Why the **** do we have dealers: Tesla

[M0oG0oGaiPan]

why do we need middle men for anything? serious question. why don't manufacturers sell everything direct? a lot of the newer startup companies do this.
Khalsa Brain Games
cards against humanity (although they still use amazon for the larger audience)
lot of the kickstarter companies.

 

[Staples]

The auto industry requires them. They are the sales men of the manufacturers and they are there to up sell .

 

[alkemyst]

People seem to forget they usually are touching and feeling/testing things locally and buying globally.

Most want to at least sit in the car they are buying prior to paying for it.

Also they want a place to bring it too for service/warranty issues/etc.

This thread is absurd.

 

[sdifox]

why do we need middle men for anything? serious question. why don't manufacturers sell everything direct? a lot of the newer startup companies do this.
Khalsa Brain Games
cards against humanity (although they still use amazon for the larger audience)
lot of the kickstarter companies.

so, BBO for all?

 

[Capt Caveman]

why do we need middle men for anything? serious question. why don't manufacturers sell everything direct? a lot of the newer startup companies do this.
Khalsa Brain Games
cards against humanity (although they still use amazon for the larger audience)
lot of the kickstarter companies.

So, you'd buy a car online and if there's a warranty issue, ship it back for service? Seriously, don't know if someone of you are trolling or really this ignorant.

 

[tynopik]

People seem to forget they usually are touching and feeling/testing things locally and buying globally.

Most want to at least sit in the car they are buying prior to paying for it.

Also they want a place to bring it too for service/warranty issues/etc.

This thread is absurd.

company store

 

[alkemyst]

company store

That can work...most won't care as long as they can sit, drive and take it in to be serviced.

Chances are workers will be commissioned so either way they are 'sales'.

I have bought many cars, I have never had the experiences many (without backbones or heart) have had. If the price is wrong, move on. No one is forced to sell anything.

People laughed I wanted more than $30k for my 2006 M3 a couple years ago (it only had 50k miles on it). I got what I wanted and was able to cash out the remainder of the warranty for more money.

I got email / post / pm's and more about how I was out of my mind.

 

[zerocool84]

So, you'd buy a car online and if there's a warranty issue, ship it back for service? Seriously, don't know if someone of you are trolling or really this ignorant.

So Ford or Toyota wouldn't have any local places to sell the cars? I'm not saying it's something I want but your example makes no sense.

 

[Fern]

company-owned shops

is this a difficult concept to understand?

Of course not.

Is it difficult to understand that if let Tesla do this other must also be allowed?

Is it difficult to understand how a current dealer has no chance to survive if their one supplier is allowed to compete against them?

The type of predatory business practices and all the problems it would bring huge problems. And for what? You guys think you might be able to save bucks on a new car?

Fern

 

[Fern]

Bull Shit

He was comparing other car companies to Tesla. Obviously he saw a difference between Tesla's company stores and the dealerships of all other car companies.

Bull Shit.

That's you interpretation pulled right out of your azz.

Lower prices, more consistent service and less sleaze?

LOL.

I have to ask: Are you really this clueless or are you just trolling?

It's more like I'm the one with a clue. Only a dumbazz thinks dealerships, whether corporate owned or independent, serve no purpose.

Any only a dumbazz doesn't understand that a single supplier, or just a majot one, is competition to a business. It's one of the more 'dangerous' forms of competition to a business.

Is there only one car manufacturer around? If you don't like Chevy's policies, go buy a Ford. Or a Chrysler. Or a Honda. Or a Toyota. Or a Fiat. Or a Mini. Or a Kia. Or a Hyundai. Or a Tesla. Or a BMW.

Those aren't interchangeable.

E.g., my last purchase was a small sized 4 WD truck. Honda, Fiat, Mini, Kia, Hyundai, Tesla and BMW might as well not exist.

