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The dealers can grasp for whatever reasons they want, but I have no sympathy whatsoever. They're rent-seekers, pure and simple, with no value add at all. Half t

by venus 13y ago

The dealers can grasp for whatever reasons they want, but I have no sympathy whatsoever. They're rent-seekers, pure and simple, with no value add at all. Half the time they don't even have stock! > "Buying an iPad is not buying a car," says David Hyatt of the national association Well, it should be.

samstave 13y ago
EXACTLY. Far too many people are trying to cling to the old method of purchasing a car as if it is something that was efficient, cost effective and transparent. Car dealers can go rust in hell. What do I want - I want to customize my car online and buy it for a known price and have it exactly as I expected to cost. I also want to never put another penny toward gasoline purchases. Period.
- toomuchtodo 13y ago
  What you described is exactly how I bought my Model S. I will never go back to buying a car from a dealership. Ever.
  - galaktor 13y ago
    Here we have what I suspect is the real reason dealerships are scared.
- ams6110 13y ago
  GM sort of tested this approach with Saturn. Custom ordering online wasn't a reality then, but the no-haggle pricing and a generous (30 day?) no-questions-asked return policy were part of their approach, initially. Consumers generally liked the Saturn buying experience.
btian 13y ago
Can't upvote this enough. I'm so sick of the constant haggling needed to get a good price on a car, getting quotes from a dozen dealers, and all the trouble with dealers during service. Looking forward to the day when consumer gets the same best price from manufacturer owned stores everywhere.
- hkmurakami 13y ago
  This also puts the universe of consumers on a level playing field. No longer will the loudest, most ruthless negotiator customers get the best deals. Such equality would be a welcome change.
bradly 13y ago
What's funny about this is in San Diego guess where the Telsa dealership/store is? In the local mall, right across from the Apple store. There are always a ton of people in there looking at the car (yep, a "dealership" with just one car). I think it's great and gets a ton of people familiar with their product that otherwise wouldn't be.
- hkmurakami 13y ago
  That's a terrific place to set up Tesla showrooms. Apple has done all the legwork in figuring out where their target demograhic is, and Tesla can piggyback on it, like what Taco Bell does vs McDonalds. (considerable overlap between Apple customers and potential Tesla customers)
- nathantotten 13y ago
  Same thing in Bellevue, WA. I would argue though that it isn't about malls with Apple stores, but rather it is about Malls with high-income shoppers of which both Apple and Tesla want to be in.
fjk 13y ago
> They're rent-seekers, pure and simple, with no value add at all. Half the time they don't even have stock! That's a major oversimplification. Car dealers can provide a lot of value to individuals looking to purchase a vehicle, both at the time of purchase and after the fact via test drives, financing, and discounts for future maintenance at their service centers. There are plenty of shady car salesmen that take advantage of vulnerable people, but that should not negate the benefits that many dealerships provide. The stock issue is tricky, as many local dealers can't afford to carry a wide range of models and configurations. Stopping by the local dealership looking to buy a specific model vehicle same-day may result in disappointment. However, dealerships are very good about acquiring a vehicle that you are interested in purchasing. All you need to do is ask. That being said, I agree with you that buying a car should be more similar to buying an iPad than it currently is. There are ludicrous laws that stifle innovation in the vehicle purchasing process, such as the Massachusetts Franchise law 93B[1] that prohibits manufacturers from owning dealerships. I think Tesla's vision[2] for first party dealerships and vehicle distribution is a step in the right direction. [1] http://www.malegislature.gov/Laws/GeneralLaws/PartI/TitleXV/Chapter93B http://www.malegislature.gov/Laws/GeneralLaws/PartI/TitleXV/... [2] http://www.teslamotors.com/nl_NL/blog/tesla-approach-distributing-and-servicing-cars http://www.teslamotors.com/nl_NL/blog/tesla-approach-distrib...
- notatoad 13y ago
  "Car dealers can provide a lot of value to individuals looking to purchase a vehicle, both at the time of purchase and after the fact via test drives, financing, and discounts for future maintenance at their service center." none of those things are exclusive to dealers for any reason other than the law requires it. a manufacturer-owned store could provide the same (or better) service in all cases. they add no value above and beyond what a first-party dealership would provide.
- revelation 13y ago
  If you think they create value, then why not have the market validate that? It's the same issue over and over. Just because you did work does not mean it is worth anything.
chaz 13y ago
> They're rent-seekers, pure and simple, with no value add at all. Half the time they don't even have stock! This isn't true. While dealers are slimy and have miles to go, there's still a consumer need to (a) a place to see/touch/drive a vehicle and (b) go in for service and repairs. You can't simply fix this with manufacturer-owned stores because the capital cost is so high. Major manufacturers like Ford and GM have over 3,000 dealers in the US. Maintaining that kind of network is something that dealers can't afford. Tesla only has a few dozen service centers right now, and they're centered around high-population urban areas with wealthy customers. I'd like to see franchise laws change to encourage competition in the space, but I think we still need dealers in some form or another.
- revelation 13y ago
  Tesla is exactly doing that. If you think that is a guaranteed failure, I take it you are short on their stock? Because obviously we need not institute new laws if basic economic reasoning can bring about the change.
  - chaz 13y ago
    > Tesla is exactly doing that. If you think that is a guaranteed failure, I take it you are short on their stock? Relax, no need for accusations or jumping to conclusions. I think Tesla will be a terrific company and I look forward to owning one someday. I just don't think it's reasonable to assume that just because Tesla can do it, everyone else can and should do it the same way. If you were Alan Mulally, CEO of Ford, would you do exactly what Tesla is doing? Would you close the 3k franchised dealerships and install manufacturer-owned ones instead? How would you finance that much real estate, inventory, and employees? Or would you close down a large portion of the dealers and go with fewer? How would you service the millions of Fords sold every year?
    - ams6110 13y ago
      There's also no reason to think Tesla will always operate this way. At some point, if they continue to grow, it is no longer practical to own and operate all the sales and service facilities.

