Michigan to Tesla Motors: You're Not Welcome

[Destro]

Can somebody who understands the car industry explain this a little better?

Michigan Governor Signs "Anti-Tesla" Dealership Bill Into Law ? News ? Car and Driver | Car and Driver Blog

 

[phylodog]

Politician for sale

 

[hooky]

Tesla doesn't do the traditional dealership thing, so GM and their dealers don't want the competition in Michigan, or any other state for that matter. NJ also said no to Tesla recently.

A shining example of cronyism, rent seeking and barriers to entry.

 

[dusty88]

Car dealers have tried (and been at least somewhat successful) in banning direct-to-consumer sales because that is how Tesla sells their cars.

It's frustrating that Americans accept a rule like that, and meanwhile include banning sales on Sunday.

So if you want to buy a new car, you must give a piece of the action to the dealer, and they don't even have to work on Sunday.

 

[jd4320t]

I think it's Michigan's goal to completely die.

 

[Cameramonkey]

Politician for sale

But arent they all?

They go to Washington promising to drain the swamp, and instead find a hottub. (as the old saying goes)

 

[Magneto]

I believe Georgia did this as well.

 

[phylodog]

But arent they all?

They go to Washington promising to drain the swamp, and instead find a hottub. (as the old saying goes)

I'm not sure if they all are, I'd like to hold out hope that perhaps .001% of elected officials might not be but I acknowledge that I have no evidence to support that notion.

 

[atvdave]

Some states do allow auto sales on Sunday's, but not Indiana. I think it sucks that a company can not sale a legal product the way they wish.

 

[Mad Macs]

Texas did this as well to Tesla. In fact you can't even SHOW the price of a Tesla car in Texas at the Tesla dealers. So they have worked around the issue nicely.

Advocacy | Texas | Tesla Motors

 

[hooky]

Texas did this as well to Tesla. In fact you can't even SHOW the price of a Tesla car in Texas at the Tesla dealers. So they have worked around the issue nicely.

Advocacy | Texas | Tesla Motors

Next time someone tells you free markets are the problem, think about this from the link above.

We currently operate two Tesla galleries in Houston and Austin. In an effort to comply with the current laws, employees at these galleries are prevented from discussing pricing and the reservation process. This includes any discussion on financing, leasing, or purchasing options. Also, galleries cannot offer test drives. The store’s interactive kiosks are also amended to remove pricing. Lastly, we are unable to refer the customer to another store out of state. This puts Tesla at a serious disadvantage and inhibits our ability to reduce misconceptions and educate people about Electric Vehicles and the technology. Furthermore, people are forced to leave the gallery frustrated, lacking sufficient information about the car and the brand.

 

[Twangbanger]

Michigan has 145 legislators in the statehouse...and 144 voted to keep Tesla out. (Then Rick Snyder signed it as a formality). That tells you something about Michigan.

As much as you and I would think this stinks and reeks of stupidity, the citizens of Michigan know which side their bread is buttered on. Michigan is a plantation state and the Auto Industry owns everyone in it, to a greater or lesser degree. The state has vast swaths of rural, candle-dipping economy, punctuated by bursts of automotive revenue. Most there can still remember the wealth the old economy produced, and cannot envision the windmill economy arriving fast enough to do them any good.

The comparison to Indiana liquor stores is appropriate. When you offer the consumer a new choice, but have the laws and the legislators against you...and the additional consumer choice you offer is perceived as small and of limited salience...you're screwed. Want an electric car? Go live somewhere else. This is Michigan. Electric cars didn't pay for Uncle Bert's retirement, or the vacation cabin up north on the lake, or the boat, or the snowmobile/ATV, etc., etc.

Michigan is being run the way its citizens want, apparently. They are going to continue to dance with them what brung 'em.

 

[hooky]

It's not just Michigan that has said no.

Where you can buy a Tesla - CNNMoney

The only states where you could walk into a showroom and buy a Tesla are CA, CO, NH & VA. And NH doesn't even have a physical Tesla showroom.

 

[Mad Macs]

You can buy one here in Indiana, there's a showroom in Keystone. Almost pulled the trigger there.