As it stands I have more options, and I like options. I didn't use the dealership in my town. I used the one in the next town because I could buy it off the website and it's a no haggle place. You can get all the financial info up front with no problems.

I don't believe, or even see how, having a dealership owned and directed by corporate bigwigs in another state is of any benefit to me. And I don't see how, by changing the owner into one that long distance, a dealership will operate significantly different from current practices. This difference is where the profit will flow, and having them flow out of my county/state is no improvement.

Fern

 

[Fern]

Because too many local dealers are total slimeballs. Having a consistent corporate policy is a good thing.

Because dealers are the definition of middlemen, existing to suck more money out of you. The manufacturer has to make a profit on the car and then the dealer has to make a profit on the sale. If the manufacturer owned the entire sales chain, they could sell the same car for less and still make the same profit.

Nope.

Add up the value/cost of capital for one manufacturer's dealerships all across the country. That's the additional investment the manufacturer would have to make to own its own nationwide dealerships. They're going to demand a return (profit) on that invested capital.

I firmly believe the current dealership business model, and all it entails, will be used with company owned dealerships. No change. E.g., salesmen will still be compensated by commission. There will be no cost cutting. No reduction in ad costs etc.

And I cannot agree with the idea that all middlemen serve no valid purpose, add no value, and just drive up costs.

Fern

 

[Fern]

How is it a monopoly? You could still choose between different car manufacturers. Do you even know the definition of a monopoly? Let me help you - Monopoly the exclusive possession or control of the supply or trade in a commodity or service. The commodity is a car.

Idiot.

I know what a monopoly is. It's why I used the term with these '.

Fern

 

[Fern]

-snip-

However, I can't find a service an independent auto dealer provides that a direct manufacturer sales/service outlet could not provide. A manufacturer center would be able to staff knowledgeable salespeople, would be able to provide financing options, would be able to provide post-sales service including repairs.

So what value does the independent dealer add that makes them worth their profit?

All you're discussing is who would be the owner of the dealership. The auto manufacturer is not going to invest millions in a dealership and not need or expect a return on that capital.

What's the benefit of a corporate owned dealership?

You guys think dealers are scummy, well what's the corporate manager sent to run the corp owned dealership going to be like?

Fern

 

[CountZero]

All you're discussing is who would be the owner of the dealership. The auto manufacturer is not going to invest millions in a dealership and not need or expect a return on that capital.

What's the benefit of a corporate owned dealership?

You guys think dealers are scummy, well what's the corporate manager sent to run the corp owned dealership going to be like?

Fern

What is the benefit in not allowing corporate owned dealerships? The only one I can see if protecting the business of private dealerships and that is not a valid reason for a legal restriction. These laws come from a different time, dealerships had nearly 100 years of reign but they just aren't necessary.

I also highly doubt most companies would want to do the company owned thing in the vast majority of cases. But even if they did want to I can't fathom why we should be allowed to tell them they can't.

What is the consumer protection?

 

[CZroe]

What benefit do they offer?

None.

Even though I am against laws that protect he dealership model, you are clearly ignorant of the benefits dealers provide. For example: when my Kawasaki motorcycle has a warranty or service issue I can take it to any Kawasaki dealer for service. I can move across the country and do not have to stay withing range of the dealer I bought it at. This is because of the dealer network. Also, if some special part or equipment or tool was needed to service it, I know that they will have it. If cars are sold like convenience store items: good luck even when taking it back where you bought it.

 

[CZroe]

[You left your shit open on my computer, brother.]

 

[Ichinisan]

Even though I am against laws that protect he dealership model, you are clearly ignorant of the benefits dealers provide. For example: when my Kawasaki motorcycle has a warranty or service issue I can take it to any Kawasaki dealer for service. I can move across the country and do not have to stay withing range of the dealer I bought it at. This is because of the dealer network. Also, if some special part or equipment or tool was needed to service it, I know that they will have it. If cars are sold like convenience store items: good luck even when taking it back where you bought it.

