Now, more than four years after the first Tesla store opened in Santa Monica, CA, traditional dealers are realizing that the EV startup might be around for a while and they aren't happy about Tesla's retail strategy. Over the past century, dealer groups have influenced state legislatures to strengthen franchise laws that make it nearly impossible for automakers to compete directly with established dealers.
Tesla had an out because it had no existing dealers to compete with, but now dealers are concerned that other automakers might follow Tesla's path and eventually undermine the franchise system.
Frankly, I'm not sure that's such a bad thing. As the business environment changes, automakers like other companies need the flexibility to shift strategies.As we saw during the 2008-9 meltdown, having too many dealers makes it a lot tougher for automakers to make money but franchise laws make it near impossible to shrink the retail footprint to match sales.
What do you think?
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