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Tesla passes on the 2016 Detroit Auto Show

December 4, 2015 Leave a comment

TeslaI really admire the Tesla car company and concept. Build an electric, high performance car with real world usability and normal (to me) design. No weird/comical, bulbous/door-wedge shaped eggs, but strong cutting edge design that looks great, and with a range that someone who doesn’t live within walking distance of everything can use.

Elon Musk also seems to be an incredibly smart, driven guy with a strong sense of the way things should be and stands up to those who think otherwise. Which brings me to the tie in with the title…

From today’s Detroit Free Press: “Tesla currently sees little need to drum up business in Michigan, a state that forbids direct vehicle sales under franchise laws that require sales to go through a dealership. Tesla officials continue to lobby for the right to sell and deliver vehicles directly to customers.”

For the record, I fully support the fight that Tesla is going through to be able to sell cars directly to consumers and love that they’re standing up to states that have these indefensible ‘dealer only’ laws on the books.  I can’t think of any other commodity that a consumer isn’t allowed to buy directly from the manufacturer than motor vehicles.

From the state’s (IE. the auto dealer association lobby’s) perspective, having to use a dealer supposedly helps the consumer protect their purchase through having an advocate who can fight for them with the manufacturer in case anything goes wrong, and is specially trained to repair their brand of vehicle. But what I think it really does is unfairly protect a slow to adapt, outdated business model at the expense of consumers. What other product can you not buy on the internet? Sure, there are more progressive auto dealers out there using the latest technologies, but even they are hand-cuffed by the franchise laws that are there to ‘protect’ them.

State and Federal laws, and the laws of economics, protect consumers from bad manufacturers: If a company sells you something and it fails to deliver on its quality or warranty, they get in legal trouble and word gets out about how awful they or their products are. Bad performance has a way of weeding out bad companies.

In my opinion, dealer franchise laws simply exist to protect dealers from having to truly compete for their sales. Their territories are protected from other dealers selling the same brand, so they don’t have to worry about competitors popping up next door with better service, pricing, whatever, and even internet leads are given to them due to location of their dealership in relation to the customer, not the customers preference or dealer pricing or reputation.

If auto manufacturers were really interested in protecting consumers and improving the businesses in the state, they would make them have to compete for our business.

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