Tesla would build their own service network along with the supercharge station network they are building.

 

[Capt Caveman]

Tesla would build their own service network along with the supercharge station network they are building.

Completely different scale when you're talking about a Toyota, Honda, etc... They have no desire to spend billions to build out this infrastructure when a network of dealerships is already available and economical for them.

 

[Capt Caveman]

So Ford or Toyota wouldn't have any local places to sell the cars? I'm not saying it's something I want but your example makes no sense.

So, you want Ford, Toyota to build out corporate dealerships and spend billions to do so. Why would they want to?

 

[tynopik]

So, you want Ford, Toyota to build out corporate dealerships and spend billions to do so. Why would they want to?

I want them to BE ABLE TO if they so choose

 

[CZroe]

[You left your shit open on my computer, brother.]

You made me rush to bring you keys and I left as soon as I submitted that post. I went back to work without going back up to your apartment so... your fault... except that I gave you the wrong keys earlier as a joke and you took so long to notice that I forgot.

 

[tynopik]

You guys think dealers are scummy, well what's the corporate manager sent to run the corp owned dealership going to be like?

less scummy, because the manufacturer can no longer pass off such behavior as not their fault

 

[tynopik]

Of course not.

Is it difficult to understand that if let Tesla do this other must also be allowed?

yes*

Is it difficult to understand how a current dealer has no chance to survive if their one supplier is allowed to compete against them?

good

(but the manufacturer wouldn't 'compete' with existing dealers, that would be stupid. They'd either go where no dealers are or just yank the franchise license of the current dealer, then it's not an issue

like what happened to all the Chrysler dealers that were deemed 'surplus to requirements')

And for what? You guys think you might be able to save bucks on a new car?

And a better, more consistent experience.

*technically you could structure laws to say something like you're only allowed to have company stores if you don't have any independent dealers in the state

 

[Belegost]

All you're discussing is who would be the owner of the dealership. The auto manufacturer is not going to invest millions in a dealership and not need or expect a return on that capital.

What's the benefit of a corporate owned dealership?

You guys think dealers are scummy, well what's the corporate manager sent to run the corp owned dealership going to be like?

Fern

The return on the capital is in the overall profit of the manufacturer, already manufacturers put millions into private dealerships (generally through investment matching schemes, the dealer puts in 500K and the manufacturer puts in 500K) what return do they get on that? They get a place to sell their vehicles.

The advantage of manufacturer owned outlets is in the economies of scale, instead of each independent dealer needing to reproduce a bunch of components (part sourcing agent, finance manager (who's primarily responsible for dealing with the banks, not customers), stock manager, etc.) many of those jobs can be centralized and a small team would handle the needs of dozens or hundreds of dealers in a region, likewise with IT costs. This is why the large auto groups are more profitable than small single lot dealers, they aggregate the load better, and why places like Autonation and Carmax have been putting the squeeze on the mom and pop used car dealer.

Not to mention that dealers force the service center to produce at 40-60% gross margin in order to make up for the low 5-8% margin on the sales. Since the manufacturer would include the sales costs in the total product margin, that situation would no longer be necessary, and repair costs could be reduced to more competitive with independent repair shops. This would mean savings for those who pay for dealer maintenance, but more importantly savings for insurance companies, and hence drivers.

It's an even better deal for the employees (disclaimer my father has been an automotive painter for over 25 years) who would get the benefits of working for a large corporation with a strong bargaining position, especially for things like healthcare which adjust rates based on the size of the risk pool.

Also I don't *think* car dealers are scummy, 20 years of watching how multiple dealers in multiple locations have treated employees make it a known fact to me.

 

[Brovane]

Idiot.

I know what a monopoly is. It's why I used the term with these '.

Fern

What because I am supposed to know what ' means. Still doesn't answer the question how Tesla Motors is a Monopoly since it doesn't fit the definition.