Largest auto dealer group OK with Tesla direct sales

TexasEV · Apr 17, 2014

I'm surprised I haven't seen this posted anywhere yet. Mike Jackson, the CEO of AutoNation which is the largest owner of auto dealerships, isn't opposed to Tesla selling direct:
AutoNation CEO Supports Tesla's Direct-Sales Model: Video - Bloomberg

Some of the best quotes:
"I'm a free enterprise guy, and there are no existing Tesla dealers to be harmed, so if he wants to launch his vehicle with a direct model, this is America, he should have the right to do that."
"He should have the right to sell his cars as he sees fit."
"I don't think that's any threat to the existing franchise system."
"It's only a few militant states that have very strong feelings."

dsm363 · Apr 17, 2014

Wow. That's fantastic and nice to see someone like that say what most people actually think.

EarlyAdopter · Apr 17, 2014

The guy is smart and forward thinking. He knows there's a chance Tesla might franchise once Gen 3 comes out at full volume, and I'm sure he'd be happy to be one.

AnOutsider · Apr 17, 2014

Didn't he also previously say something about wanting to sell Teslas? Or am I thinking of another chain?

MarkR · Apr 17, 2014

I believe that I'm correct that Auto Nation is the dealer network that Tesla selected as their trade-in partner for those who have ordered a new Tesla. They appear to have nicely positioned themselves with TM if/when TM wants to deal with a single entity with a national presence for new car sales.

TexasEV · Apr 18, 2014

MarkR said:
I believe that I'm correct that Auto Nation is the dealer network that Tesla selected as their trade-in partner for those who have ordered a new Tesla. They appear to have nicely positioned themselves with TM if/when TM wants to deal with a single entity with a national presence for new car sales.

Jim Appleton the NJ dealer assoc. guy called in during the show to suggest the trade-in relationship is the reason AutoNation doesn't oppose Tesla direct sales. Jackson blew it off saying something to the effect of that trade-in business is the size of a pimple on the body.

DriverOne · Apr 18, 2014

MarkR said:
I believe that I'm correct that Auto Nation is the dealer network that Tesla selected as their trade-in partner for those who have ordered a new Tesla.

I heard that was CarMax? (Varies by geography?)

ggr · Apr 19, 2014

DriverOne said:
I heard that was CarMax? (Varies by geography?)

No, the official deal is with AutoNation Direct, but many people (I might have been the first) found that CarMax gives a better deal.

K5ING · Apr 21, 2014

I'm glad he said that part about "there are no existing Tesla dealers to be harmed". I've been saying this all along. Ford or GM selling direct would harm existing dealers. Tesla has no existing dealers, so no one would be harmed if they sold direct. I would like to see the wording in the laws of these various states examined to see if there may be a loophole that addresses this. I also think that existing laws could be amended to allow direct selling provided there are no existing dealers for that product. That would not only allow direct sales by Tesla and others, but would still protect existing dealers. Win-win.

rlang59 · Apr 21, 2014

K5ING said:
I'm glad he said that part about "there are no existing Tesla dealers to be harmed". I've been saying this all along. Ford or GM selling direct would harm existing dealers. Tesla has no existing dealers, so no one would be harmed if they sold direct. I would like to see the wording in the laws of these various states examined to see if there may be a loophole that addresses this. I also think that existing laws could be amended to allow direct selling provided there are no existing dealers for that product. That would not only allow direct sales by Tesla and others, but would still protect existing dealers. Win-win.

Not for the consumer it's not. We shouldn't be forced to go through a middle man to buy a car, it is that simple. If the dealerships actually add value then they will be fine if not they will go away.

ItsNotAboutTheMoney · Apr 21, 2014

AutoNation are quite happy with Tesla's direct sales, because they are a generic car sales company that could actually gain significantly if the franchise system were removed. They'd always have used car sales (which is a bigger market than new) and as a large, high-volume specialist they'd be quite possibly be able to get deals with manufacturers for FM and trade-in. The current system helps protect a lot of inefficiency in smaller operations.

