GM continues to try to stifle competition

[jerry33]

Are there any stats on the distribution and makeup of automotive franchise dealers? For example, Penske Automotive Group has 355 dealers.

It feels like the promise of competition through the dealer franchise system is actually a false promise. Particularly in a city where most (all) of the dealers are owned by the same people/group. In that case, one might be better off having multiple manufacturers to compete instead of salesman all under the same umbrella no matter the brand.

Correct. The dealer system provides only the appearance of competition.

 

[Ed Hart]

GM Has A New Logo

I could not resist the image of GM that this thread suggests: GM wants to kill Tesla...pronto

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Like you, I have had many GM products and three S Class Mercedes. My Tesla is the finest car I have every owned, Full stop. Here's how I feel about the pathetic reaction of GM. I seem to recall that GM promised to be more progressive in addressing environmental and fuel economy matters as part of the bailout. Like you, I am done with GM vehicles.

 

[jeffro01]

I said it on Twitter, and I'll say it here. GM's anticompetitive stances towards Tesla has cost them a customer, permanently. As soon as our Volt is ready to be replaced we'll either replace it with an X or something else to go with our S but no matter what we replace it with it won't be a GM car. Period.

And to think, I once supported their bailout... Yeah I'm ashamed to admit that now...

Jeff

 

[MsElectric]

I could not resist the image of GM that this thread suggests: GM wants to kill Tesla...pronto

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Like you, I have had many GM products and three S Class Mercedes. My Tesla is the finest car I have every owned, Full stop. Here's how I feel about the pathetic reaction of GM. I seem to recall that GM promised to be more progressive in addressing environmental and fuel economy matters as part of the bailout. Like you, I am done with GM vehicles.

We don't even rent GM vehicles when we travel any more. That miserable company needs to be called out on requiring a bailout and now using that money to go after an American car company like tesla.

 

[Jopo43]

I too once thought GM Chevy in particular was the only car I would buy. If someone would buy this VOLT I would never drive one again..... Won't ever buy another GM product ever!!!! Americans money bails them out !!!!!!!! The arguments they use are such BS dealerships protect us poor consumers......stealerships ha ha .... I will fly from Indiana to California to pick up my model 3 wont drive a mile to buy a GM Product ..... let them fail this time no bail out...... TESLA will RULE!!!!!

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Actually they remind me of Kodak ... they had the patent for the digital camera in the 1970's they commented who would want one had the film monopoly...... and know they are bankrupt!!!! We can only hope GM follows!!!! They dont want to sell EV's just SUVS go away.....TESLA will RULE!!!!!

 

[jbcarioca]

Are there any stats on the distribution and makeup of automotive franchise dealers? For example, Penske Automotive Group has 355 dealers.

It feels like the promise of competition through the dealer franchise system is actually a false promise. Particularly in a city where most (all) of the dealers are owned by the same people/group. In that case, one might be better off having multiple manufacturers to compete instead of salesman all under the same umbrella no matter the brand.

Yes there is. Automotive News regularly publishes dealer rankings. I'll upload it if I can complete the export process. The largest AutoNation has a CEO, Mike Jackson, who supports publicly Tesla direct sales model, called opposition hypocritical.

 

[wdolson]

I too once thought GM Chevy in particular was the only car I would buy. If someone would buy this VOLT I would never drive one again..... Won't ever buy another GM product ever!!!! Americans money bails them out !!!!!!!! The arguments they use are such BS dealerships protect us poor consumers......stealerships ha ha .... I will fly from Indiana to California to pick up my model 3 wont drive a mile to buy a GM Product ..... let them fail this time no bail out...... TESLA will RULE!!!!!

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Actually they remind me of Kodak ... they had the patent for the digital camera in the 1970's they commented who would want one had the film monopoly...... and know they are bankrupt!!!! We can only hope GM follows!!!! They dont want to sell EV's just SUVS go away.....TESLA will RULE!!!!!

There is a more telling parallel between Kodak and the car industry. Kodak was making a fair number of moves to get established in the digital market, but they were facing a major shift in technology that left them with no viable business plan. Film photography has a long logistics trail. My father was a professional photographer and he had a direct dealership with Kodak. As his photographic work dropped off, he started selling supplies to other photographers. At one point he was the only direct Kodak dealer between Los Angeles and the Bay Area.

