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It's probably more accurate to say 'Whoever owns the numerically limited chokepoint will take the lion’s share of profit.' There are many car dealerships. Ther
by ethbro 7y ago
It's probably more accurate to say 'Whoever owns the numerically limited chokepoint will take the lion’s share of profit.'
There are many car dealerships. There are only a few car manufacturers. So the latter have forced the former into a bad deal.
- ghaff 7y agoI'm not sure it's a bad deal. New car dealership owners are often pretty successful and politically connected small local businessmen. It is generally true though that distribution isn't a business that the auto manufacturers wanted to be in at the time the current system developed. It's not a wildly profitable business to be in but, like other types of franchises, it's a decent enough living for many of the owners.
- pkAbstract 7y agoIt's not that they didn't want to be in the business, but that manufacturers couldn't scale their own dealerships across the country fast enough. So they opened up ownership to third parties. Tesla, however, was in the unique position of having enough capital to open their own dealerships, which has caused a lot of friction with more traditional, "family-owned" dealerships.