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Not really related to the article, but this is from Cadillac's website: To address concerns related to dealership sales department closures and social distanci

Not really related to the article, but this is from Cadillac's website: To address concerns related to dealership sales department closures and social distancing, Cadillac is offering virtual tours of its products via Cadillac Live and promoting its “Shop. Click. Drive.” online shopping, purchase and delivery program. Wasn't this the very thing the automakers were against when Tesla came up with it?

Etheryte 7y ago
For most, business is not about being consistent or logical, it's about being profitable.
notfromhere 7y ago
Automakers aren’t against them selling direct, dealers are. And it’s illegal for automakers to do so because automakers tried to kill dealers earlier on and take over the sales channels dealers built out. Plus for communities, it’s more beneficial than they’re locally owned versus all of the money flowing out.
- ComputerGuru 7y ago
  Only net profit to the owner flows out of the community. The money going to employees at the branch/showroom (which would still be retained, as they serve a purpose regardless of who runs them) is still retained in the community. Given how many auto dealerships are franchises owned by out-of-town individuals or groups, it’s already the case anyway.
- hedora 7y ago
  I don’t buy the idea that dealerships benefit communities. If they simply charged sales tax based on the address of the purchaser, it would be more equitable. The current law creates local dealership monopolies, and the dealerships provide terrible service, and rip everyone off as a result. If you don’t like it, you have to drive dozens of miles to go to a competitor (and car purchases invariably involve multiple trips). Cities want the sales tax revenue, so they give the dealerships huge tax breaks to attract them. The whole system should be scrapped.
  - reaperducer 7y ago
    I don’t buy the idea that dealerships benefit communities. It's a method of spreading the wealth. The model increases the number of people employed and businesses involved, both directly and indirectly, exponentially.
    - gruez 7y ago
      You're not wrong, but there are far better ways to redistribute wealth than mandating the use of rent-seeking middlemen. Why not levy a tax directly and cut out the middle man?
      - renewiltord 7y ago
        Because the step past that of using the tax to redistribute is politically infeasible. It's like "Why not get rid of tipping and just give waiters a tax benefit?". Well, turns out we can't do the second piece so that's why we don't do the first piece.
        AnthonyMouse 7y ago
        If the purpose of dealership laws is redistribution then to get dealership laws you need enough public support for it to pass a law, in which case it might as well be the good law instead of the garbage one. Moreover, this is exactly the sort of thing where the bad is the enemy of the good. If redistribution is good and cronyism is bad then allowing the cronyist redistribution law to pass not only placates the people who want redistribution (and so they fight less for the better one), it also inflames the good should-be-allies anti-cronyists and requires you to waste political capital on infighting. Bad compromises are bad. Good law > nothing > bad law.
        renewiltord 7y ago
        Usually when you do things like this, you package it in a defensible way. So maybe you decide you want some redistribution, but that's politically infeasible. Instead you package it as something else. Another example is most big infrastructure projects in California. You'll notice that most don't finish in time. The real reason is to ensure that there is sustainable construction work going on. They're capable of finishing fast but no one wants that. They just want a large number of people employed. The Trojan Horse is "we're building infrastructure" because otherwise you have to fight the anti-redistribution anti-subsidy people. That's because when a concession is made to people they rarely will fight to make it perfect in the name of perfect is the enemy of good enough. Anti-cronyists don't expend political effort because they don't have upper-level political support. It's not a thing anyone needs to worry about. Only people who want to get something concrete and people in danger of losing something concrete expend political effort.
- guntars 7y ago
  It would be more beneficial for communities to not pay the "dealer tax". Why do we need to support a group of people whose job can largely be done by an app these days?
  - toomuchtodo 7y ago
    Having bought several Tesla vehicles from Tesla, all requiring back and forths with local service due to manufacturing issues, their process leaves much to be desired (both purchase and servicing). “Largely done by an app” is not an accurate representation of the problem space.
    - drdeadringer 7y ago
      What is "the problem space" here then?
    - taftster 7y ago
      So that's a justification for the "dealer tax"? That the process is not "largely done by an app"? Seems to me that if the process cannot be streamlined by an app, that the process is wrong. Growing pains for this industry, I get it. But it shouldn't really be any harder than what an 'app' can provide. Give me a few model options, click 'Buy'.
      - toomuchtodo 7y ago