Most consumers are only familiar with film, they bought film and when it was exposed, they dropped it off at the drug store, then picked up the finished pictures later. Photographic processing required a tremendous amount of chemicals as well as photographic paper and other supplies to support processing. My father had a large darkroom with two massive sinks for processing film and a machine the size of a Ford Fiesta to process the exposed paper. He also had a room with a number of enlargers, one had to have the ceiling modified because it stuck up so high.

At the peak of my parent's supply business film was only about 10% of their business. Their main profit was on the chemicals and other darkroom supplies. My father stocked supplies for digital photography at the end before he shut down the business (he was 84 and decided it was time to retire). We had a storeroom full of supplies on the back of our garage when I was a kid. We could also only get one car into the garage because the other bay was mostly full of supplies. When my parents moved, my father built an extra wide garage and put everything on shelves out there. The entire line of digital supplies took up about 1/2 of one shelf and the traditional photography supplies filled the rest of one side of the garage. Digital photography requires very little in the way of supplies and everything except writable CDs/DVDs are reusable. There just isn't the ongoing supply market for digital photography that film had. Kodak didn't go bankrupt so much as they didn't see the change coming and were too slow to adopt, ultimately there was nothing to adopt to. Camera companies are doing fine because the core of their business model hasn't changed all that much, camera hardware has changed, but the number of cameras and accessories sold per year didn't change much, though cell phone cameras put a dent in the low end camera market. The higher end which is where the biggest profits are hasn't changed much.

Car companies are like the camera companies, but car dealers are like Kodak. Dealers make their money with ongoing support for ICEs which isn't there as much with EVs. EVs have more of a logistical tail than digital photography, but it's less than ICEs. Car companies can switch to EVs and they can go on like Nikon has gone on in the camera world, but car companies have tighter bonds with their dealers than Kodak had with camera companies and I don't think anybody knows how to surf the changes in technology and keep dealers in business.

 

[bonnie]

Great analogy!

 

[Cebe]

This has me thinking that it's the car dealers that should be figuring out the charging network, something that's 5 nines reliable, operates on a subscription basis, ubiquitous, and in parts attached to service centers where you can still change tires or suspension pieces, where you can get a quick software update for the cars without over the air updates and see if they can salvage their businesses...

 

[Ed Hart]

I too once thought GM Chevy in particular was the only car I would buy. If someone would buy this VOLT I would never drive one again..... Won't ever buy another GM product ever!!!! Americans money bails them out !!!!!!!! The arguments they use are such BS dealerships protect us poor consumers......stealerships ha ha .... I will fly from Indiana to California to pick up my model 3 wont drive a mile to buy a GM Product ..... let them fail this time no bail out...... TESLA will RULE!!!!!

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Actually they remind me of Kodak ... they had the patent for the digital camera in the 1970's they commented who would want one had the film monopoly...... and know they are bankrupt!!!! We can only hope GM follows!!!! They dont want to sell EV's just SUVS go away.....TESLA will RULE!!!!!

Let me add to the Kodak story. A key player in their ultimate failure was Walmart. How so, you say?! Here is the story the way I got it some years ago.

Kodak was looking for a way to make the switch to digital, but they were "handicapped" from making the change by the fact that the film business had margins that were staggering, over 90% factory margin I was told. They could see that their film business would be dying. They knew they could only buy cameras from Asia and brand them as Kodak; making a competitive camera in the US would be impossible. After some halting efforts, they started to source some digital cameras from Asia to sell with the powerful Kodak brand; they saw no way to restructure the existing company around the much lower margins of digital camera sales.

At a weekly staff meeting involving the COO and the leaders of film and digital strategies, the film guy pulled out a letter from Walmart that essentially said, 'if Kodak continues to pursue its digital camera strategy, Walmart will be forced to change suppliers for its film processing business.' Fuji was in the wings to replace Kodak for that huge and very profitable part of Walmart's business. Kodak let that letter be "the last straw" and slowed their digital camera efforts. Later, Kodak focuses on liquidating in a way that would assure their pensions were funded, then closed down. Sad...but this is what happens with technology change is too big and too fast to follow.

