Has it dawned on anyone?

[brianman]

I know. Woot already said these value adds were unneeded by Tesla. I was only pointing out that they are intended to be value add for a manufacturer in their original appearance. I do not think thy add any value currently.

If something offers added value, that should be apparent and appreciated by the potential participant/client/buyer. If you have to force something on someone, odds are it actually has zero or negative value. In other words, let something stand on its own merits not be propped up by some nanny law that forces it on all new entrants into a market.

 

[AudubonB]

At this point (supply constrained), all dealers will do is get an extra cut from Tesla's margins without helping sales at all.

Are you so sure? Do you have a good sound economic understanding of what "supply constrained" means? Is this statement one which would hold water in a state legislative inquiry as to whether NADA should have its way or not?

Plus dealers suck at selling EVs (except for a couple of EVangelists like Paul Scott). When we reach a demand constrained point (probably Gen III), then maybe dealers will make sense, but not right now.

"...dealers suck..." is an opinion, not some incontrovertible fact. That sort of statement helps the cause not one whit.

Saturn's failure had nothing to do with the no haggling. They failed because there were plenty in corporate that did not like the idea, plus Saturn didn't have cars to up-sell people on (they had a single compact platform during the SUV craze in the 1990s to 2000s) and was too slow to release new models. There was also UAW pressure. Near the end Saturn was really not that different from other GM divisions (selling rebadged Opels).
http://knowledge.wharton.upenn.edu/article.cfm?articleid=2366

All right, that may be true. However, I posited this as a question "...help TM or its opponents..." not to learn why Saturn failed, but whether the point that another auto brand had had in the recent past a no-haggling model could be useful. I don't know the answer! I know that I, too, have had mostly unpleasant experiences at new-car dealerships, and that my last two >$50K autos were ones I purchased via an on-line dealer through an extremely active model-specific internet forum - a recipe for ultra-high visibility and close to minimal economic rent being extracted by the dealership.

 

[Jason S]

"...dealers suck..." is an opinion, not some incontrovertible fact. That sort of statement helps the cause not one whit.
....
I know that I, too, have had mostly unpleasant experiences at new-car dealerships, and that my last two >$50K autos were ones I purchased via an on-line dealer through an extremely active model-specific internet forum - a recipe for ultra-high visibility and close to minimal economic rent being extracted by the dealership.

While your opinion of the sucky time you've had at new-car dealerships may not be enough to conclude that "dealers suck", perhaps the FACT that Tesla outsold both Leaf and Volt, much less expensive plug-in vehicles with wide dealer networks, is enough to persuade you that dealers aren't as good as Tesla at selling plug-in vehicles?

Pretty sure the Tesla Model S didn't sell more than the equivalent ICE vehicles to Volt or Leaf. Then again, maybe those vehicles in ICE form are simply better cars?

 

[dsm363]

All right, that may be true. However, I posited this as a question "...help TM or its opponents..." not to learn why Saturn failed, but whether the point that another auto brand had had in the recent past a no-haggling model could be useful. I don't know the answer! I know that I, too, have had mostly unpleasant experiences at new-car dealerships, and that my last two >$50K autos were ones I purchased via an on-line dealer through an extremely active model-specific internet forum - a recipe for ultra-high visibility and close to minimal economic rent being extracted by the dealership.

One of the local Infiniti dealerships has a 'one simple price' policy for sales. I don't know if they actually stick to it but they advertise it heavily. Dealers could adopt that model if they wanted to.

 

[DavidM]

How true. As you know one of our legislators own car dealerships. :crying:

Larry

Yes, and he's keeping a close watch on Tesla's progress.

 

[malcolm]

But this thread is about the long-term situation. So long as we're speculating about what Tesla could do if they were out to change the entire industry's sales model, maybe they could enlist an unlikely ally in this fight: the other auto manufacturers. I suspect there are many of them that don't like being forced by law into the independent dealer model, and would like to sell direct also. Maybe if they combine forces, they could change the laws so that all auto manufacturers could do what Tesla is trying to do.