        I’m not saying the dealer tax is warranted (absolutely not), I’m saying it’s still a lot of human effort even if you streamline the process with an app (financing, tax, title, licensing, vehicle defect issues, etc). Tesla totally botched my first Model S purchase and I was stuck for two days out of state while they fixed my purchase contract and my financing. This was after having bought through their website. Just as high touch enterprise sales is here to stay, so is a human in the loop for auto purchases. You are not the average consumer if you’re here. Your average consumer will not tolerate rough edges of an app when spending $37k.
        7y ago
- cma 7y ago
  > Plus for communities, it’s more beneficial than they’re locally owned versus all of the money flowing out. It means a new concentrated powerful special interest in their local area can outbid them, in their diffuse helplessness, in influencing politics.
  - notfromhere 7y ago
    Do you prefer a concentrated powerful special interest that’s in a HQ far away instead?
    - cma 7y ago
      I just mean for their local politics. It is basically creating an artificial "big man" in the community.
voodooranger 7y ago
i don’t know what the automakers’ stance was or is but i believe the organizations that have fought direct sales have been the national and state dealership associations.
SQueeeeeL 7y ago
No, you could always look at cars online, what auto makers didn't like about Tesla was their lack of dealerships. The auto sellers regulatory captured a bunch of states decades ago; and now you can't buy cars directly from the manufacturer. If another electric vehicle player tried to get in the game today, I'm sure Tesla join the lobby against them using the same argument.
- reaperducer 7y ago
  The auto sellers regulatory captured a bunch of states decades ago No. It wasn't regulatory capture. It was about competition. The same thing happened in the United States with movie theaters, television production, alcohol distribution, etc... There's a reason that bars aren't owned by breweries anymore. There's a reason that movie theaters aren't owned by the production companies anymore. "Reglatory capture" is a fun HN buzzword, but if you study history, you know why things are done.
  - SQueeeeeL 7y ago
    Regulatory capture is special interest groups in charge of regulating themselves. Of course private movie theaters are the ones who sponsored the bills saying production housing can't own movie theaters, it'd be bad for their business to have to compete and not have access to all movies. Regulatory capture can be sensible and still massively benefit special interests.
    - tzs 7y ago
      > Of course private movie theaters are the ones who sponsored the bills saying production housing can't own movie theaters, it'd be bad for their business to have to compete and not have access to all movies. It was an antitrust lawsuit by the government in 1938 that brought this about, not legislation.
- bpodgursky 7y ago
  > If another electric vehicle player tried to get in the game today, I'm sure Tesla join the lobby against them using the same argument. I think it's pretty unfair to be "sure" of this. Can you name other instances where Tesla has played regulatory capture games?
cosmie 7y ago
Cadillac (and other auto manufacturers) structure their program to include dealerships, rather than to cut them out. The sale gets booked against and delivered by a local dealership, rather than Cadillac the manufacturer. Tesla does not have an independent franchise/dealership model, and all of their local presence is corporate owned. This is what all the automakers have been against, as there are a rats nest of local/state laws that require legacy automakers to not compete with/cut out their dealerships with direct-to-consumer sales, but Tesla has avoided that impediment by resisting having to adopt the sales framework the legacy manufacturers can't legally get out of. That said, manufacturers would love to be able to adopt Tesla's model; dealers are the ones that hate it as it's an existential threat. Manufacturers are only against Tesla's model to the extent that they're not legally allowed to adopt it, so consider it an unfair advantage.
- bluGill 7y ago
  I'm not sure if the manufacturers are against it. It is complex. Dealers are the human face of the company. Someone to talk to in your town if things go wrong. Assurance that there is a mechanic that can fix it if something breaks (not just the engine, there are many other parts that can breaks. Assurance someone will be able to get the parts you need. That doesn't means they have to like the dealer model, but there are real advantages to it.
  - Tuna-Fish 7y ago
    All those advantages could be provided by the car company owning all the dealerships that sell their cars, except it would be cheaper for both the car company and customer.
    - s1artibartfast 7y ago
      Why do you assume it would be any cheaper for the customer? I think it could actually increase prices by reducing the number of sellers in the market. You would have a single retailer for each brand.
wnevets 7y ago
No, that was the dealerships

Etheryte 7y ago

For most, business is not about being consistent or logical, it's about being profitable.

notfromhere 7y ago

Automakers aren’t against them selling direct, dealers are. And it’s illegal for automakers to do so because automakers tried to kill dealers earlier on and take over the sales channels dealers built out. Plus for communities, it’s more beneficial than they’re locally owned versus all of the money flowing out.

