I keep reading stories how states are granting Tesla the right to sell directly to consumers in their own stores. But some states are fighting this…NJ.
What is the interest of the government to prevent the direct sell? What’s in it for government to protect the third party dealership model?
This seems crazy that a company can’t just open a store and sell a comparable product.
a short version. Auto companies in the 50s? were taking advantage of dealerships don’t know the specifics google it. Saw laws were past prohibiting them from selling directly (of course it helped that the dealerships formed assoc. and lobbied strongly for these laws – which they still fight strongly for to this day).
Just another side of the Auto industry most people are clueless about. Auto dealerships are independently owned and operated. The manufacturer has some influence but not control.
Sorry to lazy to google it for you. Guess not to lazy http://en.wikipedia.org/wiki/Car_dealerships_in_North_America
They “funny” part of this is how NJ is trying to get around it. They will allow Electric cars to be sold by the manufacturers. While this still screws traditional car manufacturers, it does protect their local dealers.
That’s about all i could piece together. So it’s the auto associations lobbying to keep tesla out and protect their own jobs by not allowing direct sales?
Why would a republican controlled state (TX, NJ, NC) be in favor of this? We see direct sales in a number of markets that have killed off local business. This just seems so antiquated.
So it’s the auto associations lobbying to keep tesla out and protect their own jobs by not allowing direct sales
More along the lines of: if the law doesn’t apply to Tesla, and they can sell direct to consumers, why shouldn’t Ford or Honda be allowed to as well? Protectionism for the dealers. Yes, what you said.
That’s about all i could piece together. So it’s the auto associations lobbying to keep tesla out and protect their own jobs by not allowing direct sales?
Why would a republican controlled state (TX, NJ, NC) be in favor of this? We see direct sales in a number of markets that have killed off local business. This just seems so antiquated.
Welcome to crony capitalism. Republicans do not want limited government, otherwise, they would stop growing government. They just want a big government to do different things than the big government the Democrats want.
A helpful quote for you:
When buying and selling are controlled by legislation, the first things to be bought and sold are legislators.
P. J. O’Rourke
edited so the quote wouldn’t appear 3 times.
I keep reading stories how states are granting Tesla the right to sell directly to consumers in their own stores. But some states are fighting this…NJ.
What is the interest of the government to prevent the direct sell? What’s in it for government to protect the third party dealership model?
This seems crazy that a company can’t just open a store and sell a comparable product.
There are 3 states very opposed to it: AZ, TX and NJ. TX and AZ are VERY quickly backpedaling in an attempt to woo Tesla’s battery factory.
There is one common denominator between those 3 states…
But what is the state gov’t interest? Nothing. Tesla is selling a vehicle that abides by all applicable federal laws. States get their sales and licensing taxes.
What’s in it for the gov’t to protect dealerships? Kickbacks. Tonnes of kickbacks. And hookers and blow.
Yeah, Musk is doing a good job of teasing all of this states with his gigafactory in order to get them to reconsider their ban on direct sales. Rick Perry in TX is quickly looking for a way to allow Tesla to sell their cars in hopes of getting the factory there even though it seems like Nevada is the probable location.
I keep reading stories how states are granting Tesla the right to sell directly to consumers in their own stores. But some states are fighting this…NJ.
What is the interest of the government to prevent the direct sell? What’s in it for government to protect the third party dealership model?
This seems crazy that a company can’t just open a store and sell a comparable product.
There are 3 states very opposed to it: AZ, TX and NJ. TX and AZ are VERY quickly backpedaling in an attempt to woo Tesla’s battery factory.
There is one common denominator between those 3 states…
But what is the state gov’t interest? Nothing. Tesla is selling a vehicle that abides by all applicable federal laws. States get their sales and licensing taxes.
What’s in it for the gov’t to protect dealerships? Kickbacks. Tonnes of kickbacks. And hookers and blow.
But even in states like NY & CO the state is capping the number of stores tesla can open. This will slow their sales a bit.
I guess I never realized that local dealership associations had so much political capital. Seems to me that times have changed. I suspect most bigger dealerships aren’t locally owned. And the days of a car strip are long gone in favor of the net.
I keep reading stories how states are granting Tesla the right to sell directly to consumers in their own stores. But some states are fighting this…NJ.
What is the interest of the government to prevent the direct sell? What’s in it for government to protect the third party dealership model?
This seems crazy that a company can’t just open a store and sell a comparable product.
