Tesla dealerships aren't really dealerships in the traditional sense. They have showrooms so you can check out cars, but half the time, they have no cars to check out. These same showrooms have a fleet of cars for test driving purposes but if you try to buy a car, they help you build it on the website. There are sometimes a few cars in-stock as they may have overbuilt a particular spec car or if some people cancel their orders last minute but most people wait for a car that was built to their spec and get a VIN when the factory is done building them.

Also, most of the deliveries are done at service centers where actual sales don't take place. The service center just preps the car for delivery and sometimes, someone may help describe the features of the car but many times, you have to request this (maybe they just don't have enough people?). I really hope Tesla doesn't go the traditional dealer route as it was overall a much better experience overall than prior car buying experiences. I ordered the car online (like an iPhone), and when it arrived, I got a text to pick it up.

 

I think this will be a hybrid of some sorts in the future. The dealers will still have full lots of models with the most popular options and customers can custom order easily, albeit without much discounts if at all. This is especially good now because of the chip shortage, they can pro long order times and not have unfinished cars sitting there waiting for chips.

 

Nobody wants anyone to make money anymore. Sad. I just recently inherited a building in Toronto. It was built in the 1950s and was a business rental for 70 years. Immediately when I received ownership, it went up for sale and my life long realtor who has sold/bought everyone’s house in the family sold it for for us in one week. It was actually her son who sold it with her. A $100K commission. Everyone is so cheap today. Therefore, the salespersons are always the enemy!!!!

 

Exactly. As long as I am getting a fair deal, people can make whatever they want.

Service costs money.

 

The main competition is between car manufacturers; ie, Ford F-150 vs Chevy Silverado. Dealer competition is regional. Direct purchasing removes the regional component.
Dealers strive to get the most money out of customers, not the other way around.
Ford is talking about a direct ordering and purchasing model, correct? The dealer becomes the delivery point.

If there is a combination of factory-direct and franchised dealerships that compete against each other, that could mean better deals and better experiences for the customer.
Additionally, dealer discounting relies heavily on factory rebate money and financing. Who do you think will get priority on factory money?

Sounds to me like dealerships are in trouble...

 

Not entirely true. Dealers can communicate their wishes, but what gets allocated to them is typically not 100% of what they ordered and submitted for. There are supply constraints, there are regulatory constraints and a host of other elements.

 

No, Ford is not talking about direct factory ordering. You order direct but through dealers. Only
difference will be how cars are inventoried at dealers.

 

I do understand this very well after 40 years as a new car dealer including a Ford dealership. You do get allocations from the factory. On different models and at different times you may get more allocated or fewer allocated than you want as a dealer. It is the dealers prerogative to take or not take the allocation and to specify exactly how they want them built. Exactly as how I stated.

The BS being written and encouraged by Ford is based on their desire going forward to try to maximize their situation with some of their new product. They are sitting on "reservations" for some of their new products including the electric Mustang, the electric F150, and the new Bronco. Right up until the moment they run out of those "reservations" they can say a lot of nonsense. When the moment comes there is no order, the dealers will become the source of an order and the source of holding their inventory. Ford makes money and exists based on building cars and trucks and shipping them to dealers. No building...no income...no Ford!

 

I am not sure the process is completely defined. But I think you are mistaken. Plus, depending on how customers respond and what it does to Ford's bottom line, it will morph one way or another.
From Ford:
"It's a really exciting way for us to sell vehicles in partnership with our dealers," Galhotra said. "You can start building your vehicle, pricing it, put it in the cart, and you can go all the way to make a transaction. Ford Credit can approve the customer's credit in seconds, and you can make the payment and the dealer can deliver the car to your home."

 

Im not mistaken. Just read what you quoted “in partnership with our dealers” “you can make the payment and the dealer can deliver the car to your home”. DEALER.

Dealerships have franchise agreements with dealers they can’t sell cars directly. If they did all the dealers would file suit for breach of contract.

 

Sometimes it IS the other way around. I have seen, and shopped with, classic cheapskates, whose names/idents I would rather not use, who would haggle and argue until midnight rather than hand over one extra dollar to a dealership on the deal. IMO, completely preposterous. One person (a friend of my brother) DID argue till midnight LOL.....for a new Honda Cvic.

 

i don't believe i ever wrote there was a time you could not order a new ford. if so, wasn't my intention.

very very little 'stock' (mainly for test drives), and moreover, they're obviously not 'dealers' since they're tesla owned stores. and there's no dealing. price is fixed, do it on the website, done.

maybe that's a good thing? credit cards are convenient too, but because they make buying SO convenient look at how many people get in debt they can't handle? that impulse for the shiny new object RUINS may people's lives.

people can expect many things, but that doesn't mean they can have them. personally i find many people have ludicrous expectations of what life (and other people) 'owes' them.

not at all, again what you're missing is the incentive isn't 'free money' it's factored into the car price. so with less incentives, car companies are able (if they choose) to have LOWER prices so they're more competitive. car companies don't get to just price things however they want. if your mercedes had been $200K you wouldn't have gotten it i expect.

didn't mean to say you add no value, but, and no disrespect to you and others (more power to ya!), i made my case why i think realtors take WAY too much of a cut. to understand my perspective, realtors in the uk take 1.5% commission, not 6% or more!
Real Estate Models: UK vs USA - GeekEstate Blog

it didn't. it's a rental property and my friends kept it immaculate. they talked to realtor, realtor listed next day, it sold that day. realtor made easy stack.

i did not write that, and i don't think that. overpaid is different than worthless.

no doubt, but not the point.

agreed, but i don't see lots full of new cars, mainly used. i also predict much more cars becoming leases and that's another reason car dealers will end up with way more used than new.

really? her son made $100K in a week... if you think that's reasonable, i don't know what to say. i say that's ABSURD. congrats on the huge inheritance though.

 

it's true that there are unreasonable customers. a car dealer is unlikely to sell a vehicle though if they aren't happy with the deal though. but the vast majority of the 'power' is the other way... the dealer's skilled tactics, tricks, and 'war of attrition' in dominating the 'negotiation'.

 

Realtors in the US do not get 6% of the sale lol, like I said you have no idea what you’re talking about. It’s on average between 2-2.5% gross to the company and then the agent gets a % of that between 50-90% depending on their deal with their broker. The seller pays both sides of the commission, so they pay the buyers agent as well but that is almost never the same
person. That’s a shift that is going to happen eventually where buyers will wind up paying their own agents.

And there are many models. You can find people who
will do it for a flat fee, Redfin has a salary model
and they do it for 1%. Service varies and of course everyone has their selling proposition as to why their model is best.

As for being overpaid, I am worth every penny of what I charge and I have many happy clients happy to pay me. How is what you do and what you get paid so vital? I can do a Google search and do my own IT for free. I don’t actually believe that but you see the point.

And the $100k in a week. That’s sales, that’s not every week…and that’s likely a very very few times in a career event. He just as easily could have done a ton of work and made nothing. That’s life when you’re paid on commission. It’s not unique to real estate at all.

 

Come on. Before we start throwing stones and insults, consider that bitkahuna is not just serving hamburgers at McDonald's....he also also has a job where one needs some education and perseverance.