tesla's real impact - breaking the car dealer monopoly
#151
Lexus Fanatic
things can and will change. i can imagine getting virtual test drives soon with a headset at the dealer without having to go anywhere. "not good enough!" you say? well, it could be really close to reality, save time for customers, and be 'good enough' to make a purchasing decision. if done by a manufacturer and not an inefficient dealer with a no questions asked don't take it upon delivery, it could work.
And that basic practice, of course, in itself, is nothing new......it goes back decades, to before computers were introduced. Manufacturers have attempted to make press-introduction vehicles look and feel better, for the reviewers, than actual production models to follow (one reason, among several, why I myself pick average vehicles sitting on the lot when I do a review). One of the most famous examples of this was the introduction, in 1979-80, of the ill-fated GM X-Body compacts...Citation/Phoenix/Skylark/Omega (I owned one of them myself). Car and Driver magazine later published a policy-admission, and a formal apology to its readers, on how they had been duped by GM marketers, who had sent them (unbeknown to the magazine at the time) specially-constructed / inspected / doctored samples of these new FWD compacts that were far-better-built and performing than the actual production models. The actual production models were so poorly-built and engineered (and sold at record numbers...Chevy sold over 900,000 Citations alone that first year, independent of the other three models) that they had class-action suits and a record number of recalls.
#152
Lead Lap
with centralized warehousing, the costs for EVERY dealer to maintain their own inventory is gone. Its going to be cheaper for every dealer to maintain an inventory instead of one central location? You think furniture stores maintain inventory at each of their locations? No its a showroom, the real inventory is stored in a central warehouse. This is how every other industry deals with bulky and expensive inventory that can sit around for weeks or even months. Dealers have little incentive to improve efficiency with this protectionist laws and this secret cost number padding that no one seems able to nail down. The dealership experience is horrible most of the time, because you have no other alternative. Why not skip all this BS?
People are just so mentally stuck in this model, that they refuse to imagine another way of doing it. All because of protectionist dealer laws.
People are just so mentally stuck in this model, that they refuse to imagine another way of doing it. All because of protectionist dealer laws.
#153
Lexus Fanatic
iTrader: (1)
it doesnt matter what the brand is, it is inventory, regardless if its 1 manufacturer or 10. Having inventory that sits around for months is expensive, especially for new vehicles which have huge depreciation once used. Guess whos paying for it, not the dealer.
one excerpt:
https://www.mercatus.org/publication...ks-auto-buyers
wonder why a new car has what 20% depreciation once you drive it off the lot? Theres part of your answer there, the dealer is causing close to 10% of that. Dell computers dropped the price and practically put a computer in everyones home by doing a direct to buyer sales model.
one excerpt:
https://www.mercatus.org/publication...ks-auto-buyers
Mandatory franchising also prevents established manufacturers from selling directly to the segment of consumers who might prefer to avoid the dealership and simply order a car from the manufacturer, the same way many consumers buy built-to-order computers from manufacturers. Gary Lapidus, formerly a US auto industry analyst for Goldman Sachs, estimated that a build-to-order system could save consumers $2,225 on the price of a new car, based on an average price of $26,000 per car.18 A position paper prepared for the National Automobile Dealers Association (NADA) disputes this figure, labeling it “a math exercise that assumed that such expenses would vanish in a direct distribution model.”19 Since manufacturer direct sales are illegal in all 50 states, neither manufacturers nor consumers have the opportunity to find out.
#154
Lead Lap
with centralized warehousing, the costs for EVERY dealer to maintain their own inventory is gone. Its going to be cheaper for every dealer to maintain an inventory instead of one central location? You think furniture stores maintain inventory at each of their locations? No its a showroom, the real inventory is stored in a central warehouse. This is how every other industry deals with bulky and expensive inventory that can sit around for weeks or even months. Dealers have little incentive to improve efficiency with this protectionist laws and this secret cost number padding that no one seems able to nail down. The dealership experience is horrible most of the time, because you have no other alternative. Why not skip all this BS?
People are just so mentally stuck in this model, that they refuse to imagine another way of doing it. All because of protectionist dealer laws.
People are just so mentally stuck in this model, that they refuse to imagine another way of doing it. All because of protectionist dealer laws.
#155
Lead Lap
it doesnt matter what the brand is, it is inventory, regardless if its 1 manufacturer or 10. Having inventory that sits around for months is expensive, especially for new vehicles which have huge depreciation once used. Guess whos paying for it, not the dealer.
one excerpt:
https://www.mercatus.org/publication...ks-auto-buyers
wonder why a new car has what 20% depreciation once you drive it off the lot? Theres part of your answer there, the dealer is causing close to 10% of that. Dell computers dropped the price and practically put a computer in everyones home by doing a direct to buyer sales model.
one excerpt:
https://www.mercatus.org/publication...ks-auto-buyers
wonder why a new car has what 20% depreciation once you drive it off the lot? Theres part of your answer there, the dealer is causing close to 10% of that. Dell computers dropped the price and practically put a computer in everyones home by doing a direct to buyer sales model.
