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SVTPerformance's Chain of Restaurants
Road Side Pub
Georgia dealers want Tesla store shuttered for selling too many Teslas...
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<blockquote data-quote="VRYALT3R3D" data-source="post: 14393019" data-attributes="member: 131770"><p>The public is enamored with Tesla’s way of selling cars in its own stores. They believe the dealer franchise is archaic and that dealers are unnecessary middlemen who drive up the cost of cars. But I wonder if the public has thought this all through.</p><p></p><p>Car dealers have pretty thin margins. On average they make about a 2% profit margin. The best ones make about 5%. That’s because dealers have to compete against each other. Do you think dealers would compete so heavily if they were factory-owned? No, the factory would set the price and there would be no negotiations—just like Tesla.</p><p></p><p>Dealers will happily take your used car as a trade in, no matter what brand it is. They’ll pay you a wholesale price then turn around and retail it in their used car lot. Do you think factory-owned stores would be interested in selling used cars from another car company? Of course not. Do you know how Tesla dealers handling trade-ins? They send you to AutoNation.</p><p></p><p>Dealers are consumer-advocates when it comes to doing warranty and recall work because they get paid by the factory to do it. Do you think factory-owned stores would be so consumer friendly? Ha! Warranty and recalls would represent higher cost, not more revenue.</p><p></p><p>Personally, I have no problem with Tesla wanting to sell its cars in its own stores. I admire Elon Musk’s we’ll-do-it-our-way approach, and besides Tesla is a niche player. The real danger is when Chinese automakers finally to start selling cars in the American market. They could easily decide to side-step franchise laws because Tesla has set the precedent.</p><p></p><p>That could really wreak havoc in the car market, which would not be good for the car companies, not good for the franchisees, but most importantly it would not be good for consumers. Let’s hope the public wakes up to this before it’s too late.</p></blockquote><p></p>
[QUOTE="VRYALT3R3D, post: 14393019, member: 131770"] The public is enamored with Tesla’s way of selling cars in its own stores. They believe the dealer franchise is archaic and that dealers are unnecessary middlemen who drive up the cost of cars. But I wonder if the public has thought this all through. Car dealers have pretty thin margins. On average they make about a 2% profit margin. The best ones make about 5%. That’s because dealers have to compete against each other. Do you think dealers would compete so heavily if they were factory-owned? No, the factory would set the price and there would be no negotiations—just like Tesla. Dealers will happily take your used car as a trade in, no matter what brand it is. They’ll pay you a wholesale price then turn around and retail it in their used car lot. Do you think factory-owned stores would be interested in selling used cars from another car company? Of course not. Do you know how Tesla dealers handling trade-ins? They send you to AutoNation. Dealers are consumer-advocates when it comes to doing warranty and recall work because they get paid by the factory to do it. Do you think factory-owned stores would be so consumer friendly? Ha! Warranty and recalls would represent higher cost, not more revenue. Personally, I have no problem with Tesla wanting to sell its cars in its own stores. I admire Elon Musk’s we’ll-do-it-our-way approach, and besides Tesla is a niche player. The real danger is when Chinese automakers finally to start selling cars in the American market. They could easily decide to side-step franchise laws because Tesla has set the precedent. That could really wreak havoc in the car market, which would not be good for the car companies, not good for the franchisees, but most importantly it would not be good for consumers. Let’s hope the public wakes up to this before it’s too late. [/QUOTE]
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SVTPerformance's Chain of Restaurants
Road Side Pub
Georgia dealers want Tesla store shuttered for selling too many Teslas...
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