TexasEV · Apr 21, 2014

ItsNotAboutTheMoney said:
AutoNation are quite happy with Tesla's direct sales, because they are a generic car sales company that could actually gain significantly if the franchise system were removed. They'd always have used car sales (which is a bigger market than new) and as a large, high-volume specialist they'd be quite possibly be able to get deals with manufacturers for FM and trade-in. The current system helps protect a lot of inefficiency in smaller operations.

What do you mean by "generic car sales company"? AutoNation owns 267 new vehicle franchises, including Mercedes, BMW, Ford, Chevrolet, Toyota, and other dealerships. Some of the dealerships kept their original names so you wouldn't even know they were bought by Auto Nation, some have been renamed with Auto Nation included the the dealership name. Why is this different than any other group of dealerships who vigorously oppose direct sales by new manufacturers?

ItsNotAboutTheMoney · Apr 21, 2014

TexasEV said:
What do you mean by "generic car sales company"? AutoNation owns 267 new vehicle franchises, including Mercedes, BMW, Ford, Chevrolet, Toyota, and other dealerships. Some of the dealerships kept their original names so you wouldn't even know they were bought by Auto Nation, some have been renamed with Auto Nation included the the dealership name. Why is this different than any other group of dealerships who vigorously oppose direct sales by new manufacturers?

AutoNation's is the biggest car retailer in the country. They continue to acquire existing franchises and have added a number of new MB franchises. (No coincidence: the CEO is ex MB NA.) They started it Florida but are now in 15 states.

The national branding switch was made early last year. They'd tried to do that before, but abandoned it. The change again recognizes that the Internet is becoming a dominant force in car sales. In the mid 2000s AutoNation made a decision to shift focus away from the domestics and towards luxury import makes. They are more than a set of franchises.

If I'm reading AutoNation's approach and ambitions correctly
- AutoNation's eye is on growth and selling to the whole country, with particular focus on Internet retail.
- The franchise model is hindrance to company expansion since they have to obtain franchises state by state.
- Direct sales could allow manufacturers to bypass AutoNation, but AutoNation may see the possible of using their size to position themselves as automotive retail services and used car sales company.

EarlyAdopter · Apr 22, 2014

ItsNotAboutTheMoney said:
AutoNation's is the biggest car retailer in the country. They continue to acquire existing franchises and have added a number of new MB franchises. (No coincidence: the CEO is ex MB NA.) They started it Florida but are now in 15 states.

The national branding switch was made early last year. They'd tried to do that before, but abandoned it. The change again recognizes that the Internet is becoming a dominant force in car sales. In the mid 2000s AutoNation made a decision to shift focus away from the domestics and towards luxury import makes. They are more than a set of franchises.

If I'm reading AutoNation's approach and ambitions correctly
- AutoNation's eye is on growth and selling to the whole country, with particular focus on Internet retail.
- The franchise model is hindrance to company expansion since they have to obtain franchises state by state.
- Direct sales could allow manufacturers to bypass AutoNation, but AutoNation may see the possible of using their size to position themselves as automotive retail services and used car sales company.

Ah. So, while we're looking at things at a brick and motor point of view - Tesla is to Apple stores as car dealers are to Best Buy - Autonation is positioning itself to be the Amazon.com of car sales, to Apple's online store. Smart.

Great post. Thanks!

ItsNotAboutTheMoney · Apr 22, 2014

EarlyAdopter said:
Ah. So, while we're looking at things at a brick and motor point of view - Tesla is to Apple stores as car dealers are to Best Buy - Autonation is positioning itself to be the Amazon.com of car sales, to Apple's online store. Smart.

Great post. Thanks!

April 17th:
AutoNation stepping away from third-party leads

...and...

April 19th:
AutoNation envisions quick, easy buying at digital store

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Largest auto dealer group OK with Tesla direct sales

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