Tesla Dealers about to be outlawed in Ohio

[TTQ B4U]

Look me up, I will get you a car.

 

Cool! I work up there just down the street. Will have to stop by.

[ImUrOBGYN]

lol

Ricart

 

Forbes:

"Yesterday, in a blow for capitalism and common sense, the Ohio House declined to attach the amendment to the bill. For the moment, Tesla is free to open dealerships there, but the battle isn’t done. The legislature wants to look at the issue in greater depth again next year.

 

But in Ohio, existing franchise law made that leap impossible. The only reason an anti-Tesla law was needed was because the company had no existing dealerships to compete with. GM, Ford, or Audi already couldn’t open a corporate-owned dealership in Ohio whether or not the new law passed. But that didn’t stop Rhett Ricart, owner of a dealership in Groveport, Ohio from hyperbolically declaring: “Tesla is Armageddon” and insisting the legislation was needed."

 

http://jalopnik.com/tesla-scores-win-against-car-dealers-in-ohio-as-amendme-1476300041

[buelliganx1]

lol

Ricart

 

Forbes:But that didn’t stop Rhett Ricart, owner of a dealership in Groveport, Ohio from hyperbolically declaring: “Tesla is Armageddon” and insisting the legislation was needed."

 

http://jalopnik.com/tesla-scores-win-against-car-dealers-in-ohio-as-amendme-1476300041

 

I'm not sure as to why Ricart would feel that Tesla is enough of a threat to his empire to make a stupid comment like this.

[greg1647545532]

I'm not sure as to why Ricart would feel that Tesla is enough of a threat to his empire to make a stupid comment like this.

 

It's not Tesla the car company that he's worried about, it's Tesla the crafty lobbying company. If Tesla is selling cars directly to consumers, then other small, struggling automakers like Saab or Volvo can make the same argument. And after Saab and Volvo it's BMW and Mercedes, and then VW and Toyota, and then Ford and GM, and Ricart is left to earn money from his vast used-car network and service and parts, the poor guy.

[Rustlestiltskin]

It's not Tesla the car company that he's worried about, it's Tesla the crafty lobbying company. If Tesla is selling cars directly to consumers, then other small, struggling automakers like Saab or Volvo can make the same argument. And after Saab and Volvo it's BMW and Mercedes, and then VW and Toyota, and then Ford and GM, and Ricart is left to earn money from his vast used-car network and service and parts, the poor guy.

 

Bingo.

[BigOxley]

It's not Tesla the car company that he's worried about, it's Tesla the crafty lobbying company. If Tesla is selling cars directly to consumers, then other small, struggling automakers like Saab or Volvo can make the same argument. And after Saab and Volvo it's BMW and Mercedes, and then VW and Toyota, and then Ford and GM, and Ricart is left to earn money from his vast used-car network and service and parts, the poor guy.

 

Girlfriend's whole family in the the car dealership business in Buffalo, NY. I mean whole family, grandfather started it, father and 5 uncles continue the business. I hope they see the writing on the wall if Tesla gets their way. They have started diversifying their investments into other fields...but the dealerships are the main focus.

 

The irony of their situation is that they are all pissed about the government regulation, especially in NY. Sounds like the government regulation is the only thing saving their collective asses from manufacturers selling direct.

[Draco-REX]

It's crazy how narrow-sighted people are. This is like Netflix vs Blockbuster all over again. There's a demand, and someone's going to fill it. Except this time, we can see the change coming MILES off. The change is coming whether you like it or not. See it, identify why it's coming, and then GET ON BOARD WITH IT. Find a way to make it work for you rather than against you, or get crushed by it.

 

Nothing stays the same forever; change is inevitable. I have no sympathy for businesses who sit passively by trying to hold back a tidal wave with pieces of paper and end up wondering what happened. If the recording industry had embraced Napster instead of fighting it, their profits would likely be double what they are now. If Blockbuster had embraced Netflix's business model and leveraged their established name, we'd be watching Blockbuster streaming on our mobile phones right now.

 

Practical and affordable electric cars are coming, and direct-sales are coming, and I have a feeling it'll happen nearly simultaneously. Dealerships, both big and small, will have to figure out how to turn this change into profit.

 

Tesla's Factory-to-Door model works for a low-prodcution model, but how does it, or how WOULD it scale to a production level like Ford? It's all fine and good to imagine buying a car online like a pair of shoes, but would that really work the way we think it would?