ComputerGuru 7y ago
Only net profit to the owner flows out of the community. The money going to employees at the branch/showroom (which would still be retained, as they serve a purpose regardless of who runs them) is still retained in the community. Given how many auto dealerships are franchises owned by out-of-town individuals or groups, it’s already the case anyway.
hedora 7y ago
I don’t buy the idea that dealerships benefit communities. If they simply charged sales tax based on the address of the purchaser, it would be more equitable. The current law creates local dealership monopolies, and the dealerships provide terrible service, and rip everyone off as a result. If you don’t like it, you have to drive dozens of miles to go to a competitor (and car purchases invariably involve multiple trips). Cities want the sales tax revenue, so they give the dealerships huge tax breaks to attract them. The whole system should be scrapped.
- reaperducer 7y ago
  I don’t buy the idea that dealerships benefit communities. It's a method of spreading the wealth. The model increases the number of people employed and businesses involved, both directly and indirectly, exponentially.
  - gruez 7y ago
    You're not wrong, but there are far better ways to redistribute wealth than mandating the use of rent-seeking middlemen. Why not levy a tax directly and cut out the middle man?
    - renewiltord 7y ago
      Because the step past that of using the tax to redistribute is politically infeasible. It's like "Why not get rid of tipping and just give waiters a tax benefit?". Well, turns out we can't do the second piece so that's why we don't do the first piece.
      - AnthonyMouse 7y ago
        If the purpose of dealership laws is redistribution then to get dealership laws you need enough public support for it to pass a law, in which case it might as well be the good law instead of the garbage one. Moreover, this is exactly the sort of thing where the bad is the enemy of the good. If redistribution is good and cronyism is bad then allowing the cronyist redistribution law to pass not only placates the people who want redistribution (and so they fight less for the better one), it also inflames the good should-be-allies anti-cronyists and requires you to waste political capital on infighting. Bad compromises are bad. Good law > nothing > bad law.
        renewiltord 7y ago
        Usually when you do things like this, you package it in a defensible way. So maybe you decide you want some redistribution, but that's politically infeasible. Instead you package it as something else. Another example is most big infrastructure projects in California. You'll notice that most don't finish in time. The real reason is to ensure that there is sustainable construction work going on. They're capable of finishing fast but no one wants that. They just want a large number of people employed. The Trojan Horse is "we're building infrastructure" because otherwise you have to fight the anti-redistribution anti-subsidy people. That's because when a concession is made to people they rarely will fight to make it perfect in the name of perfect is the enemy of good enough. Anti-cronyists don't expend political effort because they don't have upper-level political support. It's not a thing anyone needs to worry about. Only people who want to get something concrete and people in danger of losing something concrete expend political effort.
guntars 7y ago
It would be more beneficial for communities to not pay the "dealer tax". Why do we need to support a group of people whose job can largely be done by an app these days?
- toomuchtodo 7y ago
  Having bought several Tesla vehicles from Tesla, all requiring back and forths with local service due to manufacturing issues, their process leaves much to be desired (both purchase and servicing). “Largely done by an app” is not an accurate representation of the problem space.
  - drdeadringer 7y ago
    What is "the problem space" here then?
  - taftster 7y ago
    So that's a justification for the "dealer tax"? That the process is not "largely done by an app"? Seems to me that if the process cannot be streamlined by an app, that the process is wrong. Growing pains for this industry, I get it. But it shouldn't really be any harder than what an 'app' can provide. Give me a few model options, click 'Buy'.
    - toomuchtodo 7y ago
      I’m not saying the dealer tax is warranted (absolutely not), I’m saying it’s still a lot of human effort even if you streamline the process with an app (financing, tax, title, licensing, vehicle defect issues, etc). Tesla totally botched my first Model S purchase and I was stuck for two days out of state while they fixed my purchase contract and my financing. This was after having bought through their website. Just as high touch enterprise sales is here to stay, so is a human in the loop for auto purchases. You are not the average consumer if you’re here. Your average consumer will not tolerate rough edges of an app when spending $37k.
      - 7y ago
cma 7y ago
> Plus for communities, it’s more beneficial than they’re locally owned versus all of the money flowing out. It means a new concentrated powerful special interest in their local area can outbid them, in their diffuse helplessness, in influencing politics.
- notfromhere 7y ago
  Do you prefer a concentrated powerful special interest that’s in a HQ far away instead?
  - cma 7y ago
    I just mean for their local politics. It is basically creating an artificial "big man" in the community.

