Tesla Dealers about to be outlawed in Ohio

[Mr. Jones]

Wow, that is disappointing.

There is no need to act like children, in fact, it makes people lose some respect for said dealers. If people want one, they will buy one regardless, who cares what business model they decide on.

[Draco-REX]

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.

 

...

 

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!

Much the same as other products today. There's no haggling in retail, and that's how things may turn out. Perhaps with a no-haggle market pricing MSRP will start to look more like what people are getting now.

 

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.

No argument here. It's surprising how many hoops some people will jump through just to get a deal on a $20 purchase, let alone a $20,000 purchase. But I think those people are not the majority. I believe most people would prefer a more retail-like shopping experience. And factory stores could deliver that better than any traditional dealership.

 

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.

This is why I think Factory stores are inevitable.

 

Every dealership now has their own inventory. They have to keep a supply of fast-selling cars on-hand, plus a display inventory. But unlike a retail store that also has on-hand inventory, a dealership's product may not move for months. Ford has to be able to supply all these dealerships with full inventories every year. It's a massive production roll-out that they then have to balance with customer orders and continuing production of the bulk inventory.

 

Now imagine if they could warehouse the cars. Dealerships would only have to be supplied with display models and a flatbed or two. Customers could buy their car and have it delivered to them in an hour or two. Ford could simplify production as they'd only have to fill out maybe 50%-60% of the inventories they have to now. Small-production models could get greenlit because they wouldn't have to supply a massive number of inventories and there would be more production availability in the plants. Special orders could be completed faster as well.

 

The factory dealership model is a win for the manufacturers as well. And they have a lot more money to throw around than the dealerships. Tesla has already shown that the model works; that genie is already out of the bottle and no amount of lobbying is going to put it back.

 

Will we end up with a car salesman that's just another retail employee? Very possible. Though I think the future car salesman will probably be more like one you see at a Verizon store. Somewhat knowledgeable and commissioned, so not much different from today's car salesman. The big difference is that if MSRP becomes RP, there will less need for a salesman that can wheel and deal, and more for one that makes the customer want to buy now.

 

Incentives, rebates, etc., a.k.a. Sales, are going nowhere. If anything I think they will become more important because people will see the sales are actually coming off the price rather than getting buried in the number-juggling.

 

So the big question here is, how can Ricart profit from all of this?

 

It will probably be somewhere in a franchise model with set prices and manufacturer promotions along with an on-demand inventory model that puts the new MY ramp-up costs and year-end overstock losses on the manufacturer's shoulders.

[El Karacho1647545492]

The big difference is that if MSRP becomes RP, there will less need for a salesman that can wheel and deal, and more for one that makes the customer want to buy now.

 

I think you just hit on a key component that I'd not really considered.

 

People generally don't like to be pushed into a decision, but for many people if there's no pressure one way or another a decision will never be made. I think the belief that leaving a dime on the table is tantamount to robbery is why people so vehemently hate the pressure salespeople apply. Take away the negotiable pricing and the pressure becomes more about the other things; the experience, the "salesperson", etc.

 

You may be onto something. That's how I try to be as a salesperson which is why I'm not worried about the Tesla model of sales.

[Gergwheel1647545492]

http://www.dispatch.com/content/stories/business/2014/02/10/new-effort-begins-to-outlaw-tesla-retail-model.html

[El Karacho1647545492]

http://www.dispatch.com/content/stories/business/2014/02/10/new-effort-begins-to-outlaw-tesla-retail-model.html

 

If these massive dealer groups put half as much effort and resources into providing top-notch customer service as they did this bullshit, they would have nothing to worry about.

[Littleguy]

If these massive dealer groups put half as much effort and resources into providing top-notch customer service as they did this bullshit, they would have nothing to worry about.

 

QFT!

[Draco-REX]

Now that I'm seeing how a dealership works from the inside, I can see why they are fighting Tesla. And it's not for the customer, regardless of what they are telling the state legislature.

[zeitgeist57]

http://jalopnik.com/ohio-senator-behind-new-anti-tesla-bill-gets-paid-real-1522401125

 

No surprises what's driving this legislation. Just ticks me off that of all the things we need to be looking at that this is a major concern...

[Mr. Jones]

Sad..

 

I hope people think about these childish antics when looking at these dealerships for a possible purchase. Is this who you want to give your money to?

[JuicedH22]

This is why all of us should write/email our legislators and tell them how we feel.

[Sledhead36]

I officially will never buy from Germain and Ricart ever again.

[Draco-REX]

I work for Dennis, but I'm sure every dealership has a finger in this one way or another.

 

I do wonder what they are trying to accomplish. All this will do is pause Tesla sales temporarily. Tesla would only have to "sell" their stores on paper and they're back in business. So how much competition could they possibly hope to squash?

 

If it's the direct-sales model that they are trying to kill, it won't effect this one bit. Again, it's a simple matter of routing the customer's requests through a local store. But the end result, as far as the customers are concerned, won't be any different.

 

Hell, if Tesla REALLY wants to give these dealerships the finger, they could sell $60K key fob sets that come with a complimentary car accessory/holder.

[Green Bastard]

I officially will never buy from Germain and Ricart ever again.

 

I've never purchased from these dealerships, but truth be told, I wouldn't take my business there anyways. I've heard many stories about how they treat the customers. It's sad that they are able to get away with the stuff they do.

[El Karacho1647545492]

I do wonder what they are trying to accomplish. All this will do is pause Tesla sales temporarily. Tesla would only have to "sell" their stores on paper and they're back in business.

 

One of the minor things in these lawsuits, and one of the few things that concerns me about the Tesla factory direct model is that they seem to be able to operate outside franchise dealer laws that were implemented in the name of consumer protection. For instance, my dad's office was offered a group test drive that'd take place at their company. This is illegal, as it is a form of selling offsite due to the presence of a "salesperson." This never ended up happening, because I think Tesla is trying to abide by these laws, but the waters are a bit unclear when it comes to what things they need to abide by and what things they don't.