My friend +John Voelcker does some good old fashioned journalism on the battle between… 5


My friend +John Voelcker does some good old fashioned journalism on the battle between +Tesla Motors and independent car dealers. 

My favorite line from Tim W. Jackson, president, Colorado Automobile Dealers Association on what would happen if Tesla went belly up: "If that were to happen, and consumers were left high and dry without a place to have their Tesla cars serviced, he said, it would do great damage to the good reputation of all auto dealers."

I suspect a large proportion of the people that have ever purchased a new car might take exception to the idea that car dealers have a good reputation. 

Unfortunately car dealers have a disproportionate voice in state politics and I think it's foolish for politicians to legislate against new business models before we get a chance to see if there is some good that come out of them. 

Auto Dealers’ Fight Against Tesla Stores: Elon Musk Weighs In
Tesla Motors is facing a formidable opponent it may not have sufficiently appreciated: the auto dealers of America, and their state associations. Tesla, you may remember, is selling its electric cars …

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5 thoughts on “My friend +John Voelcker does some good old fashioned journalism on the battle between…

  • Jason Honingford

    That's fine, but I disagree. It sounds like the dealer is trying to find a reason to exist. There are plenty of service companies that can service a car, usually costing less money. Isn't Ford shifting their service to Quicklane? If manufacturers stopped using mega-dealerships, it would be a huge benefit to the consumer and small business.

  • Sam Abuelsamid

    I don't disagree Jason, existing dealers are trying to retain something of a monopoly position when it comes sales and service. 

    As for mega dealerships, those were the creation of dealers, not the manufacturers. However, given the success of those dealers, manufacturers are encouraging consolidation. The Detroit automakers still find themselves in position with too many dealers in many regions even after the 2009 bankruptcies (a holdover from the time when they dominated the US market and reinforced by franchise laws). As a result the competition drives down transaction prices, residual values and profits for the dealers and the automakers. The foreign automakers never built up such a large network in the first place so dealers get more sales per capita and make more money.