voodooranger 7y ago

i don’t know what the automakers’ stance was or is but i believe the organizations that have fought direct sales have been the national and state dealership associations.

SQueeeeeL 7y ago

No, you could always look at cars online, what auto makers didn't like about Tesla was their lack of dealerships. The auto sellers regulatory captured a bunch of states decades ago; and now you can't buy cars directly from the manufacturer. If another electric vehicle player tried to get in the game today, I'm sure Tesla join the lobby against them using the same argument.

reaperducer 7y ago
The auto sellers regulatory captured a bunch of states decades ago No. It wasn't regulatory capture. It was about competition. The same thing happened in the United States with movie theaters, television production, alcohol distribution, etc... There's a reason that bars aren't owned by breweries anymore. There's a reason that movie theaters aren't owned by the production companies anymore. "Reglatory capture" is a fun HN buzzword, but if you study history, you know why things are done.
- SQueeeeeL 7y ago
  Regulatory capture is special interest groups in charge of regulating themselves. Of course private movie theaters are the ones who sponsored the bills saying production housing can't own movie theaters, it'd be bad for their business to have to compete and not have access to all movies. Regulatory capture can be sensible and still massively benefit special interests.
  - tzs 7y ago
    > Of course private movie theaters are the ones who sponsored the bills saying production housing can't own movie theaters, it'd be bad for their business to have to compete and not have access to all movies. It was an antitrust lawsuit by the government in 1938 that brought this about, not legislation.
bpodgursky 7y ago
> If another electric vehicle player tried to get in the game today, I'm sure Tesla join the lobby against them using the same argument. I think it's pretty unfair to be "sure" of this. Can you name other instances where Tesla has played regulatory capture games?

cosmie 7y ago

Cadillac (and other auto manufacturers) structure their program to include dealerships, rather than to cut them out. The sale gets booked against and delivered by a local dealership, rather than Cadillac the manufacturer. Tesla does not have an independent franchise/dealership model, and all of their local presence is corporate owned. This is what all the automakers have been against, as there are a rats nest of local/state laws that require legacy automakers to not compete with/cut out their dealerships with direct-to-consumer sales, but Tesla has avoided that impediment by resisting having to adopt the sales framework the legacy manufacturers can't legally get out of. That said, manufacturers would love to be able to adopt Tesla's model; dealers are the ones that hate it as it's an existential threat. Manufacturers are only against Tesla's model to the extent that they're not legally allowed to adopt it, so consider it an unfair advantage.

bluGill 7y ago
I'm not sure if the manufacturers are against it. It is complex. Dealers are the human face of the company. Someone to talk to in your town if things go wrong. Assurance that there is a mechanic that can fix it if something breaks (not just the engine, there are many other parts that can breaks. Assurance someone will be able to get the parts you need. That doesn't means they have to like the dealer model, but there are real advantages to it.
- Tuna-Fish 7y ago
  All those advantages could be provided by the car company owning all the dealerships that sell their cars, except it would be cheaper for both the car company and customer.
  - s1artibartfast 7y ago
    Why do you assume it would be any cheaper for the customer? I think it could actually increase prices by reducing the number of sellers in the market. You would have a single retailer for each brand.

wnevets 7y ago

No, that was the dealerships