
Texas auto dealers say no special treatment for Tesla - codegeek
http://www.cnbc.com/id/101456297
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patmcc
>>"Once you start letting the manufacturers sell direct, then all of a sudden
the dealers I have in 163 towns of under 15,000 population, they disappear"

Why, because they're artificially increasing prices for consumers? Texas
should end special treatment for dealers, and let manufacturers sell cars
directly to consumers, if that's what the market wants to do.

~~~
cma
Dealers are some of the biggest donors; we need campaign finance reform

~~~
nickff
The alternative to this is to stop the politicians from imposing laws of
convenience by voting against these legislators, or amending the state
constitution.

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ars
"Once you start letting the manufacturers sell direct, then all of a sudden
the dealers I have in 163 towns of under 15,000 population, they disappear,"
he said. "All we would have is dealers in the major metropolitan areas with
one price controlled by the factories. That is not good for anyone, certainly
not 26 million Texans."

That would be great! That would be great for everyone, except maybe the
dealers.

I like how he says "price controlled by the factories" as if the factories
have nothing to do with the price now.

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sliverstorm
Great for everyone, except for the people who now live five hundred miles from
the nearest car dealer.

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fennecfoxen
Meh. If car dealers are so important to people, surely they can continue to
operate and turn a respectable profit representing the value that their
services provide.

There's really no need to make the decision (save money, or enjoy the services
a dealer provides) for everyone at once in a state legislative body... not
unless you're in what economists call the "rent-seeking" business, anyway.

~~~
sliverstorm
_If car dealers are so important to people, surely they can continue to
operate_

Car dealers are important for the same reason a shoe store is important.
You've got to go in and try on the shoe first to see if it fits. But much like
with shoes, consumers can figure out what fits and then go home and order from
someone else.

The only difference is (in my eyes) it would be even worse with cars, because
it's easier to spend an extra $5-10 supporting your local shoe store than it
is to spend an extra couple thousand supporting the dealer.

Dealers are also a portal for interacting with the manufacturer for things
like service, recalls, and TSBs. I'm not sure what, if anything, would step in
to fill that void if they disappear.

~~~
345723
There are plenty of repair shops. Going to a dealer for service almost
guarantees that you will pay above market price for both parts and labor.

~~~
Iftheshoefits
That depends strongly on the dealer and region, in my experience. When I lived
near my dealer I always took my vehicle there, because routine maintenance and
even new tires were either less expensive than or approximately the same in
cost as prices at local mechanics I researched.

The only reason I don't use a dealer now is because I found a fantastic
actually-small-business mechanic who is closer to me, and who didn't try to
pull the wool over my eyes and whose prices are reasonable.

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ryoshu
Car dealerships make a profit based off of information disparities. What value
do they add in today's world?

~~~
sliverstorm
Off the top of my head,

\- Place to window-shop and test-drive many different cars

\- Place to get your vehicle serviced by manufacturer-trained techs

\- Place to get TSB's, recalls, etc performed

How much the second point matters does vary, depending on the quality of your
local independent shops and your vehicle. Some vehicles are dirt simple, some
are really weird & complicated. Case-in-point; would you rather have Joe's
Gasoline Imports work on your Tesla, or Johnstown Tesla?

I'm not in love with dealers, but it's frustrating to see people writing off
the whole notion altogether, pretending they will be better off if the only
access to Tesla is a mail-order catalogue.

~~~
fancyketchup
Ok, so if dealerships provide a valuable service, then why are they so worried
about allowing manufacturers to sell directly?

If those things you identified are truly important, then manufacturers will
end up paying for them one way or the other (i.e., directly or by allowing
dealerships to take a cut of car sales). If dealerships are an efficient way
of providing those services, then why in the world would manufacturers abandon
this existing network of service providers?

Now, maybe it is the case that the current dealership model is the best way to
deliver those services to customers. Maybe having factory-owned service
centers leads to poor customer service. But won't the market figure that out?

> I'm not in love with dealers, but it's frustrating to see people writing off
> the whole notion altogether, pretending they will be better off if the only
> access to Tesla is a mail-order catalogue.

This is an interesting straw-man. In normal states, Tesla is allowed to set up
fixed-location service centers and "car stores" in malls. Potential customers
can take cars on test drives and a salesperson walks the customer through the
purchase process. Even in Texas, Tesla has showrooms and a limited ability to
set up mass test-drive dates. What Tesla is trying to do (but being prevented
from doing by silly laws) is make sure that customers don't "only access to
Tesla is a mail-order catalogue."

I don't understand why it should be illegal for the manufacturer to provide
the services you listed, _except through a third party._ Nobody is suggesting
that a car manufacturer shouldn't be _allowed_ to have a network of third-
party dealers, just that car manufacturers should be allowed the _option_ of
running sales and service directly.

~~~
sliverstorm
_This is an interesting straw-man_

It's not a straw-man, it's exactly what I hear some people saying they want.

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jobu
_" For the record, Tesla has not said it will locate its new Gigafactory in
Texas in exchange for the state changing its franchise laws."_

Are there any legal restrictions on a company making demands like this?

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ChuckMcM
Not really, lots of large projects that have a choice of states carry with
them "nice to haves" which are policy changes that would make the choice
"better." Intel played this game with their factory they put into Arizona,
Google with data centers (and Google Fiber of late), Tesla with battery
factories.

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maxharris
How about "no special treatment" for auto dealers, i.e., repealing the crooked
state franchise laws that give auto dealers a legal monopoly on auto sales?

~~~
xellisx
How about, no monopolies on anything? Cable and phone companies make deals
with the city to make sure they are the only ones in town.

As for the new car dealerships, I've hated the laws for a long time. I should
be able to go to WalMart and buy a new car.

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Crito
How about no special treatment for Texas auto dealers?

If computer retailers do not get their own special little protection in Texas,
why should auto dealers?

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spo81rty
The argument about closing rural dealerships is silly. Dealerships make their
money servicing cars and not from selling them. So there will always be a need
for service centers in those rural areas as long as the OEMs keep selling
enough cars one way or another to warrant it. Otherwise other independent
garages will prop up and service customers.

~~~
easong
There are tons of indie garages already, and you're way more likely to get a
fair deal at them than the dealer - a mechanic who owns his own shop will
quickly die if he does a bad job while a dealer that does a bad job will
continue to exist indefinitely.

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logn
The whole story of conservatives supporting de-regulation and free markets is
really just a cover story for crony capitalism.

Liberals don't hide the fact they want to re-distribute wealth to low-income
people. Conservatives should just come out and say they want to keep their
rich donors rich.

