Steal from the Best - Can the Auto Companies sell directly?

The laws in most states are written specifically to prevent the manufacturers from competing with their franchised dealers. When the laws were written, most dealers were family run businesses that sold only one brand of car. Most of those dealers have now gone the way of the family farm. Dealers are now mainly big business, often multi-state, and carry a number of car brands (even if they are in separate locations). The car manufacturers don't have the same power over them that they used to. If a manufacturer is too difficult, they just won't sell that brand--far different from when the manufacturer was the only source of cars for a single dealer.

The franchise laws are there to protect the dealers. I honestly DO believe that they serve a purpose in an existing market. I'd hate to think if I was a Chevy dealer for decades and, suddenly, *GM* opens a store next door. Now a *Tesla* store is a different story. There's no franchised dealer network selling teslas out there that you'd be undercutting.

"Way back when", the deal was GM saying "If you buy the franchise, we guarantee you a territory where YOU have EXCLUSIVE rights to sell Chevys".

They did NOT have the right or power to say "You have the exclusive right to sell CARS" - a Ford dealership could open up next door.

As long as the GM store doesn't undercut them in price it is pure competition for quality of service and experience. It would drive prices down.
Are these dealership contracts indefinite?

dsm363 said:

As long as the GM store doesn't undercut them in price it is pure competition for quality of service and experience. It would drive prices down.
Are these dealership contracts indefinite?

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I found this article from the Yale Law Journal from 1957 (!). These issues have been going on for a long time!

http://digitalcommons.law.yale.edu/cgi/viewcontent.cgi?article=3732&context=fss_papers