There are 3 states very opposed to it: AZ, TX and NJ. TX and AZ are VERY quickly backpedaling in an attempt to woo Tesla’s battery factory.
There is one common denominator between those 3 states…
But what is the state gov’t interest? Nothing. Tesla is selling a vehicle that abides by all applicable federal laws. States get their sales and licensing taxes.
What’s in it for the gov’t to protect dealerships? Kickbacks. Tonnes of kickbacks. And hookers and blow.
But even in states like NY & CO the state is capping the number of stores tesla can open. This will slow their sales a bit.
I guess I never realized that local dealership associations had so much political capital. Seems to me that times have changed. I suspect most bigger dealerships aren’t locally owned. And the days of a car strip are long gone in favor of the net.
Back many years ago, I interviewed for a job as an Architect for Penske Auto Group. He owns 388 dealerships!
There was a planey money show on this a while back: http://www.npr.org/blogs/money/2013/02/12/171814201/episode-435-why-buying-a-car-is-so-awful
IIRC, the bulk of the show wasn’t on the salesmen/saleswomen but on the laws protecting the dealerships.
Just listened to the segment. Interesting stuff.
They “funny” part of this is how NJ is trying to get around it. They will allow Electric cars to be sold by the manufacturers. While this still screws traditional car manufacturers, it does protect their local dealers.
This sounds to me an offer for competition. Someone needs to make a competing electric car to Tesla. That’s all.
This sounds to me an offer for competition. Someone needs to make a competing electric car to Tesla. That’s all.
Most major manufacturers already have them. Presumably Nissan’s Leaf, Ford’s Focus, and BMW’s i3, Chevy’s Spark/Volt, etc, could now all be available direct.
The question is if any of those manufacturers are going to risk bypassing their dealers. I imagine probably not until Tesla gets really threatening. It’s not there yet - it’s still a boutique car. But Tesla definitely doesn’t plan to be low-volume forever.
I’ve been thinking about that NPR segment today. Seems that this distorted and legally-enshrined way of doing business was a reaction, back in the 20’s, to unfair business practices on the part of the auto manufacturers. Got me thinking about the auto workers’ unions, and the peculiarities involved with that labor market, which also came about in response to management’s overly conspicuous bullying.
Upshot seems to be that the American auto manufacturers are still paying the regulatory price for their early bad behavior. Similar story to the US railroads, which were nearly killed by the mountain of regulation they brought down upon themselves.
There may be a lesson to be learned here.
That’s about all i could piece together. So it’s the auto associations lobbying to keep tesla out and protect their own jobs by not allowing direct sales?
Why would a republican controlled state (TX, NJ, NC) be in favor of this? We see direct sales in a number of markets that have killed off local business. This just seems so antiquated.
Welcome to crony capitalism. Republicans do not want limited government, otherwise, they would stop growing government. They just want a big government to do different things than the big government the Democrats want.
A helpful quote for you:
When buying and selling are controlled by legislation, the first things to be bought and sold are legislators.
P. J. O’Rourke
edited so the quote wouldn’t appear 3 times.
Not sure why you’re zeroing in Republicans for this…this is the policy in pretty much every state, even those run by Democrats.
Spot
Not sure why you’re zeroing in Republicans for this…this is the policy in pretty much every state, even those run by Democrats.
I think it’s pretty obvious why he’s zeroing in on Republicans. They are the ones who claim to be so pro free market and label the Democrats as anti-business, yet here they are standing in the way of a company from selling its product directly to a consumer because of the lobbying pressure of a competing group.
I’m not trying to wade into the politics of this, it just seems absurd to ban a company from being able to sell its products because other similar companies sell their products in a different manner. Adapt to competition, don’t ban it. If dealers think direct sales may make them look obsolete, then do something to prove you’re not.
If you really want to get cheezed about this systemic 2 and 3 tier business models, lets talk about alcoholic beverages.
Same issue, producers are not allowed by law to sell directly to retailers/stores or end customers. They MUST go through Distributors to get their product to the market. It is such a scam.
.
Meanwhile, while the government continues to do its best to repress competition, people will continue to wax indignant in the Lavender Room about how the free market causes big monopolies.
There are some limits to that though right? Because you can buy direct from a lot of microbreweries at their breweries. Wine too, I’ve definitely ordered wine directly from a vineyard. Although vineyards can only ship to certain states, presumably because of deals like what Tesla is trying to work out.
But yes, still ridiculous.