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Steal from the Best - Can the Auto Companies sell directly?

Discussion in 'Cars and Transportation' started by Grant Gerke, Jul 10, 2013.

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  1. Grant Gerke

    Grant Gerke Member

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    After my experiences with GM & Ford and countless other reported EV selling challenges for the Auto majors, I was wondering if they could adopt Tesla's model and sell direct to the consumer?

    I've heard reps and auto SMEs bemoan the fact that EV manufacturing is not profitable and they need to scale it. In order for scale to work, larger number of EVs need to be sold and Ford claims 1) lack of charging infrastructure and 2) challenges for dealers to sell EVs (more time and education for the consumer).

    Anyway, does anybody know if the major Auto OEMs have to sell all their products through dealerships?
     
  2. jerry33

    jerry33 S85 - VIN:P05130 - 3/2/13

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    The laws in most states are written specifically to prevent the manufacturers from competing with their franchised dealers. When the laws were written, most dealers were family run businesses that sold only one brand of car. Most of those dealers have now gone the way of the family farm. Dealers are now mainly big business, often multi-state, and carry a number of car brands (even if they are in separate locations). The car manufacturers don't have the same power over them that they used to. If a manufacturer is too difficult, they just won't sell that brand--far different from when the manufacturer was the only source of cars for a single dealer.
     
  3. djplong

    djplong Member

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    The franchise laws are there to protect the dealers. I honestly DO believe that they serve a purpose in an existing market. I'd hate to think if I was a Chevy dealer for decades and, suddenly, *GM* opens a store next door. Now a *Tesla* store is a different story. There's no franchised dealer network selling teslas out there that you'd be undercutting.

    "Way back when", the deal was GM saying "If you buy the franchise, we guarantee you a territory where YOU have EXCLUSIVE rights to sell Chevys".

    They did NOT have the right or power to say "You have the exclusive right to sell CARS" - a Ford dealership could open up next door.
     
  4. dsm363

    dsm363 Roadster + Sig Model S

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    As long as the GM store doesn't undercut them in price it is pure competition for quality of service and experience. It would drive prices down.
    Are these dealership contracts indefinite?
     
  5. bollar

    bollar Disgruntled Member

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