#156
Super Moderator
That is the setup in Greater Vancouver, 4 of the 6 Mercedes dealerships are corporate stores owned by MB Canada, the other 2 are franchises, there has been both for years.
Last edited by Gojirra99; 07-12-17 at 01:40 PM.
#157
Super Moderator
What you are (apparently) overlooking is that you will usually have far fewer hassles if you trade it in, even though you usually don't get as much. Dealerships are equipped to handle the necessary paperwork, deal with DMV, issue temporary license-tags, provide a Notary-Public for document-transfers, clean up and detail vehicles, etc.... Yes, you can sometimes get more on a private sale (and sometimes not)....but you often have questions like who is going to drive home on whose tags, finding an NP, dealing with compete strangers (and sometimes carjackers) on test-drives, and other actual and potential problems..
#158
Lexus Champion
Same here where I live. Except the 17% tax part.
Last edited by LexBob2; 07-12-17 at 01:51 PM.
#159
Lexus Fanatic
17%......that's a lot. Sounds like the authorities there in Vancouver reach pretty deep into people's pockets. By U.S. standards, you're probably getting screwed, but, if that high a tax-and-spend system is what the population wants (or tolerates), I guess that's up to you and the politicians you vote into office.
#160
Lexus Test Driver
So that puts the buyer behind the 8 ball, since Tesla doesn't take trade ins. They pay the tax on the full price.
#161
Lexus Champion
iTrader: (3)
things can and will change. i can imagine getting virtual test drives soon with a headset at the dealer without having to go anywhere. "not good enough!" you say? well, it could be really close to reality, save time for customers, and be 'good enough' to make a purchasing decision. if done by a manufacturer and not an inefficient dealer with a no questions asked don't take it upon delivery, it could work.
#162
Lexus Champion
Originally Posted by mmarshall
Yes, I know he likes Musk personally.....he's said that in other articles and interviews. But liking someone does not mean agreeing with (or copying) they way they do business. John DeLorean, for example, got to the point where he (supposedly?) was running cocaine to support his cash-starved company. I'm not saying that Tesla is doing anything extreme or illegal like that (chances are 99.999% they aren't)...but Lutz, otherwise, still has to be candid about what he perceives as a risky business.
IMHO you also have know who is doing the talking on these types of tv and press programs and what they've done in the past. Lutz talks about Tesla's unsustainable business model yet he was in the upper ranks saying nothing about the corporate welfare bailouts of the Obama administration to the tune of $11B back in 08/09. What exactly was GM's business model then? And we know now that Chyrco's taken two government bailouts/loans.
If he's so keen on GM stock, how come he dumped it back then, as the winds changed? He and those in the upper ranks, selling like crazy.
http://www.businessinsider.com/henry...kruptcy-2009-5
Originally Posted by LexsCTJill
EV's are nice right now, but as more and more of them get sold, then the cost to use electricity and taxes will increase making it a moot point. Those fancy Supercharger networks look good right now because they are free for current Tesla owners, but the upcoming Model 3 you will have to pay for it. The infrastructure for gas is so large and vast that gas powered vehicles are here to stay.
As far as the Tesla retail model, it's what a new startup does. So for now, direct selling and small stores is what it can do well. But Tesla is fighting headwinds with an established vehicle infrastructure. Tesla can't possibly try and change the whole transportation infrastructure overnight. It took a century to establish a huge network of gas stations that dovetailed with the evolution of the internal combustion engine.
#163
Lexus Fanatic
As far as the Tesla retail model, it's what a new startup does. So for now, direct selling and small stores is what it can do well. But Tesla is fighting headwinds with an established vehicle infrastructure. Tesla can't possibly try and change the whole transportation infrastructure overnight. It took a century to establish a huge network of gas stations that dovetailed with the evolution of the internal combustion engine.
#164
Lexus Champion
Originally Posted by LexsCTJill
Do well? Tesla is not making any money. How could they be doing well? This is why I have said that what Tesla is doing is nothing all that great. There is at least a 14 day wait for their cars to be delivered from what I understand, they don't take orders, and people are paying MSRP for the cars. That totally sucks if you ask me.
The question that's being debated is whether or not Tesla will change the automotive world's retail distribution model and whether they will be able to overcome the hurdles in front of them. If we judged by the standards you're talking about, GM, Ford and Chrysler might have never made it past the goal posts. Is it Tesla that went running to Big Government for a massive multi-billion dollar welfare loan while that industry's executives pocketed huge multi-million dollar salary packages and flitted about on private jets... while dumping the stock in their own companies?
#165
Lexus Fanatic
You are rehashing several posts worth of arguments about Tesla not making money. Not delivering instantaneously, not giving buyers some huge inventory to pick from on a lot. Losing money on each car. These are likely talking points planted by the people who feel threatened by Tesla's innovation. And I'm not even a cool-aide drinker. I think if they fail, then they fail.
I don't see anyone trying to copy what they are doing. The Genesis brand can barely get off the ground with no delears for people to go. A large retail network with a proper inventory is the only way to succeed selling cars. Yet everyone wants to say it's not efficient.....yet Tesla makes no money.