 

I can see things going a couple ways, with more or less support from the manufacturers. But ultimately, one thing that WILL have to happen, is the death of the shady dealership. The common practices that make people FEAR dealerships will have to be thrown out. The "dealership" will no longer be able to continue operating as a neccessary evil.

[RS69]

Since I now work for Tesla, I will let you know the outcome today. Store will open Saturday at Easton regardless!

 

Congratulations on your new venture. Brent was telling me about this the other day at work.

[LJ]

Girlfriend's whole family in the the car dealership business in Buffalo, NY. I mean whole family, grandfather started it, father and 5 uncles continue the business. I hope they see the writing on the wall if Tesla gets their way. They have started diversifying their investments into other fields...but the dealerships are the main focus.

 

The irony of their situation is that they are all pissed about the government regulation, especially in NY. Sounds like the government regulation is the only thing saving their collective asses from manufacturers selling direct.

 

Which dealership?

[BigOxley]

Which dealership?

 

Basil, I think they have 9 stores now.

[LJ]

Basil, I think they have 9 stores now.

 

Ah Dont know that one. My FIL is a manager for Emerling and my BIL is a master tech for West Herr

[Slomo Eric]

http://www.columbusunderground.com/tesla-opens-columbus-store-at-easton?utm_source=CU+Weekly+-+Dec+9+2013&utm_campaign=CU+Weekly+Dec+9+2013&utm_medium=email

 

http://www.teslamotors.com/eastontowncenter

[Trouble Maker]

Since I now work for Tesla, I will let you know the outcome today. Store will open Saturday at Easton regardless!

 

What are you doing there? Can't wait to stop by the store!

[Sledhead36]

I have been an owner for a few years, love the car and got bored, So I am in sales for Tesla. I am fortunate to be able to do something just for fun.

[Trouble Maker]

That's awesome, can't wait to stop in and check everything out!

[Bam]

Just noticed the sign the other day on my way to work, might stop by this week. You're just a short bit down the road. Are you guys going to do anything about the hill blocking the building?

[El Karacho1647545492]

It's crazy how narrow-sighted people are. This is like Netflix vs Blockbuster all over again. There's a demand, and someone's going to fill it. Except this time, we can see the change coming MILES off. The change is coming whether you like it or not. See it, identify why it's coming, and then GET ON BOARD WITH IT. Find a way to make it work for you rather than against you, or get crushed by it.

 

Nothing stays the same forever; change is inevitable. I have no sympathy for businesses who sit passively by trying to hold back a tidal wave with pieces of paper and end up wondering what happened. If the recording industry had embraced Napster instead of fighting it, their profits would likely be double what they are now. If Blockbuster had embraced Netflix's business model and leveraged their established name, we'd be watching Blockbuster streaming on our mobile phones right now.

 

Practical and affordable electric cars are coming, and direct-sales are coming, and I have a feeling it'll happen nearly simultaneously. Dealerships, both big and small, will have to figure out how to turn this change into profit.

 

Tesla's Factory-to-Door model works for a low-prodcution model, but how does it, or how WOULD it scale to a production level like Ford? It's all fine and good to imagine buying a car online like a pair of shoes, but would that really work the way we think it would?

 

I can see things going a couple ways, with more or less support from the manufacturers. But ultimately, one thing that WILL have to happen, is the death of the shady dealership. The common practices that make people FEAR dealerships will have to be thrown out. The "dealership" will no longer be able to continue operating as a neccessary evil.

 

This is one of the best assessments I've yet read.

 

As an employee at a traditional dealership that prides itself on not being a shady dealer, allow me to try to present the other side of the story with as little emotional influence as I can muster.

 

I, for one, would LOVE a dealership environment in which I'm compensated in the $60k-$80k range annually. For the amount of hours I put in and the level of expertise that I'm expected to have, I think that's fair. I could easily earn more as a commissioned employee, but I could also easily earn less in a bad year. Part of what I love about commissioned sales is the opportunity to out-perform my competitors, but I'll get to that in a minute.

 

Let's imagine that I am now a comfortably paid salaried employee at Al's Ford. As an employee, I'm expected to be knowledgeable, I'm expected to provide top notch service and support for my clients, and I'm expected to be a professional ambassador for both the brand and my dealership. All of these things are easy to do and currently the norm at a good dealership. They're a bit harder to come by at a shady dealer.