Here's a bit of history on digital imaging:

History of Digital Imaging & Image Sensors | FORZA Silicon Corporation

 

[Bimbels]

Let me add to the Kodak story. A key player in their ultimate failure was Walmart. How so, you say?! Here is the story the way I got it some years ago.

Kodak was looking for a way to make the switch to digital, but they were "handicapped" from making the change by the fact that the film business had margins that were staggering, over 90% factory margin I was told. They could see that their film business would be dying. They knew they could only buy cameras from Asia and brand them as Kodak; making a competitive camera in the US would be impossible. After some halting efforts, they started to source some digital cameras from Asia to sell with the powerful Kodak brand; they saw no way to restructure the existing company around the much lower margins of digital camera sales.

At a weekly staff meeting involving the COO and the leaders of film and digital strategies, the film guy pulled out a letter from Walmart that essentially said, 'if Kodak continues to pursue its digital camera strategy, Walmart will be forced to change suppliers for its film processing business.' Fuji was in the wings to replace Kodak for that huge and very profitable part of Walmart's business. Kodak let that letter be "the last straw" and slowed their digital camera efforts. Later, Kodak focuses on liquidating in a way that would assure their pensions were funded, then closed down. Sad...but this is what happens with technology change is too big and too fast to follow.

Here's a bit of history on digital imaging:

History of Digital Imaging & Image Sensors | FORZA Silicon Corporation

I wonder why Walmart would have cared? But this would not surprise me at all. A family friend had a business of making those tacky fringed throw blankets with any possibly theme (Christmas, sports teams, etc) and basically became a hostage of Walmart - the contract with them was so much of their business that they ended up having to bend to every demand. One involved using a particular type of palette or something and cost them a fortune to switch over to, all the while with margins so low because of the price they would pay....eventually they went under. He used to say NEVER do business with Walmart.

 

[JER]

Kodak actually did see digital photography coming a long way off; they had a portfolio of relevant patents dating from the 1980s through to their demise, and demonstrated prototypes decades before most consumers would get any examples.

No, their biggest error was assuming there would necessarily be revenue coming from all photographic impressions. Their presentations from the time assumed this business model would inevitably continue.

Instead, most of the companies profiting from our photography today are getting their revenue from device sales (mostly smartphones) and/or advertising (alongside images hosted online). There's generally no consumer-side transaction for duplicating or distributing anything besides physical copies of images, and the Web has made the latter seldom necessary. Printer manufacturers ate up the remaining opportunities - a market Kodak entered but still couldn't survive.

Their core product was commoditised (to the point of being free) as complementary to other services provided by the eventual winners. You can't compete with free, even when you try to sue them (which Kodak did, a lot).

Kodak's failure is clearly not a great analogy for the future of car manufacturers, but it might be quite close to what’s coming for hydrocarbon fuels. When energy availability is primarily about building infrastructure (not obtaining fuel), pre-paid energy packages for your vehicle will make excellent sense for everyone. There’ll be no need for the “razor blade” dependency model.

 

[Jopo43]

I still think it boils down to Kodak did not want to go digital even though they had the patents and GM doesnt want to sell EV's for real..... you can point to the volt and bolt all you want but no charge network makes the bolt just a more useless volt....most people dont even understand how the volt really works and its been out since 2011.... if they did they would have kept the EV1 not killed it off. GM will die a horrible miserable death trying to wish it was just like the old days just as kodak did ..... GM doesnt want to stop selling SUVs no more than Kodak wanted to stop selling film that they once had a monopoly on. BURY GM ....TESLA will RULE!!!!!

 

[bonnie]

I was heading down to Sac today in my Roadster and a GM truck started to move into my lane, totally unaware of me. I hit the brakes, laid on the horn and narrowly avoided disaster.

And the first thing I thought was, 'Really GM? Don't you think this is taking it just a little too far? Let's not make it personal.'

 

[Jaff]

Eeesh!

They've got a contract out on Bonnie!