by venus 13y ago

samstave 13y ago

EXACTLY. Far too many people are trying to cling to the old method of purchasing a car as if it is something that was efficient, cost effective and transparent. Car dealers can go rust in hell. What do I want - I want to customize my car online and buy it for a known price and have it exactly as I expected to cost. I also want to never put another penny toward gasoline purchases. Period.

toomuchtodo 13y ago
What you described is exactly how I bought my Model S. I will never go back to buying a car from a dealership. Ever.
- galaktor 13y ago
  Here we have what I suspect is the real reason dealerships are scared.
ams6110 13y ago
GM sort of tested this approach with Saturn. Custom ordering online wasn't a reality then, but the no-haggle pricing and a generous (30 day?) no-questions-asked return policy were part of their approach, initially. Consumers generally liked the Saturn buying experience.

btian 13y ago

Can't upvote this enough. I'm so sick of the constant haggling needed to get a good price on a car, getting quotes from a dozen dealers, and all the trouble with dealers during service. Looking forward to the day when consumer gets the same best price from manufacturer owned stores everywhere.

hkmurakami 13y ago
This also puts the universe of consumers on a level playing field. No longer will the loudest, most ruthless negotiator customers get the best deals. Such equality would be a welcome change.

bradly 13y ago

What's funny about this is in San Diego guess where the Telsa dealership/store is? In the local mall, right across from the Apple store. There are always a ton of people in there looking at the car (yep, a "dealership" with just one car). I think it's great and gets a ton of people familiar with their product that otherwise wouldn't be.

hkmurakami 13y ago
That's a terrific place to set up Tesla showrooms. Apple has done all the legwork in figuring out where their target demograhic is, and Tesla can piggyback on it, like what Taco Bell does vs McDonalds. (considerable overlap between Apple customers and potential Tesla customers)
nathantotten 13y ago
Same thing in Bellevue, WA. I would argue though that it isn't about malls with Apple stores, but rather it is about Malls with high-income shoppers of which both Apple and Tesla want to be in.

fjk 13y ago

> They're rent-seekers, pure and simple, with no value add at all. Half the time they don't even have stock! That's a major oversimplification. Car dealers can provide a lot of value to individuals looking to purchase a vehicle, both at the time of purchase and after the fact via test drives, financing, and discounts for future maintenance at their service centers. There are plenty of shady car salesmen that take advantage of vulnerable people, but that should not negate the benefits that many dealerships provide. The stock issue is tricky, as many local dealers can't afford to carry a wide range of models and configurations. Stopping by the local dealership looking to buy a specific model vehicle same-day may result in disappointment. However, dealerships are very good about acquiring a vehicle that you are interested in purchasing. All you need to do is ask. That being said, I agree with you that buying a car should be more similar to buying an iPad than it currently is. There are ludicrous laws that stifle innovation in the vehicle purchasing process, such as the Massachusetts Franchise law 93B[1] that prohibits manufacturers from owning dealerships. I think Tesla's vision[2] for first party dealerships and vehicle distribution is a step in the right direction. [1] http://www.malegislature.gov/Laws/GeneralLaws/PartI/TitleXV/Chapter93B http://www.malegislature.gov/Laws/GeneralLaws/PartI/TitleXV/... [2] http://www.teslamotors.com/nl_NL/blog/tesla-approach-distributing-and-servicing-cars http://www.teslamotors.com/nl_NL/blog/tesla-approach-distrib...

notatoad 13y ago
"Car dealers can provide a lot of value to individuals looking to purchase a vehicle, both at the time of purchase and after the fact via test drives, financing, and discounts for future maintenance at their service center." none of those things are exclusive to dealers for any reason other than the law requires it. a manufacturer-owned store could provide the same (or better) service in all cases. they add no value above and beyond what a first-party dealership would provide.
revelation 13y ago
If you think they create value, then why not have the market validate that? It's the same issue over and over. Just because you did work does not mean it is worth anything.

chaz 13y ago

> They're rent-seekers, pure and simple, with no value add at all. Half the time they don't even have stock! This isn't true. While dealers are slimy and have miles to go, there's still a consumer need to (a) a place to see/touch/drive a vehicle and (b) go in for service and repairs. You can't simply fix this with manufacturer-owned stores because the capital cost is so high. Major manufacturers like Ford and GM have over 3,000 dealers in the US. Maintaining that kind of network is something that dealers can't afford. Tesla only has a few dozen service centers right now, and they're centered around high-population urban areas with wealthy customers. I'd like to see franchise laws change to encourage competition in the space, but I think we still need dealers in some form or another.

revelation 13y ago
Tesla is exactly doing that. If you think that is a guaranteed failure, I take it you are short on their stock? Because obviously we need not institute new laws if basic economic reasoning can bring about the change.
- chaz 13y ago
  > Tesla is exactly doing that. If you think that is a guaranteed failure, I take it you are short on their stock? Relax, no need for accusations or jumping to conclusions. I think Tesla will be a terrific company and I look forward to owning one someday. I just don't think it's reasonable to assume that just because Tesla can do it, everyone else can and should do it the same way. If you were Alan Mulally, CEO of Ford, would you do exactly what Tesla is doing? Would you close the 3k franchised dealerships and install manufacturer-owned ones instead? How would you finance that much real estate, inventory, and employees? Or would you close down a large portion of the dealers and go with fewer? How would you service the millions of Fords sold every year?
  - ams6110 13y ago
    There's also no reason to think Tesla will always operate this way. At some point, if they continue to grow, it is no longer practical to own and operate all the sales and service facilities.