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Early on 'dealers' would set up shop and build up the market for a particular car brand. In many cases the manufacturers would see which markets were 'best' and

Early on 'dealers' would set up shop and build up the market for a particular car brand. In many cases the manufacturers would see which markets were 'best' and then setup their own sales floor directly competing with the car dealers. They could easily undercut the dealers and drive them out of business. The law was designed to protect the dealers from the manufacturers. We are seeing it more and more now in many markets and niches as manufactures are cutting out dealers that built the markets and selling 'direct to consumer'. The difference is that most manufacturers saw what happened to the car companies and are trying to carefully avoid having the same thing happen to them.

ericmay 5y ago
Yea but this works, what, once? And now the manufacturer has to deal with the things the dealer was doing like customer service, hiring sales staff, training technicians, etc. “Oh don’t open a Chevy dealership, in 6 months they’ll come in and undercut you”. And then there it is. Either you don’t open a dealership (fine) or the manufacturer builds a reputation for not undercutting dealers (also fine). IMO the law was protecting special interests from the start. This is an example of poorly regulating capitalism.
- PostThisTooFast 5y ago
  Yes, I would think this as well. If your company is known for dicking over your dealers, then no one will open up a dealership for you. Then again, Apple dicks its partners over and hasn't suffered much.
  - HelixEndeavor 5y ago
    Not really comparable in situation nor scale. There are Apple stores but they don't really compete with the big box stores that sell Apple products. Though I would be interested in seeing data on where most Apple products are purchased from.
- megablast 5y ago
  No. They wait a few years, dealerships are everywhere, then move in and take the most profitable regions.
  - HelixEndeavor 5y ago
    When did they do this?
- maxerickson 5y ago
  Dealers have franchise contracts with the manufacturers that provide some short term protection, I'm pretty sure the story of the laws is that once dealers were organized enough to lobby they asked governments to make laws protecting their businesses from their suppliers, not that governments saw the burning need for dealers and decided to protect them from this one narrow case.
HelixEndeavor 5y ago
You say "early on" but... Are there any actual cases of this strategy being executed by a manufacturer at any time in history? If so, I guess I'll have to eat my words, but it just really sounds like a hypothetical scenario the dealerships would have cooked up to try and push these laws that massively benefit them.

ericmay 5y ago

Yea but this works, what, once? And now the manufacturer has to deal with the things the dealer was doing like customer service, hiring sales staff, training technicians, etc. “Oh don’t open a Chevy dealership, in 6 months they’ll come in and undercut you”. And then there it is. Either you don’t open a dealership (fine) or the manufacturer builds a reputation for not undercutting dealers (also fine). IMO the law was protecting special interests from the start. This is an example of poorly regulating capitalism.

PostThisTooFast 5y ago
Yes, I would think this as well. If your company is known for dicking over your dealers, then no one will open up a dealership for you. Then again, Apple dicks its partners over and hasn't suffered much.
- HelixEndeavor 5y ago
  Not really comparable in situation nor scale. There are Apple stores but they don't really compete with the big box stores that sell Apple products. Though I would be interested in seeing data on where most Apple products are purchased from.
megablast 5y ago
No. They wait a few years, dealerships are everywhere, then move in and take the most profitable regions.
- HelixEndeavor 5y ago
  When did they do this?
maxerickson 5y ago
Dealers have franchise contracts with the manufacturers that provide some short term protection, I'm pretty sure the story of the laws is that once dealers were organized enough to lobby they asked governments to make laws protecting their businesses from their suppliers, not that governments saw the burning need for dealers and decided to protect them from this one narrow case.

HelixEndeavor 5y ago

You say "early on" but... Are there any actual cases of this strategy being executed by a manufacturer at any time in history? If so, I guess I'll have to eat my words, but it just really sounds like a hypothetical scenario the dealerships would have cooked up to try and push these laws that massively benefit them.