mmarshall

The sheer amount of non-stop radio, TV, and Internet ads proves that.

Toys4RJill

I agree. The car business has tons of competition. Brand Vs brand and dealer Vs dealer of the same brand. Allowing manufacturer owned dealers puts the franchise at a disadvantage as the supplier of the product has the upper hand.

I am not sure how Mercedes does it in Toronto or Vancouver, but perhaps those dealers were once franchises that could not cut and the corporate took over until they could find another franchisee. I would assume Mercedes would want to sell a franchise vs not. The Toronto lcoation could very easily be figured out by franchise disclosure laws that must be provided for new prospective buyers. I am not sure of BC has the same sort of disclosure requirements.

bitkahuna

iTrader: (20)

those small dealerships are typically only selling used not new.

the point is, at least in parts of canada obviously it's legal for a mfr to sell direct.

but i still don't get why so many here are opposed to a brand selling direct ONLY if they want to. if consumers don't like the stores, or product, or price, there's as we all have said, plenty of competition. it's not like all brands would go direct overnight or at all.

coolsaber

Fine I`ll bite, what differences have come about since then? Has the direct sales model made the dealers want it more?

Och

iTrader: (3)

Nope - there are plenty of small dealerships here in Brooklyn that sell and lease brand new cars from various makers. They usually provide better deals that franchised dealerships, but they don't do service, loaners, parts, etc.

bitkahuna

iTrader: (20)

since when? are you referring to what's going on in canada?

coolsaber

Yup in Canada

My0gr81

MB Canada took over in YYZ and YVR in 2005 when the dealers refused to expand and renovate to accommodate the Smart brand into a single but distinct facility. Since then they have added two franchised dealers in YYZ, don't know about YVR. I know the MB Corporate stores have a strong "set price" policy but there were ways around it if one knew how to approach it. Regional stores are still franchised, the WEINS group that owns DVN Lexus also owns MB Barrie.

MattyG

So to pose a question: what's the difference if Tesla parks its display cars at the local high income or even middle income postal code's retail mall court vs what the local car dealers do routinely? Is it because one manufacturer goes through a intermediary and the other doesn't.

The local mall doesn't care. It gets its money either way. For customers at the mall, it's far less intimidating to show up at the mall and browse vs showing up at a dealership.

So if you decide you must have that brand XYZ vehicle right now, will you be buying that exact vehicle right at the mall? No you won't you'll be calling or texting some sales rep, and then the rest happens, where you will show up at the dealer and sit in some sales rep's office while he plays some back and forth with his manager, who is pressuring him/her to load you up big time with everything they can do, to make sure you walk out the door with a nice dealer markup.

Dealers are notorious for bait/switch tactics and it's a time-worn practice. You saw the internet ad and that's what gets you in the door. Are they really a distribution channel and competing or are they playing the numbers games because they can.

Toys4RJill

Not sure if the Canada Mercedes example is really the perfect example. Mercedes Benz Canada does not product and make cars. They are simply the Canada wide franchiser for Canada. Agree?


Nothing new. There have been cars on display in the shopping malls since I was going to the malls in the early 70s. They pop up here and there. The whole point of putting the car in the mall is to use the foot traffic of the mall to gain exposure. It never really worked IMO.

In Toronto, I have seen Tesla, Porsche, Chevrolet (I think in Rochester), and Genesis is coming soon.


You obviously do not have a stake in anything. The dealership model is designed to put pressure on you to buy the car and not leave without buying the car. This is how it gets done. The whole point is to get you into the dealer, feel good about the brand, feel good about the car, then part with your hard earned money.
There needs to be certain element of pressure applied to the customer, how much pressure obviously is different for every person but if applied wrong, the customer will walk.

The vast majority of people who buy cars are not fans of dealers and salespersons because they are scams or frauds. The vast majority do not like dealers because you are parting with so much money. That is why.

mmarshall

Stop and consider, though, Jill, that several things can make new vehicles in Canada more expensive than in the U.S.....some of which are behind a dealers' control. One is the international exchange-rate between American and Canadian dollars, and of both with the currency of the home-country of the vehicle manufacturer (Korea, Japan, Britain, Sweden, Germany, etc...). Another is the tax levels of the country involved....in general, sales-taxes in Canada are higher than in the U.S. Plus, I'm not sure about Canada, but several in European countries, it's even worse, wth taxes added on engine-displacement and emissions per mile. So, while, yes, not all dealerships are squeaky-clean honest (and some are more honest than others), some factors that affect what you actually pay, on the bottom line, are beyond their control.

coolsaber

My question from day one with Direct Sales models vs Dealership models is what do you hope to solve or achieve with choosing one over the other?

For Example:
Is this whole purpose to make sure everyone pays the same price (so essentially no one person can claim to have overpaid or get the steal of the century)?
Is the whole purpose to make buying is as simple as one click checkout?
Is the whole purpose to avoid pressure from salesmen?
'' to purchase the exact vehicle to your exact specifications?

And all I have read is its "unfair", the "grass is greener on the other side", "anti-competitive legislation" and so fourth.

I still have yet to find a reason as to why a pure direct sales model helps any of the above concerns. If you give the mfg of the product TOTAL CONTROL, you would basically give a single entity the power to control every aspect of your purchase experience....anti-competitive without any legislation whatsoever.

My0gr81

The only thing other than exchange rate making MSRP more expensive in Canada is distributor's greed. All mfg's distributors inflate Canadian prices for so called regional distribution and market difference purposes. With NAFTA and preferred tariff with Japanese and European imports, duties are not a significant factors. Sales taxes are added at point of sale, so that is not a factor either. Canadians are just used to pay more and mfg are more than willing to fleece us. Tesla in Toronto has their showroom in a high end mall, known to be most expensive lease rate, but that also attracts the highest earners (marks?) on any given day.

Toys4RJill

And even worse would be a franchised car dealer competing with a corporate owned dealer who also designs and supplies the product. The franchise would at a disadvantage

mmarshall

I'm not sure why you say that sales taxes are not a factor. They certainly are a factor on what you actually pay on the bottom line.....just like what you'll pay for licensing (if the vehicle gets new plates), the B.S. dealer-processing fee (which, in the U.S., is almost impossible to avoid, because the even state laws allow it to a certain extent), your trade-in value on the old car (if applicable), and any other (voluntary) things the Business-Manager hits you with after the sales-rep is done (extended warranty, service/oil-change deals, paint/upholstery preservatives, etc...)