We're not the only ones who call the auto dealers a cartel. The Wall Street Journal uses the term "auto dealer cartel" in this headline:
John Kerr: Tesla Breaks the Auto Dealer Cartel - WSJ
John Kerr: Tesla Breaks the Auto Dealer Cartel - WSJ
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Tesla wins a major victory over the auto-dealer cartel - NASDAQ.com
Similar topic, I thought it was worth the read.
"Auto dealers remain true Tesla believers"! Neat.
I agree the latter statement is true, but it's not due to the former necessarily.if the dealers thought Tesla would remain an aberration, a niche entrant, they wouldn't care about fighting Tesla's business model. But they see a different future, where Tesla rewrites the rules of the automotive industry and leaves them in the dust.
Let me give you an example. If I make hats with the Tesla logo on them, Tesla will fight me on it -- because, as I understand it, the laws around brand protection require them to do so.
Whether or not Tesla succeeds, the "advertising of a different model" is something they must fight against inherently as a form of self-preservation. Tesla's success makes it more urgent, but the need is there regardless.
I agree but I don't think the dealers do... yet.Tesla needs to be fought because they have a better product and business model all around, not because they are breaking any laws or infringing on copyright.
I agree but I don't think the dealers do... yet.
... Tesla needs to be fought because they have a better product and business model all around, not because they are breaking any laws or infringing on copyright.
I agree with the overall sentiment of this statement, that the underlying issue is the threat to the dealership model. Having said that, though, there are states where the law specifically prevents manufacturers from operating a sales location regardless of whether they have existing franchisees in that state. Michigan is one good example. In other locations, the law is vague or in conflict with other statutes (NJ has been put forth as an example). In those locations, Tesla has to fight the battle in the legislature rather than the courthouse.
In both the New Jersey and Missouri cases this was brought up by dealerships as a reason that Tesla Motors' method of sales 'had to be stopped', but I think it was rather disingenuous. That's why the provision for Tesla to sell in New Jersey was limited to electric car companies that had already been granted dealer licenses prior to January of this year. That way, they can bar Chinese, Korean, or even Eastern European companies of traditional automobiles from bringing a new marque to these shores without using 'independent franchised dealerships'. It is a solution to a problem that does not exist and is unlikely to materialize.I continue to think that the real issue the dealers are concerned about is Chinese auto manufacturers.
I think some Chinese brands already sell in the US. They avoid the specific regulations for 'independent franchised dealerships' by selling only business-to-business for fleets or leasing on contract to municipalities. Those are basically small trucks, buses, and light utility vehicles instead of passenger cars, for the most part. They are low volume and are largely ignored.Like Tesla, they have no dealerships so when they enter the US they will be able to build their own direct sales model to keep their already low costs low.
As much as I'd love to see Pontiac, Saturn, Eagle, Plymouth, or Mercury reappear as companies that offer Supercharger compatible fully electric vehicles sold direct over the internet, I'm pretty sure that General Motors, Chrysler, and Ford would all be sued beyond all recognition by NADA and their individual state affiliates if they were to try it. They would use similar misinformation tactics and claim that by starting a new company and not giving dealerships an opportunity to partake, or at least the first right of refusal, they were illegally competing. The contents of franchise contracts are not known in their entirety, but it is presumed that they would be individually binding, even if the franchise laws that back them up were to evaporate.Existing car manufacturers should also be concerned I'd think unless they plan to set up their own "independent" car companies to do the same.
I believe that Tesla Motors wants to avoid bringing a court case themselves for as long as possible. So far, every time a dealership association has actually taken them to court, the dealers have lost, because they have not a leg to stand on. Further, each time that dealership association have attempted to have harsher legislation passed that would specifically bar Tesla, they have been informed that the original laws were poorly written and tenuous at best, and that their proposed updates would be outright unconstitutional even if they were passed. That's why Tesla has so far been granted at least limited access to present their wares and exemptions from the franchise laws. Dealers have been forced to realize that if they really push the issue, they will end up invalidating their own position, and should probably just give in to Tesla, allowing them at least partial access to the market.In those locations, Tesla has to fight the battle in the legislature rather than the courthouse.