Guess I'd better sell my white Roadster...don't want any confusion out on the roads...:wink:

 

[bonnie]

I put a sign in the window that says WrongRoadster. Hopefully they'll look for you or dsm or one of the others.

 

[Ktowntslafan]

Ontario: Paul Carter is spear-heading. Right now, letters are great. No need for a public campaign (yet). They're listening, from what I understand. The issue is keeping incentives from just being tied to the cost of the vehicle, but rather have an income-based test like we now have in California. It's much more fair. Otherwise, billionaires can buy a dozen Leafs and get full rebate, but someone stretching to buy a Tesla cannot.

Letters. Write letters. Tesla supplied the contact info to Ontario owners. If you need it, I'll post.

Going the wrong way up here in Canada...MSRP caps spreading. This out today-Ontario and BC changes too close together and similar in cap to be coincidence.

And now BC...WOW!

Clark is also set to announce an electric vehicle-price cap of $77,000 in an effort to encourage more British Columbians to buy electric vehicles.


Many electric vehicles are pricey, with one of the lowest-price Tesla electric vehicles currently selling for about US$80,000 while other Tesla models list for about US$130,000.
B.C. has spent $31 million in its Clean Energy Vehicle program over the past five years. There are more than 2,300 clean energy vehicles on the road in B.C., says Clark's statement.


"We're also targeting the fund to people who need the support when they buy affordable electric vehicles, those that sell for $77,000 or less," says Clark's statement.

Electric cars in B.C. to get HOV green light, bypass occupancy requirements

Thread 1: Vancouver Sun - Anti-Tesla electric vehicle subsidy article... - Page 5

Thread 2: Ontario EV incentives upped to $14K... and decreased to $3k for Tesla - Page 28

 

[Jaff]

Not just billionaires buying Leafs Bonnie...the B.C. program info cited (to the effect) that they wanted to see CEV "fleets"...why the hell should prospective individual EV buyers lose out on a vehicle credit in favour of business?

You could potentially get a large taxi company to buy 100's of Leafs, and grab most of the credits...from an environmental standpoint, it really doesn't make a lot of difference if the credit goes to a company over an individual, but, since the Guv is already imposing a socialistic income cap on this program, why do this?...they are having their cake and eating it too!

It exposes the folly of imposing a vehicle ceiling cap in the first place!

 

[jdw]

When you net out the rebates as they were, there was already sufficient clawback for both vehicle price and income. In BC and QC, there are luxury taxes that add about an extra 3% to vehicles that cost over about $55K. On top of that, the rebates are taxable at anyones marginal tax rate.

In Quebec for example, there is an $8000 rebate, but you also pay about $800 more a year for registration and the $8000 is added to your income. So for four years, for someone in the top tax bracket, the various Governments claw back $3200 in registration fees and about $4000 in income tax, netting the rebate at not much more than $800.00 for a high income Tesla owner.

In BC, there was a $5000(?) rebate, which nets out to about $1000 for a high income Tesla owner after the extra 3% PST and income tax on the $5K.

These rebates already had much more advantage to lower priced vehicles and lower income buyers - there wasn't really a need for what has happened.

On the bright side, since the net benefit is actually quite low, you could argue that fixing the optics of subsidizing Tesla's for "rich" people, or putting in the fix for Ford, GM, Nissan and Toyota is not all that significant. I still think that it is a shame that it has drifted from incentivizing people to buy & drive electric to politics, optics and backroom fixes.

 

[Ed Hart]

I wonder why Walmart would have cared? But this would not surprise me at all. A family friend had a business of making those tacky fringed throw blankets with any possibly theme (Christmas, sports teams, etc) and basically became a hostage of Walmart - the contract with them was so much of their business that they ended up having to bend to every demand. One involved using a particular type of palette or something and cost them a fortune to switch over to, all the while with margins so low because of the price they would pay....eventually they went under. He used to say NEVER do business with Walmart.

Well....Walmart made a LOT of money on photo prints. Even if they knew that someday digital imaging and viewing would replace prints, they were no doubt going to "ride that horse until it drops." That is what incumbency does. Luddites!