 

Now, as a good employee at a good dealer, I will try my utmost to meet customer needs, as I currently do. However, as a commissioned salesperson, I'm always looking for that next "up". I am hungry for anyone to come on the lot because that's an opportunity for me to make or not make money. When someone comes on the lot 15 minutes before close, I may be reluctant but I will always treat them the same as someone who comes in 15 minutes after we open because if I don't, I won't earn their business and that is above all the most important thing to me. As a salaried employee, I'm less likely to want to stay here til 10pm writing a deal. I'm less paranoid about losing a deal, because I know no one else in town is going to stay open late for one customer. Why? Because we're not insanely hungry for that one extra deal.

 

So your work schedule only allows for you to come super late during the week, and no one will stay open. That sucks, but oh well. You'll go in on Saturday. But wait, Al's Ford has cut their hours on weekends! You see, while a majority of customers come out to see cars on Saturday, there's little incentive to be open if you know no one will be around. So during the winter when it's dark at 4, we close at 4! "Rubbish!" you say, knowing that Tesla Easton is open until 10pm on Saturday. Well they're a mall location. They have traffic all day every day. Try buying a car on Saturday in Michigan. The closer a dealership is to an auto plant in MI, the more likely they're only open 4-5 hours on Saturday. And good luck getting service!

 

"Well," you think "surely the manufacturer will think of this and, as a result of these being factory stores, they will implement policies to ensure the customer has convenient hours in which to shop. We'll make sure the stores abide by high standards." And you're right, this very may well be the case. But nothing in this world comes free, and do you think that now that the factory has a vested interest in the costs associated with running a retail store that they'll be more concerned with the bottom line? The days of the service dept paying for the losses of the sales dept will disappear. Both must be profitable! No more $7k rebates off a new truck. No more "invoice less rebates" for everyone! Hell, I'd be surprised if MSRP doesn't turn into just RP, because the mfr will no longer be suggesting the retail pricing, they'll be setting it!

 

And then, from the fog of high-priced new cars with less-than-gung-ho salespeople, comes one dealership. That's all it takes. One dealership willing to whore all their cars out. They pay their salespeople commission because they want HUNGRY employees who want to work 6-7 days a week for the prospect of making 6 figures a year selling cars. They want salespeople who will stay all night writing up a deal that pays them a minimum commission just to get the one extra car to beat the factory store.

 

At the end of the day, the number 1 reason people do business with a particular dealer, brand, or car salesperson has nothing to do with the experience. I know this because people will spend hours, even multiple days, to try to save a few hundred dollars.

 

The dealership model of business did not appear overnight. Yes, it has been supported by painfully shady lobbying, but that is more to support the painfully shady dealers. The ONLY reason shady dealers still operate is because people usually go with the lowest price, and the shady dealers will often offer that at the expense of a superior buying experience.

 

I'm not suggesting that factory to door sales are bad, but after spending several years watching the average person's method of buying cars, it's simply not feasible for high-volume production cars. I welcome the change and will gladly be at the forefront of it, but I just want to present potential outcomes to those who think it a flawless system.

 

TL;DR Factory-to-buyer sales may not be all it's cracked up to be.

[greg1647545532]

For a lot of stuff you're describing, it doesn't matter who owns the dealership. If Ford took over Ricart's new car sales right now, they could keep the entire management chain in place, keep the entire sales staff in place with the exact same employment structure, keep the finance, accessories, undercoating, rust protection, and extended warranty people in place, annoying the piss out of their customers like always. Hell, Ford could just keep all of Ricart's profits as their own and keep prices exactly where they are, or even raise prices because they'd own all the dealerships. In that regard,you're exactly right; relaxing franchise laws isn't some magic panacea that will make the car buying experience a lot better.

 

It will improve some things, though, like the barrier to entry for niche brands. How did Fiat start selling cars in the US again? They bought Chrysler. Obviously there are other hurdles with federalization of European cars, but if you want to buy a Citroen or a Renault, good luck with that as long as those companies either have to front the cash for a massive franchise network or buy a struggling domestic automaker of their own.

 

Another area of improvement is controlling inventory. In the run-up to GM's bankruptcy, one of the things they complained about was their inability to shutter individual dealerships to match their falling market share, especially in urban areas where they often have 2 to 3 times as many dealers as the Japanese brands because those GM dealers were there long before Honda was selling cars here. Long after industry analysts had beat the "GM has too many goddamn brands" horse to death, GM had to keep Oldsmobile and Pontiac going because it took years to negotiate settlements with a dealer network that was unwilling to close down for the good of GM.

