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> Dealerships should not exist and only exist due to terrible laws making it illegal for most automakers to sell direct. Dealerships exist because the automake
by dangrossman 2y ago
> Dealerships should not exist and only exist due to terrible laws making it illegal for most automakers to sell direct.
Dealerships exist because the automakers wanted them, and those laws exist due to the automakers' foul play.
Automakers want to make cars. They don't want to manage stores, deal with thousands of different municipalities' rules for selling and registering vehicles, repair vehicles they've already sold, or store millions of cars in inventory until they're sold. They let someone else do all that, and it lets them run their factories at a nice even pace with essentially guaranteed buyers for their output.
Automakers did, in the 1990s, start to get jealous of the money their dealerships were making on the back of their products. Ford and GM both opened factory stores competing directly with their own dealers. They knew just where to open those stores and what to sell at them, because they had full knowledge of where their successful dealers were, and what they were best at selling at those dealerships. The franchisees were taking all the risk in selecting sites and financing inventory just for their franchisor to swoop in and undercut their business with their own store next door.
That unfairness is what led the dealers to lobby for those state laws banning the automaker from competing with its own franchisees.
- deleted 2y ago[deleted]
- survirtual 2y agoUnfairness? It is completely fair. If the dealerships don't like it, they should learn advanced engineering and industrial manufacturing, and make their own cars. If they can't, then they should have been let to fail since they couldn't adapt.
- dangrossman 2y agoI don't understand how you can say that. If McDonalds opened a new restaurant next door to each of their highest grossing existing restaurants, and charged lower prices there, do you think that would be completely fair to the franchisees that spent millions of dollars building and operating those restaurants for McDonalds? Why would it ever be fair for a franchisor to act like that?
- survirtual 2y agoUnless the franchise has a contract with the franchisor that states non-compete, then it is not only fair but completely legal. A franchise had the capital to make their own restaurant but chose to be subservient to a franchisor instead. That's on them. Owning a business has great rewards, but is supposed to have great risk too. It is time we brought the risk back. Policy the is cut throat to business is good policy. Businesses should be ravenously competing, failing, and going bankrupt. There should be no bailouts. There should be no patents. It should be survival of the fittest -- as it is for the poorest of society.