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> McDonalds doesn't need any arrangement like that because nobody's interested in mail-ordering cheeseburgers from them Mail-order isn't the issue. McDonalds

> McDonalds doesn't need any arrangement like that because nobody's interested in mail-ordering cheeseburgers from them Mail-order isn't the issue. McDonalds can own their own restaurants right now if they want to, instead of franchising. This is similar to how Tesla wants to operate. > If the manufacturers sell direct-to-consumer, then they can always undercut dealerships...there will be no profit in buying new vehicles to resell on a lot. There either won't be "new car" dealerships anymore, or they'll essentially become showrooms earning a small commission referring orders to the manufacturer. Good? If they can't add value and only exist because a law creates a cartel, then good riddance. If they actually add value, I'm sure we'll see that represented by people choosing to buy through dealers anyway. > The dealers have no contracts prohibiting manufacturers from selling direct-to-consumer, and they have no leverage to get them to sign such contracts. If they have no leverage, why is it acceptable to force them via the law? They could draw up fair contracts where both parties are happy and if they aren't they can walk away from it. It sounds like you are saying it's unfair because the dealers don't have to worry about the value they add to the manufacturers. You readily admit that the current arrangement is inefficient.

deleted 13y ago
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- darkarmani 13y ago
  > I answered your question of why the status quo cannot be enforced by contract instead of by industry-specific law; the status quo only exists because of those laws. That wasn't my question. My question was why contracts cannot enforce this kind of behavior instead of heavy handed law, not if the parties would agree to those contracts. The fact that you think the parties would not willingly enter into this kind of contract makes it obvious to me that it is heavy-handed. > If you prefer a country where everyone operates like Tesla -- your nearest service center is a state and a half away That's a much more cynically view of dealerships than even i portrayed. Are you suggesting dealerships offer absolutely no value to customers and wouldn't have a sustainable business without the gov't protecting them? It almost sounds like you've come across a business idea in the event of a post-dealership-apocalypse world.
- revelation 13y ago
  Apart from a few cities, the nearest service center is a state and a half away. If you don't like the staff/service there, your next option is shipping your car two states away when it needs work. There are few enough car manufacturers that none of them will build out significantly more company-owned service centers than the others; you won't be able to "vote with your dollars" on better coverage now that an expansive dealer network can't be counted on for OEM service. Dealers, right now, make a lot of money on service. Why the hell would manufacturers, in an alternative world where dealers are no longer protected by laws, skip out on that profit? There are also lots of independent auto workshops that never had anything to do with selling brand new cars. Manufacturers can't count on bulk sales to dealers of each year's new models, so there's higher risk of a model not ramping up production fast enough to become profitable, and of the entire company going out of business in a recession. Well yes, theres an inherent risk in running a business. Who knew. Dealerships will be much smaller, no longer having to stock and earning a profit from new car sales; hundreds of thousands of jobs will gradually disappear. But new cars will get cheaper. Jobs for the sake of "jobs" are not sane economic policy and will eventually be to the loss of everyone. Comparison shopping gets much harder -- you won't be test-driving new and used cars of different makes on the same lot anymore. You probably won't be able to test-drive a new car and drive that car home the same day anymore either. Why the hell not? Tesla offers testdrives, and you can even buy a car right now if they happen to have an orphaned one at a service center. They are still production constrained right now so thats obviously not how they can sell cars this very moment. Other manufacturers can offer this easily.

deleted 13y ago

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darkarmani 13y ago
> I answered your question of why the status quo cannot be enforced by contract instead of by industry-specific law; the status quo only exists because of those laws. That wasn't my question. My question was why contracts cannot enforce this kind of behavior instead of heavy handed law, not if the parties would agree to those contracts. The fact that you think the parties would not willingly enter into this kind of contract makes it obvious to me that it is heavy-handed. > If you prefer a country where everyone operates like Tesla -- your nearest service center is a state and a half away That's a much more cynically view of dealerships than even i portrayed. Are you suggesting dealerships offer absolutely no value to customers and wouldn't have a sustainable business without the gov't protecting them? It almost sounds like you've come across a business idea in the event of a post-dealership-apocalypse world.
revelation 13y ago
Apart from a few cities, the nearest service center is a state and a half away. If you don't like the staff/service there, your next option is shipping your car two states away when it needs work. There are few enough car manufacturers that none of them will build out significantly more company-owned service centers than the others; you won't be able to "vote with your dollars" on better coverage now that an expansive dealer network can't be counted on for OEM service. Dealers, right now, make a lot of money on service. Why the hell would manufacturers, in an alternative world where dealers are no longer protected by laws, skip out on that profit? There are also lots of independent auto workshops that never had anything to do with selling brand new cars. Manufacturers can't count on bulk sales to dealers of each year's new models, so there's higher risk of a model not ramping up production fast enough to become profitable, and of the entire company going out of business in a recession. Well yes, theres an inherent risk in running a business. Who knew. Dealerships will be much smaller, no longer having to stock and earning a profit from new car sales; hundreds of thousands of jobs will gradually disappear. But new cars will get cheaper. Jobs for the sake of "jobs" are not sane economic policy and will eventually be to the loss of everyone. Comparison shopping gets much harder -- you won't be test-driving new and used cars of different makes on the same lot anymore. You probably won't be able to test-drive a new car and drive that car home the same day anymore either. Why the hell not? Tesla offers testdrives, and you can even buy a car right now if they happen to have an orphaned one at a service center. They are still production constrained right now so thats obviously not how they can sell cars this very moment. Other manufacturers can offer this easily.