My enemy's enemy is my friend.

Long term it is likely that the large automakers would like to squash Tesla or out-compete them or buy them out. Whatever.

Short-term though, is it in their interest to unofficially provide Tesla the resources to fight this particular battle on their behalf? Could/would/should (say) Toyota or Daimler get involved?

We would never get to hear about it of course.

 

[Botbldr45]

I have really enjoyed reading this thread...... thanks carogan for fighting for the dealers......... thanks to everybody for discussing in detail what his arguments are. Yes he is a dealer and no he doesnt own a Tesla. Thats OK ....... the dialog was outstanding and valid points made on all sides. I guess i'm really sad as an old guy (66 yrs old) watching everything unfold ....again as it has before.....we still cant see that we are going down in a burning heap. The incredible change in the weather patterns killing Americans all over the country, the ambient temperature of the Earth rising and the water level in NYC harbor up one foot over last ten years....... yes that does mean the entire water level on the Planet. This is the fallout of a status quo society that will not embrace change.

I think the EV is part of possible solution to stop the slide toward changes in our planet that will kill millions. We are all too busy knit picking about laws that will protect the jobs of thousands of people wrapped up in the dealers and auto sales industry. If we don't open our eyes to a larger picture the impact will affect millions. North Carolina not allowing Tesla's in the state is peanuts compared to the eastern third of the state being destroyed by megastorms and hurricanes the potential for which we are all ignoring. The loss of the millions of jobs and family fortunes alluded to by carogan is harsh......... sorry......... if Tesla cars can change the carbon footprint and atmospheric changes threatening our way of life by a fraction of a percent then thats what HAS to happen.

No I'm not a tree hugger....I bought my Roadster not to save the Planet but to smoke a few Porches and Hondas with big tail pipes! Mission accomplished! I fought my battles for my country, watched my friends die in useless wars for dubious political gain and wrote my district representative, state senator and congressman. Got nice form letters thanking me for my concern on such "an important issue". My guess is the "important issue" could have been the pot hole on Rt #3 or the MD MVA Tesla registration issue. As caragon says ..... guess they are too busy looking at the "bigger issue" without seeing whats going on.

So there are my thoughts.... go on......... slam me.........i dont care. As long as I can manage to get into my roadster and my wife plan for delivery of her Brown MS ...... brown!! who gets a brown car..... oh well thats OK too. If MD makes me an outlaw for having a Tesla and trying to help our grandchildren live to be my age ......... screw 'em... ill move to CA!

 

[aviators99]

There *is* a valid argument that if you don't enforce an existing law (or selectively enforce it), it's a reason for the law to get thrown out. Therefore, I do not blame the NADA for trying to get existing laws enforced, despite the fact that they are ridiculous (imo).

But the laws were intended to protect dealers from manufacturers competing against them with their own cars

I think NADA is digging their own grave here. If they left it alone, these laws would have likely stood as they were, and manufacturers would not have been able to compete against their own dealers. HOWEVER, by fighting against Tesla, these laws will get a good look, and stand a really good chance of being reversed, perhaps even by SCOTUS. This could mean hard times for dealers all over the country.

 

[dsm363]

There *is* a valid argument that if you don't enforce an existing law (or selectively enforce it), it's a reason for the law to get thrown out. Therefore, I do not blame the NADA for trying to get existing laws enforced, despite the fact that they are ridiculous (imo).

But the laws were intended to protect dealers from manufacturers competing against them with their own cars

I think NADA is digging their own grave here. If they left it alone, these laws would have likely stood as they were, and manufacturers would not have been able to compete against their own dealers. HOWEVER, by fighting against Tesla, these laws will get a good look, and stand a really good chance of being reversed, perhaps even by SCOTUS. This could mean hard times for dealers all over the country.

Exactly! I think years from now NADA will regret their aggressive actions and the fact they accelerated the downfall of the dealership model.

