AutoNation, online auto sales and the end of dealership protectionism

jhm · Nov 26, 2014

AutoNation Takes A Page From Tesla's Playbook, Promises Online Sales In 2015

I'm not sure what to file this under, so here's a thread for discussing how Tesla is disrupting the dealership model.

The CEO of AutoNation has been a vocal supporter of allowing Tesla to skirt around franchise laws and sell directly online. Now we see one reason why. AutoNation would like to sell cars online, completely online. I expect many consumers are ready for this. And if AutoNation is successful, other companies will want to do the same. Moreover, consumers may begin to exert some influence on the politics of protecting dealers from competition. So basically, I am enthusiast about AutoNation taking this step and hastening the end of dealer protectionism.

So perhaps it would be good to have a thread to keep tabs on this.

ItsNotAboutTheMoney · Nov 26, 2014

jhm said:
AutoNation Takes A Page From Tesla's Playbook, Promises Online Sales In 2015

I'm not sure what to file this under, so here's a thread for discussing how Tesla is disrupting the dealership model.

The CEO of AutoNation has been a vocal supporter of allowing Tesla to skirt around franchise laws and sell directly online. Now we see one reason why. AutoNation would like to sell cars online, completely online. I expect many consumers are ready for this. And if AutoNation is successful, other companies will want to do the same. Moreover, consumers may begin to exert some influence on the politics of protecting dealers from competition. So basically, I am enthusiast about AutoNation taking this step and hastening the end of dealer protectionism.

So perhaps it would be good to have a thread to keep tabs on this.

I thought something like this would be coming, as this is their 2nd try at unified branding.

New car franchises have a limited marketing area, but they can sell to anyone. Used car companies can market and sell to anyone. So AutoNation can market used car sales nationally (a-la CarMax), market new cars sales locally, but build national New Car presence through familiarity and word of mouth. Then, gradually build up trust and expertise in interstate sales and, voila, you have yourself a de facto national new car chain.

Will be very interesting.

jhm · Nov 26, 2014

Here's AutoNation CEO Mike Jackson calling dealership protectionism hypocritical on free enterprise grounds. A little self-serving perhaps, but you get where he's coming from.

Why AutoNation CEO Jackson calls dealer fight with Tesla hypocritical - LA Times

jhm · Dec 4, 2014

Another dealer is pursuing online sales model, gets called the Tesla of Dealers. Dealer Chains May Still Hate Tesla, But Now They're Learning From It

jhm · Feb 1, 2015

Dealers challenged by smartphone car buyers

Half of millenials are buying cars on smartphones. Not a surprise, but it does put a cramp in the local monopoly dealership model.

I expect that as competiton is freer in the used car space , we may see these efficiency gains first among used cars. This would be particularly good for Tesla. Tesla aims to be quite competive with used cars. The dealership model with haggling for prices undermines resale value. But if Tesla wins on used cars, it will have no problem commanding whatever price it wants for new cars.

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AutoNation, online auto sales and the end of dealership protectionism

jhm

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ItsNotAboutTheMoney

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jhm

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jhm

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jhm

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