Count on the car-dealer lobbyists of America to keep fighting the good fight on behalf of the state franchise laws that protect their members' businesses by making it illegal for you to buy a car directly from a carmaker.
And, for that matter, to throw in comments about the supposed consumer disadvantages of electric-car maker Tesla Motors and its direct-sales model while they're at it.
Tesla, of course, has proven a surprising thorn in the side of those auto-dealer business interests with its insistence on selling cars over the Internet directly to buyers--and then delivering those cars to their doors.
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The latest statements come via AutoGuide, quoting Bill Fox, this year's chairman of the National Automobile Dealers Association. He spoke at an Automotive Press Association luncheon in Detroit a few weeks ago, and took questions from assembled media afterward.
Fox called Tesla's service model--in which the company sends a flatbed truck with a loaner car to swap for any Tesla that needs service--an "inconvenience," presumably against the owner of another brand having to pay to have the car towed to a dealer who may or may not elect to provide a loaner.
“The advantages of the dealer franchise system are numerous,” explained Fox.
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They include dealerships with built-in service departments, versus Tesla, which he says has "a service facility somewhere" and must pick up the car.
Interestingly, Fox apparently isn't adamantly opposed to Tesla's direct-sales model. He just doesn't think it'll work in the long run.
“I don’t think it’s a very good solution," he said. "I don’t think that the result will be that the consumer will be satisfied in the end.”
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Tesla's consumer satisfaction ratings thus far would seem to belie that, but the earliest Model S in existence is a little more than three years old, so perhaps time may bear out Fox's suggestion.
He acknowledged in response to a question that dealers have lobbied aggressively--as has NADA--to alter franchise laws so Tesla's sales model is illegal.
That's justified, he suggests, because the dealers have made substantial investments in their facilities (often over generations).
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Dealer lobbyists often cite the many advantages for consumers of the dealership model, which seem to boil down to "You can haggle over price."
Fox doesn't directly address why such a superior model wouldn't triumph in the marketplace if alternatives were allowed.
He does, however, say that the average dealership profit--including new- and used-vehicle sales, financing, service and parts businesses--is just 2.2 percent.
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The article closes as follows: Fox said, “If you want to sell directly, apply to get a dealer’s license.”
Except that under the franchise laws of many states, it would appear that no carmaker can be granted a franchise to sell its own cars.
Neither Fox nor AutoGuide addresses this apparent conundrum.
[hat tip: Brian Henderson]