocket of the car dealers.

    My state, Arizona, also has a ban and yet Model S are easily purchased via the internet.
     
  7. scaesare

    scaesare Active Member

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    "All the polls we see say the customer enjoys the car buying experience at the dealer.".

    Wow... I enjoyed the good chuckle...
     
  8. imherkimer

    imherkimer Member

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    His "passionate" argument that Auto Dealers are protecting public safety is just hilarious!
    Only "independent" retailers can "protect" the costumers (and the general public) from the evil auto manufacturers, just like they did with GM! Haaa haaa haa!
    Its Alice in Wonderland, up is down, in is out, having the manufacturer assume responsibility for warranty work is putting the "fox in charge of the chicken coop," because the manufacturer will save a lot of money!

    Its like some kind of study in irony and the contortions of narcissistic self-justification! Can't let Tesla sell direct because they only sell 1/10 of 1% of all the cars in New Jersey.
    We've got to protect public safety by forcing them to use franchised dealers, as a licensing requirement, to sell cars, otherwise its just like allowing drugs to be sold on street corners! Hahaha!
    This isn't about protecting the interests of the Auto Dealers! No, this is about protecting the public, because can't have cars on the roads that auto dealers didn't sell, that would be unsafe!
    See, it's a protection racket! Ha ha ha! And he was so offended by the statement that the Auto Dealers just seem so "mobbed up?" Responding in every way like a genuine New Jersey mobster!

    You can't write this stuff!
     
  9. yobigd20

    yobigd20 Well-Known Member

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    Wow! James Appleton seems like a real true a-hole! He has a lot of trouble explaining why franchise law is for "consumer protection". He stumbles his words, even smirks when trying to give the answer as he knows it's complete BS. His argument is so weak, and then he gets really angry when questioned. He tries to explain that having multiple local dealerships promotes price competition, but fails to mention that all of them are pricing the car thousands of dollars higher than the manufacturer's price. So no, this does not drive down price. The dealership model actually increases the price of a car. At least he admits that one reason for having a dealership is so that they can make repairs on cars and get paid for doing it. That part is true. But again he left out the part that is implied by that model ... that if one of their main revenues is based upon the fact that a car must break for them to get paid. That's not really a big incentive for them to deliver high quality cars, hence a flawed model. He says Tesla wants to control price but thats BS too. Market determines the price of the car. If Tesla prices the car too high, nobody will buy it and Tesla will lower the cost. It's really that simple. He's just trying to protect the dealership monopolies and his job of course. Take's an a-hole to do that so he's perfect for the job.
     
  10. dsm363

    dsm363 Roadster + Sig Model S

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    The main argument is weak. If Tesla wants to overprice their products and not offer service then no one will buy one and will go for a Mercedes or BMW instead. Let the market decide.
     
  11. artsci

    artsci Sponsor

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    Just like the governor of his state:)
     
  12. evme

    evme Member

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    Unfortunately, Matt lost that debate. It has nothing to do with the points, Appleton pretty much had him running around his pitches. Appleton is a lawyer and has much more experience at these kind of presentations. So even if everything Appleton said is BS, he still won the debate in the end. Simply because Appleton looked more confident in what he said while Matt seemed tensed out (I don't blame him since Appleton is spewing so much BS but that is how it is)

    One thing Matt should have went after is not the GM incident, but the fact that car dealers are not consumer advocate groups and that consumer advocate groups are actually in favor of direct car sales. He also should have pointed out that the NHTSA is the one who handles safety, not the dealers. It should be noted though that repair has nothing to do with sales.

    As far as selling securities goes, the reason why 3rd parties handle that is to mitigate fraud. Not to protect the consumer. And you can actually sell stock directly without a brokerage.

    But most importantly, it is important to stay calm and collected no matter what the guy says.
     
  13. moollar

    moollar Member

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    These are my thoughts too. Even though Appleton's points were stupid, Matt Miller didn't hold up very well against him. Matt Miller is just as ineffective at supporting Tesla as he was when he was on the other side of the fence. Not a bad video on purchasing a Tesla though. Helps that he was not debating the opposition.....
     
  14. mkjayakumar

    mkjayakumar Active Member

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    I came out with the opposite conclusion that Appleton looked stupid at the end.

    When Matt categorized the NADA as 'mobbed' it was quite clear that is how he felt and the subsequent apology looked like coerced and half hearted.
     