 

There's a lot of redundancy across dealerships that could be eliminated if Ford consolidated the 10 or so dealerships within an hour of here. It remains to be seen whether any of those savings would be passed on to the customer, but the current system has got to be woefully inefficient.

 

It'll be interesting to see how this all plays out.

Edited December 9, 2013 by greg

[El Karacho1647545492]

For a lot of stuff you're describing, it doesn't matter who owns the dealership. If Ford took over Ricart's new car sales right now, they could keep the entire management chain in place, keep the entire sales staff in place with the exact same employment structure, keep the finance, accessories, undercoating, rust protection, and extended warranty people in place, annoying the piss out of their customers like always. Hell, Ford could just keep all of Ricart's profits as their own and keep prices exactly where they are, or even raise prices because they'd own all the dealerships. In that regard,you're exactly right; relaxing franchise laws isn't some magic panacea that will make the car buying experience a lot better.

 

It will improve some things, though, like the barrier to entry for niche brands. How did Fiat start selling cars in the US again? They bought Chrysler. Obviously there are other hurdles with federalization of European cars, but if you want a buy a Citroen or a Renault, good like with that as long as those companies either have to front the cash for a massive franchise network or buy a struggling domestic automaker of their own.

 

Another area of improvement is controlling inventory. In the run-up to GM's bankruptcy, one of the things they complained about was their inability to shutter individual dealerships to match their falling market share, especially in urban areas where they often have 2 to 3 times as many dealers as the Japanese brands because those GM dealers were there long before Honda was selling cars here. Long after industry analysts had beat the "GM has too many goddamn brands" horse to death, GM had to keep Oldsmobile and Pontiac going because it took years to negotiate settlements with a dealer network that was unwilling to close down for the good of GM.

 

There's a lot of redundancy across dealerships that could be eliminated if Ford consolidated the 10 or so dealerships within an hour of here. It remains to be seen whether any of those savings would be passed on to the customer, but the current system has got to be woefully inefficient.

 

It'll be interesting to see how this all plays out.

 

You are very accurate in your assessment. FIAT's largest hurdle early on was establishing the dealer network. We didn't see any advertising dollars spent until over 150 dealers were open, and we were among the first 20 dealers open. It was not fun trying to sell cars with little to no corporate support. Now we've got an extremely saturated Ohio market and it's one of the best to buy a FIAT in.

[Sledhead36]

MAG, Germain and Ricart are trying to block us again.......asswipes.

http://www.bizjournals.com/columbus/news/2013/12/19/auto-dealers-launch-court-fight.html?ana=e_du_pub&s=article_du&ed=2013-12-19

[Mojoe]

This whole thing just comes across as desprate and greedy. Personnally, I don't care about the dealerships "big picture". Job's, profit, and all the other things attached to dealerships are due for a industry restructure, IMO. It would be nice if this was the start point and resulted in better product service and less middle man service. Best of luck Tesla.

 

EDIT:

 

So traditional dealerships are Pimp's. Now a Ho is making money on her own and the pimps are worried the other Ho's are going to start trying to do the same. Except there are rules the pimps are trying to go by so the Mob bosses are ok with it and get their cut. So, it's likely the mob will put a hit on the stray Ho to make a point, so no others try this.

 

Sounds about right.

[airwg2189]

MAG, Germain and Ricart are trying to block us again.......asswipes.

http://www.bizjournals.com/columbus/news/2013/12/19/auto-dealers-launch-court-fight.html?ana=e_du_pub&s=article_du&ed=2013-12-19

 

Anyone know who the other two dealerships are?

[Doc1647545523]

According to the article, THREE Germain dealerships, Ricart Ford, and MAG.

[airwg2189]

According to the article, THREE Germain dealerships, Ricart Ford, and MAG.

 

Ah, misread it as 'the' Germain dealerships.

 

Brb school

[Fiji ST]

MAG, Germain and Ricart are trying to block us again.......asswipes.

http://www.bizjournals.com/columbus/news/2013/12/19/auto-dealers-launch-court-fight.html?ana=e_du_pub&s=article_du&ed=2013-12-19

 

I'm surprised to hear that Germain is getting involved. The other two don't surprise me in the least.