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Department of Justice Paper Advocating Direct Sales of Cars by Manufacturers

Discussion in 'TSLA Investor Discussions' started by Curt Renz, Jun 19, 2013.

  1. Curt Renz

    Curt Renz Active Member

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  2. Denarius

    Denarius Active Member

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    Excellent find!
     
  3. Curt Renz

    Curt Renz Active Member

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    Thanks. Here's another one written in 1999 by a Federal Trade Commission official to a senior North Carolina legislator offering the opinion that a bill to prevent direct sales by car manufacturers would adversely affect competition and harm consumers: [FONT=&amp]http://www.ftc.gov/be/V990008.shtm

    [/FONT]
     
  4. Denarius

    Denarius Active Member

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    These need to be sent to politicians in states having issues. If laws are still passed there is no doubt that they are more interested in their doners contributions than their constituents.
     
  5. EV2BFREE

    EV2BFREE Member

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    Great find!
    The dealer argument makes sense for current dealerships that are set up. All of the time and money invested in a dealership would be lost if the manufacturer could just come in and sell their cars directly. In Tesla's case, there are no dealerships already set up. There are no dealerships that will end up losing money from manufacturer competition. The only thing thing that blocking direct sales would accomplish is the limiting of choice by the consumer.
     
  6. Discoducky

    Discoducky Active Member

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    healthy profits...

    dealer service profit.PNG
     
  7. Norse

    Norse Active Member

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    Great find! Lets crush these oil-guys!
     
  8. Curt Renz

    Curt Renz Active Member

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    Indeed, residents in states seeking to block Tesla Motors need to e-mail their governors and state legislators. Seriously, this must be done right now.

    And today each of us needs to e-mail his/her US senators, US district representative, the US Department of Justice, the Federal Trade Commission and the White House.
     
  9. Enadler

    Enadler Member

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    I would agree with this sentiment however shouldn't this be a contract issue not a legal one? For example if I bought a franchise for any business I would expect that there would be a clause in the contract that would prevent the company from opening competing sites in my geographic area, that would include other franchises as well as company owned stores. If the company wanted to reserve the right to open in the area I would expect that the agreement would include language that would provide for some type of buy out on the capital investment. With that being said as a business man I would have the option to accept the terms the company is offering or not, my choice. This is how business is typically done. Why do car dealerships need special legal protections?
     
  10. kenliles

    kenliles Active Member

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    I agree- dealer should have no more protection from the manufacturer than any other source (just like most other businesses) - they either offer the value for the price difference, or not. Through access, local service, support, immediate availability, education. Those values should be tested each day by an alternative direct from the manufacturer if that's what the manufacturer chooses. It should stand as a business decision against the market, not a lobbied legal protection. And that's been proven by now- the monopoly position achieved is what produces such bad reception of dealerships across the spectrum of consumers.
     
  11. Mnlevin

    Mnlevin Member

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    I understand the premise of the Dealers argument as they have a huge investment in their business. That being said I think they are using the protection THEY need from their Manufacturers to stifle competition from TESLA. The TESLA stores operate similar to the franchise dealer, but they are company stores. Because no one has a TESLA franchise, the law should not apply to them, they don't need protection from themselves. The law can be rewritten to allow new business that do not have a franchise system to operate their own stores, and still require the franchise dealers to be protected from their manufacturers.

    BTW, their argument is so lame when they say the public NEEDS them and protects the consumer. As we all know the public totally distrusts them at best, and hates them at least.
     
  12. kenliles

    kenliles Active Member

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    Yes, but the premise of a huge investment in their business converting to legal protection would logic to every other business - each of which has its own set of risks. And the high capital investment they make is in a finished product that carries little risk of eventual conversion via sale as opposed to other capital risks
     
  13. ggies07

    ggies07 Active Member

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    "GM initiated a build-to-order sales model in Brazil for its Chevrolet Celta economy car over eight years ago"

    Ahhh, so they don't mind doing it in other countries, just don't touch our US profits.
     
  14. richkae

    richkae VIN587

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    So if you have a big investment in an obsolete business you need government protection?
    So we should have outlawed digital cameras to protect Kodak, they had a big investment in film?
    We should have outlawed computers - the typewriter manufacturers had a big investment in their business.

    Not only are they bad for the consumer - auto dealerships stifle innovation.
     
  15. ShortSlaver

    ShortSlaver Member

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    Ancient distribution networks have clout and raise a fit but eventually die. Auto dealers are no different; at least as far as it concern Tesla.
     
  16. ggies07

    ggies07 Active Member

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    done! :)
     
  17. Curt Renz

    Curt Renz Active Member

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    A new petition has been posted to the White House website asking the federal government to overrule state laws that require all cars be sold through franchised dealerships. A similar petition was initiated in April but withered long before the goal of 100,000 could be reached.

    Link to petition: allow Tesla Motors to sell directly to consumers in all 50 states. | We the People: Your Voice in Our Government

    Dealerships make most of their money through parts and service. An electric motor has few parts and requires minimal service. The Tesla service division has been mandated to add no profit to the company. If a problem does arise, a Tesla Ranger brings a free loaner to the owner and returns his car to a Tesla service center. Would a dealer be willing to do this? At no profit?

    Dealerships have contracts with manufacturers granting the dealership a protected territory in which the manufacturer and other dealerships cannot sell that manufacturer's cars. There really is no additional need for laws to protect the dealerships' territories. The only reason would be to keep out a new competing brand with alternative methods for sales and service. That's un-American, anti-free enterprise, anti-consumer and contrary to the interstate commerce clause of the United States Constitution. Yet some state legislators bow to contributors of large amounts of money to their election campaigns rather than the desires of their constituents.

    Please sign the petition and then write state and federal officials and ask them to overturn laws preventing Tesla from selling and servicing directly to consumers.
     
  18. Ven Rala

    Ven Rala Member

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    It is also important we educate people we meet and ask about the car. I have easily given test drives/rides or spoken with in detail about the car at least 50 people in the past 4 weeks I have had the car, and I always bring up how the auto dealers are trying to stifle an innovative new car company. Everyone I spoke to cannot believe how ridiculous it is. There are only~12,000 Tesla owners, but if each of us talks to the hundreds of people who come to ask us about the car, we can reach have much more reach. I have signed the petition and tweeted it, but we do need to use every avenue.
     
  19. Jackl1956

    Jackl1956 Member

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    While visiting the Tesla store at Century City I was treated like a gentleman. It was a welcome change. I just signed the petition.
     
  20. ppl

    ppl Member

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    i signed it but the problem is that there are not 100,000 users that visit this site. need to somehow advertise this elsewhere too.
     

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