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Car dealerships make a profit based off of information disparities. What value do they add in today's world?

• sliverstorm 13y ago
  Off the top of my head, - Place to window-shop and test-drive many different cars - Place to get your vehicle serviced by manufacturer-trained techs - Place to get TSB's, recalls, etc performed How much the second point matters does vary, depending on the quality of your local independent shops and your vehicle. Some vehicles are dirt simple, some are really weird & complicated. Case-in-point; would you rather have Joe's Gasoline Imports work on your Tesla, or Johnstown Tesla? I'm not in love with dealers, but it's frustrating to see people writing off the whole notion altogether, pretending they will be better off if the only access to Tesla is a mail-order catalogue.
  • wmf 13y ago
    Nobody's talking about a world with no dealers, just whether they can be owned by the manufacturer or not.
    • Crito 13y ago
      Exactly. The only reason dealers might disappear in a world where manufactures are permitted to sell directly to the consumer is that dealers do not actually offer any advantages that consumers actually value. If dealers provide such a necessary service, then they won't be in any trouble. That they think they are in trouble is really them saying all that you need to know about them.
  • malokai 13y ago
    > pretending they will be better off if the only access to Tesla is a mail-order catalogue. Except Tesla is available outside a mail-order catalog via Tesla-owned distributorships.
  • fancyketchup 13y ago
    Ok, so if dealerships provide a valuable service, then why are they so worried about allowing manufacturers to sell directly? If those things you identified are truly important, then manufacturers will end up paying for them one way or the other (i.e., directly or by allowing dealerships to take a cut of car sales). If dealerships are an efficient way of providing those services, then why in the world would manufacturers abandon this existing network of service providers? Now, maybe it is the case that the current dealership model is the best way to deliver those services to customers. Maybe having factory-owned service centers leads to poor customer service. But won't the market figure that out? > I'm not in love with dealers, but it's frustrating to see people writing off the whole notion altogether, pretending they will be better off if the only access to Tesla is a mail-order catalogue. This is an interesting straw-man. In normal states, Tesla is allowed to set up fixed-location service centers and "car stores" in malls. Potential customers can take cars on test drives and a salesperson walks the customer through the purchase process. Even in Texas, Tesla has showrooms and a limited ability to set up mass test-drive dates. What Tesla is trying to do (but being prevented from doing by silly laws) is make sure that customers don't "only access to Tesla is a mail-order catalogue." I don't understand why it should be illegal for the manufacturer to provide the services you listed, except through a third party. Nobody is suggesting that a car manufacturer shouldn't be allowed to have a network of third-party dealers, just that car manufacturers should be allowed the option of running sales and service directly.
    • sliverstorm 13y ago
      This is an interesting straw-man It's not a straw-man, it's exactly what I hear some people saying they want.