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.
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.
Tesla owners throw appreciation day celebration at Eden Prairie, MN Tesla Store.
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.”
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).
Reception at Tesla Store in New York Ciy following cross-country road trip in Model S electric cars
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.
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]