Do Dealer Efforts To Ban Tesla Sales Backfire When Public Notices?

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Are car dealers winning battles against Tesla Motors, and its direct-sales model, that will set them up to lose the bigger war?

For almost five years, state dealer associations have lobbied legislators to change laws to make Tesla's direct-sales model illegal, requiring that all new cars be sold solely through franchised dealers.

MORE: Michigan Car Dealers Slip One Over On Tesla, Ban Direct Sales: UPDATED

Win or lose--there have been some of each--the dealers are alerting the public to something that most never knew or considered: Carmakers can't legally sell new cars to buyers.

With consumers mostly disliking the experience of dealership car purchases, and largely feeling like they've been taken advantage of--even if, statistically, they haven't--each new Tesla battle likely makes more people wonder: Why can't I buy a car the same way I buy an Apple computer?

Vision for Lincoln dealership in China

Vision for Lincoln dealership in China

Much of America is now comfortable with speccing out and ordering hugely varied types of goods online at a fixed price--some of them quite expensive.

Thus far, the most major drawback for consumers that dealer groups have been able to propose is that Tesla's fixed prices preclude bargaining on the five- or six-figure price of a car.

Some buyers, though perhaps a minority, appreciate the opportunity to haggle. But a large number may ask: Why should every vehicle carry a different price? Why can't cars be sold at fixed prices?

ALSO SEE: Auto Dealers Try Charm: Why Tesla Direct Sales Hurt Buyers, They Say (Video

Meanwhile, a recent charm offensive by the National Automobile Dealers Association (NADA) to explain the benefits of the current model doesn't appear to have gained much traction.

In fact, a recent post on the progressive website Alternet neatly summarizes in its headline the deepest fears for dealers and their lobbyists: "How Tesla and New Car Technologies Could Send Auto Dealers the Way of the Dodo Bird."

(Full disclosure: This website and its editor are cited in the piece.)

Frame from 'A Good Deal for All' video, by National Automobile Dealers Association (NADA), June 2014

Frame from 'A Good Deal for All' video, by National Automobile Dealers Association (NADA), June 2014

 

It notes, among other factors, that the Federal Trade Commission appears to be on Tesla's side, in favor of alternative models.

The commission wrote in a blog post, "Regulators should differentiate between regulations that truly protect consumers and those that protect the regulated.”

Already, there have been quiet rumblings from within the dealer community that the legal bulwark may not hold.

 

 

DON'T MISS: Tesla 'Will Prevail In All States' Against Dealer Lawsuits: Dealership Commentator

 

Outside retail analysts suggest that in a networked and digital age, a distribution structure set up a century ago to relieve automakers of the real-estate and employee burdens of auto ordering, storage, financing, and sales may now be increasingly outmoded.

Despite their status as the second priciest purchase we make, is there a reason they should be immune to the same transformative forces that e-commerce has wrought on bricks-and-mortar retail?

It's worth noting that auto dealers are often viewed similarly to politicians: People dislike them in the aggregate, but often approve of their local guy.

Dealers provide employment to dozens if not hundreds of people, and usually support local causes, charities, events, and initiatives to keep their store name in the public eye.

Former Fisker of Bellevue, Washington, dealership, closed as of July 2013 [photo: Brian Henderson]

Former Fisker of Bellevue, Washington, dealership, closed as of July 2013 [photo: Brian Henderson]

But does that level of support matter to a Tesla buyer who gets her car delivered to any destination she choose? Whose car is picked up for service while a brand-new, top-spec loaner car is provided? And, should it?

Perhaps any forward-looking local dealer should start to wonder what the future holds, if his business is only staving off new competition by making every alternative approach illegal.

 

Especially as the public starts to catch on.

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