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Will Elon Musk fold under the pressure and cooperate with the dealer network when they offer to sell at low to no markup to bring him into the extortion racket
by maeon3 13y ago
Will Elon Musk fold under the pressure and cooperate with the dealer network when they offer to sell at low to no markup to bring him into the extortion racket of Car Dealers?
I loathe buying cars so much because of the snakes that run those Dealerships. They want the car buying process to be so excruciatingly painful so people will leave money on the table to "Just take my money and make the pain go away".
How far are Dealers willing to go to make it illegal for Tesla to sell cars anywhere? Would they go so far as to outlaw the production of Tesla vehicles in America because it goes against the Dealer protection racket?
- gnoway 13y agoI don't see how this will stand up if Tesla chooses to fight it. I don't think the laws were intended to guarantee the extension of the dealership model to entirely new manufacturers. The laws were intended to protect dealers from having the manufacturer come in and undercut them after they were established in the market. On the other hand, I think the dealership model exists for a reason. There's a racket aspect to it, but would a Ford or GM really want to manage customer sales and showrooms all over the US?
- bdclimber14 13y agoTo your latter point, it's certainly possible. You could replace "Ford or GM" with a large 90s computer manufacturer, e.g. HP, but Apple eventually decided they wanted to via Apple stores.
- gnoway 13y agoI don't know that Apple is a good model. They have high volume of relatively inexpensive gadgets that they've managed to convince people should not last very long. The lifetime and service expectations of a car are completely different. If I bought a car and the battery went dead, and the manufacturer's solution was 'ship it to us and we'll send you a replacement in x days' that would be a unacceptable. Likewise, people aren't going to put up with streamlining support by saying stuff like 'no you can't replace your battery, if the car dies you just buy a new one.' My experience with the HPs of the world is on the business purchase side, but I've never bought 'from HP'. I could initiate the conversation with HP, but they always hooked me up with a solution vendor or whatever were calling a dealer at the time. Same w/ Cisco, Dell, IBM, EMC, Microsoft etc.
- rubinelli 13y agoI'm not convinced. When I had to do anything more serious than basic maintenance, the answer has frequently been "we'll order a replacement part, it should arrive in x days."
- ckrailo 13y agoAssuming you have an Apple Store nearby, the dead battery issue is dropping off your laptop at the store, going to lunch, and then picking up the repaired product. Dealerships are more like Geek Squad.
- mayneack 13y ago> On the other hand, I think the dealership model exists for a reason. There's a racket aspect to it, but would a Ford or GM really want to manage customer sales and showrooms all over the US? Yeah, that's a great reason for the dealerships to exist, but not one for them to have some sort of legally protected chunk of the market.
- notdrunkatall 13y agoIf they don't want to manage them, they won't.
- msluyter 13y agoThey want the car buying process to be so excruciatingly painful so people will leave money on the table to "Just take my money and make the pain go away". Well, this is why I bought my last car used from Carmax. Sure, you probably spend more than you you might spend if you were willing to go to a dealer and haggle, but I found it to be worth the premium.
- recursive 13y agoIs that sarcasm or cognitive dissonance?
- rthomas6 13y agoI don't understand this unless you have absolutely zero tolerance for negotiating a price. Why could I not simply print out a Carmax price of a used car in which I'm interested, then take it to any other used car dealer with a comparable car? "Can you beat this price?" "Yes." --> I just beat the Carmax price. "No." --> I leave with my money (this one won't happen).
- nknighthb 13y agoCar dealers are genetically incapable of giving such a direct answer. You can either deal with their evasive swindling and haggle anyway, or just assume the answer is "no".
- nickpinkston 13y agoIf you can't haggle for a better priced car, have fun trying to close real deals / acquisitions...
- nknighthb 13y agoNot everyone does such things, and I'm sure among those that do, you'll find many who don't care to waste hours with used car slimesmen to save a few pennies.
- mtgx 13y agoI don't think he will, and I hope he won't. But Elon tends to be a guy who thinks very long term, and I think he knows the future for Tesla would be much better if they sold their own cars, and never depended on the dealers again. Plus, it's not like he's in a bad position with Tesla right now, and he's desperate.
- beat 13y agoIf he was going to cave, he'd have caved already. There's nothing in it for Tesla now. The whole attempt to force Tesla into the existing supply chain model, at ZERO demonstrable benefit to consumers, looks bad politically. No politician will want to be seen publicly defending the dealers.
- jlgreco 13y ago> No politician will want to be seen publicly defending the dealers. Defending "local small business owners" on the other hand...
- blhack 13y agoGo to carmax. full disclosure: I work in the automotive industry. (Although not for them)
- toomuchtodo 13y agoI'm going to second this. I've bought two Jeeps, two Corvettes, a Buick, a Camry Hybrid, an Infiniti G37, and my wife's Lexus CT200h from Carmax (over ~12 years). The experience has always been extremely pleasant. I hate to haggle. Hate it. Carmax is awesome if you're looking for a used car.
- philhippus 13y agoI understand the aversion to haggling but, consider that it is one of the most economic uses of your time. If you haggle for 10 minutes and get $50 off, you are working at a rate of $300 per hour for the duration of the haggle. Not money to be sniffed at by any measure.
- toomuchtodo 13y agoYou know how long I had to haggle at a shady Toyota dealership to get my brother his Yaris? 4 hours. 4 HOURS. Haggling does not take 10 minutes at a car dealership once you get to a certain point in the process. I make enough money that I can throw it away on not haggling for a car. Carmax can keep whatever I left on the table by not dealing with a douchebag car dealership.
- philhippus 13y agoHow much did you get off? If you got anything over $1000 then that 4 hours was time well spent. There's a good chance you don't make $250 per hour at your normal job, you're the exception if you do.
- lacksconfidence 13y agoRich people spend thousands of dollars on private planes just so they don't have to deal with the BS flying commercial. Dealing with a car sales person is no more fun than going through airport security, i happily pay a premium to not deal with those people.
- yaliceme 13y agoPlanet Money did a great podcast on the history and political power of the dealer system, and why buying a car sucks so much - http://www.npr.org/blogs/money/2013/02/19/172402376/why-buying-a-car-never-changes http://www.npr.org/blogs/money/2013/02/19/172402376/why-buyi...
- revelation 13y agoThis story was recounted in a yesterday article on the topic: "I sat down in Palo Alto with Elon Musk, hat in hand, and said we want to partner with you, you can have it exactly as you want it — 'Tesla of Austin,' " said Wolters of the Texas dealers association. "You can do it just as you want to, within our law, you just can't own the showroom." Musk, Wolters recalled, didn't cotton to the suggestion, leaving the room quickly, but not before pledging to spend an inordinate amount of money to battle automobile franchise laws.
- toomuchtodo 13y agoBringing another billion dollars into the company? Loading up on ammunition. http://online.wsj.com/article/SB10001424127887324767004578488891523483094.html http://online.wsj.com/article/SB1000142412788732476700457848...