 

[spec4]

Why wouldn't Tesla take this to court with the intent of ending up at SCOTUS if necessary? This is an outrage to what we are supposed to be as Americans.

 

[HoughMade]

The law neutrally stated that all new car sales must be through franchised dealerships. No direct sales from manufacturers.

I generally disagree with legislation regulating business and competition. This is no exception.

The bill supporters (franchise owners) generally argue that requiring new car sales through franchises keeps more of the profit from selling the car in state rather than going to the state (or country) where the manufacturer is headquartered. That is indeed true.

However, even though these laws do keep more money closer to "home", I don't see that as a reason to regulate competition.

However, if you agree with me, be aware that you are supporting evil large corporations over small (well, smaller) businesses, frequently family owned.

Why doesn't GM want to direct sell? A few reasons like- contracts with their franchisees which prevent it, the fact they want to spend money on manufacturing and not on the considerable cost of selling (Tesla is a tiny, boutique company by comparison- it wants market share without sharing the profits with a franchisee).

 

[Destro]

I was hoping a Rick Snyder fanboy would come on here and drop some knowledge on us

 

[dusty88]

The law neutrally stated that all new car sales must be through franchised dealerships. No direct sales from manufacturers.

Why doesn't GM want to direct sell? A few reasons like- contracts with their franchisees which prevent it, the fact they want to spend money on manufacturing and not on the considerable cost of selling (Tesla is a tiny, boutique company by comparison- it wants market share without sharing the profits with a franchisee).

There are obviously reasons for dealerships in many retail businesses. Retailers often NEED someone out there showing and servicing their product. Many retailers sell direct but at full price, leaving margin for their dealers. I'm not talking about cars insomuch as anything else such as furniture, electronics, etc.

Having 1 company do direct sales wouldn't stop the others from continuing a dealership model. It just removes 1 source of government-supported gouging. The dealers, theoretically, should be offering a level of service that causes you to WANT to buy there rather than deal with some far-away manufacturer.

My personal experience in recent years is that dealers don't provide the kind of service that they used to. My best guess is that may be a side-effect of warranty work. They get good reimbursement from the company. That's great for knowing your warranty work will be done and paid for. It's not great for holding dealer service centers accountable to the customer. It's a lot like the healthcare system. Hospitals provide lousy, overpriced service and people keep going back because someone else is paying for it.

 

[LockStocksAndBarrel]

Preserving the dealership network is important for service including warranty work. In addition, asking dealers to compete with factory direct sales isn't a level playing field. The manufacturers can sell to the consumer for much less and dealers can't survive on service department revenue alone. Vehicle sales are an important ingredient in profitability. True for many more industries besides automobiles.

 

[billybob44]

This part is NOT True...

There are obviously reasons for dealerships in many retail businesses. Retailers often NEED someone out there showing and servicing their product. Many retailers sell direct but at full price, leaving margin for their dealers. I'm not talking about cars insomuch as anything else such as furniture, electronics, etc.

Having 1 company do direct sales wouldn't stop the others from continuing a dealership model. It just removes 1 source of government-supported gouging. The dealers, theoretically, should be offering a level of service that causes you to WANT to buy there rather than deal with some far-away manufacturer.

My personal experience in recent years is that dealers don't provide the kind of service that they used to. My best guess is that may be a side-effect of warranty work. They get good reimbursement from the company. That's great for knowing your warranty work will be done and paid for. It's not great for holding dealer service centers accountable to the customer. It's a lot like the healthcare system. Hospitals provide lousy, overpriced service and people keep going back because someone else is paying for it.

" They get good reimbursement from the company. That's great for knowing your warranty work will be done and paid for."

After over 40 years in a GM service department, I can tell you for a FACT that the Dealer, nor the Tech gets "good reimbursement from the company"!!!

The Dealer, and in my case, the Tech, gets 1/3 to 1/2 the normal amount of Flat Rate Hours on the labor to do ANY Warrantee job.

The Company just tells the Dealer+the Tech-"That's the way it is", take it or leave it. If you sell our product, you will do warrantee work for a "Kick in your A$$"!!

This is the main reason that most warrantee work is done at such a "Half A$$ed" way...You get what you pay for....Bill.