  15. dsm363

    dsm363 Roadster + Sig Model S

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    #15 dsm363, Apr 17, 2014
    Last edited: Apr 17, 2014
    I thought Matt did a decent job. He certainly brought up examples like GM and other issues I haven't seen other interviewers do in the past but he certainly isn't as scripted or polished as Appleton is. Appleton has had plenty of practice going around on various shows giving the same talking points that sound good but have no substance.
     
  16. evme

    evme Member

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    That was the one point in the debate Appleton lost his temper a bit. Though apologizing is again a show of weakness regardless. A better way to go about it is just say that while the dealers as people might be good people, the failed dealership system is forcing them to commit wrongs that they as people don't want to do. Another thing he could have done was distance "big auto dealers" from "small ones". And accuse the big auto dealers of these antics.

    Again debate is more psychological then anything that is actually said. The audience does not fact check, instead they look at people's reactions to judge who is winning and who is losing. The best way to look at it is rewatch the video with no sound and tell me who it looks that won.

    I think the bringing up the GM point was one of Matt's strongest showings, but unfortunately in doing so he gave up the more important point that dealers are not consumer advocate groups and consumer advocate groups are against the dealers. And unfortunately the GM argument was lost when Matt changed the argument to one Appleton had a scripted answer.
     
  17. Grendal

    Grendal Active Member

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    #17 Grendal, Apr 17, 2014
    Last edited: Apr 17, 2014
    I agree with you. I thought Matt did better than any other interviewer arguing about this. Was he as good as we are here on the forum? Of course not. We understand the strengths and weaknesses of the argument far better than Matt does arguing with the Appleton mouthpiece. Appleton's arguments are ridiculous but he says them with such firm conviction they might seem reasonable to someone who is uninformed. The problem he has (and for that matter NADA) is that the general public doesn't like dealerships. In any battle where public opinion matters then Appleton and his NADA buddies will lose. I don't care that they have BS talking points. They are fighting a lost cause just by fighting Tesla in front of the public. Even an uninformed person watching that matchup would say that Matt won just because Appleton represents dealerships and they hate dealerships.

    Dealership associations have made a serious error in fighting Tesla and they are just now catching on to it. Here is my reasoning on this: the dealership associations don't really care about Tesla at all. Whether they can sell a Tesla or not is unimportant to them. They are afraid that if Tesla gets a pass and can sell directly then their manufacturers can follow suit and cut them out. Instead of fighting Tesla they could have shored up their protection laws and ignored what Tesla was doing. Instead they chose to try and stop Tesla from selling directly. Invariably this has led to media attention. Now the public is asking questions that NADA does not want to be asked. This will be a huge loss for them if they keep it up.
     
  18. dsm363

    dsm363 Roadster + Sig Model S

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    This is spot on I think. If the dealership model ever gets invalidated they will look back and see this as the step that accelerated the entire process. Even if they had allowed Tesla in but held the line there I think their business model would still go away but likely not for a few more decades.
     
  19. Grendal

    Grendal Active Member

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    Exactly. There is evidence to support this in the next day hour long Bloomberg expose/dissection of the dealer's position and how it is flawed and not in the customer's favor.

    Where Are Tesla Direct-Sales Battle Lines Drawn?: Video - Bloomberg

    Appleton is a good arguer but just managed to piss off Matt Miller. Miller used his reporter's position to pick apart the entire argument and make Appleton look like the mouthpiece for dealerships that he is.
     
  20. Brass Guy

    Brass Guy Member

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    "Tesla is not a victim..." "...all that is being required of Tesla is to submit to the licensing requirements of the state of New Jersey." "We don't change laws that are tried and true, and that protect public safety, to accommodate a startup company..."
    Maybe I remember it wrong, but isn't that the requirement that was just modified to require an adjacent service center with a certain minimum square footage? He claims that Tesla should follow the established rules. Tesla had been following the rules, but the established rules were modified to specifically restrict Tesla's unique circumstance.

    "All the ... polls that we see say that people enjoy the car buying process."
    I have to wonder about these polls. Were the only allowed responses "enjoy, thoroughly enjoy, better than sex?" I have yet to encounter a single person who has not indicated a distaste for the dealership experience when asked.

    "Tesla has the same retailing cost that the auto retailer has."
    This is untrue, plain and simple. Tesla keeps their retail costs down by not needing an inventory of cars or huge showrooms. Customers may have to wait up to 3 months (less lately I think) but they get exactly the car they want, not one that's almost what they want. I don't think it'd be right to include advertising costs here, as that's really just by choice. However it might be noted that not only do the larger manufacturers advertise, but also the independent dealerships; so advertising costs are somewhat compounded. BTW I'm getting tired of those "You've won a prize" mailings.
     

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