The Legacy dilemma #1 dealerships

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Legacy auto makers in the US, years ago, established “dealerships and agreements” in order to sell their cars.

Today, with online/internet capabilities, the dealership is no longer needed, in order to reach potential customers.

In addition, Lower service needs of EVs, equals lower need for dealership service departments.

Yet the Legacy “rules” are a problem. And are being used to try to stop Tesla sales.

Tesla doesn’t use dealerships, preferring instead to market direct to consumer and cut out the middleman dealerships.

Tesla has found a way around this? Fall2021 news.
Tesla builds 1st store on tribal land, dodges state car laws
https://apnews.com/article/technology-environment-and-nature…
Go Tesla!

Adding dealership cost onto the auto makers costs, increases the pressure on profit margins…
Which reportedly strengthens Tesla’s competitive position.

Legacy auto makers are in controversy with their dealerships.
GM NO OPTION but to “Lay Down the Law” or Will Bankrupt, WARNING Tesla.
https://youtu.be/f0JLXPNdneQ

In addition, “a small minority” of legacy dealerships are unscrupulously gouging customers. LOLOLOLOL
No. … ROFLMAO

Will there be more pain for the USian consumer?

BYD, NIO, Xpeng, and other Chinese models are reortedly being introduced in many other countries… but I don’t hear “in the US”.
(BYD apparently sells busses? But no personal vehicles yet?)

Since the Chinese NEV makers are copying the Tesla plan, will they be prevented from selling in the US?

Us automakers are famously resisting the shift to EVs.
Will US legacy automakers be “protected” from foreign competition?
Will USians be forced to endure with ICE vehicles simply due to the Legacy?

:eyes:
ralph

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Did you notice in the GM video that they are doing business with a Chinese company called POS CO? They spell it POSCO.

For dealer history just look at how DELL made out by selling direct to customer. IBM tried to copy DELL but their sales channels objected so vigorously that IBM had to drop the initiative.

BYD does sell personal vehicles.
https://www.google.com/search?q=BYD+does+sell+personal+vehic…

Denny Schlesinger

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In Missouri the dealers association lobbies the state legislature and even runs TV ads emphasizing the local jobs they create.

This is a middle man agency that is entrenched and protected by state laws.

You might suspect it will be difficult to change those laws. Especially at the request of a kid from California. (Sounds like another fight over the state’s puppy mills. Local business wins over outside interference in Missouri.)

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This is a middle man agency that is entrenched and protected by state laws.

The dealership model might be hard to kill but it can die from natural causes, i.e. lack of profits, as buyers shift to non-dealer brands.

One curious outcome is that the dealership model will hurt ICE incumbents that can’t get rid of dealers just as it hurt IBM to the point of them selling the PC division (Lenovo?).

Dealership model? Advantage Tesla!

Some commenters have suggested that ICE incumbents might spin off their EV brands and let the remaining ICE brands go bankrupt. That might be the end of the dealership model and a way of stiffing creditors.

Denny Schlesinger

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Many Cadillac dealers were terminated when they refused to invest in equipment to service (recharge?) Electric vehicles.

This could be the future for more ice dealers. Perhaps they will specialize in used cars.

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The bulk of the income for car dealerships comes from the service department. The relative simplicity and greater reliability of EVs will trim that back. The businesses simply won’t provide the profits to which they are accustomed. The income that some of them will think is their right.