 

[lolachampcar]

The grave it already dug for all the reasons people have stated. NADA is trying to fill in the hole before people realize it is for NADA members.

The best thing is for this process to proceed slowly as slow progression has the best chance of being permanent progress.

 

[rogbmw]

My question is this....IF some states do not allow TESLA to sell directly, then what would keep Tesla from...say... licensing a "franchise" to the service manager at Tesla service center. Then stipulate that everything else remain the same. Maybe the problem would be that in having the service manager as a Tesla employee would be a conflict of interest?

...just thinking and my 2 cents worth.

 

[Norbert]

But it can (rightly) be argued that NADA isn't necessarily attempting to block outside competition. It is my understanding that Tesla is free to set up dealerships anywhere they want.

My understanding is that Tesla is in fact free to set up dealerships in most states, except in a few states, since in these states the dealerships have to be franchised businesses which must be financially independent companies, with laws protecting their right to do whatever they think is needed to make profit on a local basis.

One of the problems with this is that a Tesla dealership wouldn't necessarily make profit if it were an independent business. In many areas initial sales may be so low that they exist more for educational purposes (perhaps pointing to Tesla's online sales system), and as a preparation for future products. Tesla in its current state cannot accommodate franchised dealers who go bankrupt once in a while, nor can it flourish in a dealership which does not exclusively sell electric cars. Selling electric cars is difficult, and it takes Elon and George to do the "impossible".

 

[lolachampcar]

So the North Carolina bill was modified to remove the Tesla offending language.
The bill in New York died.
This leaves Virginia and Texas (?).

 

[bollar]

So the North Carolina bill was modified to remove the Tesla offending language.
The bill in New York died.
This leaves Virginia and Texas (?).

Texas can't be revisited again until 2015; New York in January 2014; North Carolina also January 2014.

Virginia, to the best of my knowledge, is a dispute with the DMV over Tesla's inability to receive a dealership license. I suspect Tesla will have to appeal and ultimately file suit against the state to make progress there.

 

[Beaker]

So I see very little in the Dealers provide benefits to the community & consumers that Tesla cannot argument:

	Conventional Dealer	Tesla Gallery / Service Center
Pay taxes on cars sold	Y	Y
Pay property taxes	Directly	Indirectly via lease
Support little league teams	Y	Y
Employ sales staff	Y	Y
Employ service staff	Y	Y
Help the customer with disputes*	?	No
Mfg fails who will maintain?	Dealer, but most likely independent shops	Service center has trained staff and can live as an independent shop
Dealers provide Competition	Mfg sets price - dealer marks UP (not down)	Mfg sets price.

* So the only leg they have to stand on is the "Help the customer with disputes" argument. However personal experience shows that the Mfg needs to be used to solve dealer disputes (e.g. honoring warranty) Twice with my Jeep (no longer owned) the Dealer refused to honor the "free rental" if a warranty repair took longer than 24 hours. In both cases the dealer refused to look at the car that day (car was non functional and was towed in) and also refused to give the rental car. We had to call Chrysler corp. and it even took them 20 min to convince the dealer to give us the rental.

 

[jerry33]

* So the only leg they have to stand on is the "Help the customer with disputes" argument. However personal experience shows that the Mfg needs to be used to solve dealer disputes (e.g. honoring warranty) Twice with my Jeep (no longer owned) the Dealer refused to honor the "free rental" if a warranty repair took longer than 24 hours. In both cases the dealer refused to look at the car that day (car was non functional and was towed in) and also refused to give the rental car. We had to call Chrysler corp. and it even took them 20 min to convince the dealer to give us the rental.

Right. In most cases (personal experience and forums) it's the manufacturer that makes it right in spite of the dealer. The dealer is only interested in the number of cars they put through in a day and the amount of parts sold during service. The standard response is either "no" or whatever pops into their head that they think the customer will settle for and then go away so they won't lower the service volume. You need documentation and a call to the manufacturer to get action. (There are exceptions, but the exceptions are few and far between.)