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"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." I don't see

"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." I don't see why 1 company couldn't maintain that many locations. Walmart has 10,857 stores[1]. Over 4,000 in the U.S. and over 6,000 internationally. I would argue that maintaining a single Walmart store is more difficult than maintaining a dealership and yet they're able to make it happen. [1]http://stock.walmart.com/financial-reporting/unit-counts-square-footage http://stock.walmart.com/financial-reporting/unit-counts-squ...

hkmurakami 13y ago
exactly. If dealers are profitable today, then an auto company running the whole show can be just as profitable if not moreso.
Maven911 13y ago
And WalMart's core strenghs are store management and discounting, while auto manufacturer's core competency is to build and market cars, not to deliver and operate dealerships. Walmart also has an army (2 million strong) of people working for them, most of whom are working near minimum wage
- ams6110 13y ago
  Exactly what I wanted to say. WalMart doesn't make any of the products they sell. They can focus on making money selling stuff, and manufacturers can focus on making money making stuff. I could see Tesla one day letting a company like Amazon sell the cars and handle the logistics of delivering them to the customer.
- MichaelApproved 13y ago
  My point was to show that it's possible for a company to handle massive infrastructure with thousands of locations (dealerships). If you want to talk about core business competency, that's another issue. I don't think it's a leap to think a car manufacturer could also have a division that sells the vehicles.
chaz 13y ago
Currently, the dealers buy the vehicle from the manufacturer, so the manufacturer isn't holding onto large amounts of inventory. I suppose it's possible to restructure the business to operate in a way that can take on the large inventory and long turnover, but probably not the current companies in their current forms.
- MichaelApproved 13y ago
  "probably not the current companies in their current forms." Changing the current company models, in their current forms, is exactly what Tesla is trying to do.

hkmurakami 13y ago

exactly. If dealers are profitable today, then an auto company running the whole show can be just as profitable if not moreso.

Maven911 13y ago

And WalMart's core strenghs are store management and discounting, while auto manufacturer's core competency is to build and market cars, not to deliver and operate dealerships. Walmart also has an army (2 million strong) of people working for them, most of whom are working near minimum wage

ams6110 13y ago
Exactly what I wanted to say. WalMart doesn't make any of the products they sell. They can focus on making money selling stuff, and manufacturers can focus on making money making stuff. I could see Tesla one day letting a company like Amazon sell the cars and handle the logistics of delivering them to the customer.
MichaelApproved 13y ago
My point was to show that it's possible for a company to handle massive infrastructure with thousands of locations (dealerships). If you want to talk about core business competency, that's another issue. I don't think it's a leap to think a car manufacturer could also have a division that sells the vehicles.

chaz 13y ago

Currently, the dealers buy the vehicle from the manufacturer, so the manufacturer isn't holding onto large amounts of inventory. I suppose it's possible to restructure the business to operate in a way that can take on the large inventory and long turnover, but probably not the current companies in their current forms.

MichaelApproved 13y ago
"probably not the current companies in their current forms." Changing the current company models, in their current forms, is exactly what Tesla is trying to do.