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Could someone explain to a European, in simple words, how the franchise-dealer-factory thing works? If a dealer is the company who actually sales cars and the
by atmosx 13y ago
Could someone explain to a European, in simple words, how the franchise-dealer-factory thing works?
If a dealer is the company who actually sales cars and the factory is the one that produces them, why do they need a franchise in between? And how come that a dealer is comparable to a manufacturer Tesla? Why do they have conflict of interests selling non-gasoline cars?!
- softbuilder 13y agoIt's not a franchise in between. The terminology makes it more confusing than it should be. The dealers buy franchise rights (right to sell that product) from the manufacturers, becoming "franchisees" - franchise owners. So my local Chevy dealership has a franchise from GM. Typically they also have rights to perform service and are certified for repairs on various brands.
- atmosx 13y agothanks, clearer now. :-)
- ghaff 13y agoA dealer IS a franchisee. They've been given a franchise by the manufacturer to sell (and service and offer financing for) cars in exchange for meeting a variety of conditions. A similar model is followed for many types of chains, such as restaurants. So the dealer is a middleman that performs various tasks that the manufacturer would otherwise have to do themselves. US auto manufacturers originally went with this approach to avoid many of the costs associated with selling direct (and generally setting up their own manufacturer-owned dealerships).
- atmosx 13y agoty :-)