<story><title>Tesla Can Topple the Car-Dealer Monopoly</title><url>http://www.bloombergview.com/articles/2014-03-20/tesla-can-topple-the-car-dealer-monopoly</url></story><parent_chain><item><author>beat</author><text>This is something I think a lot of people don&amp;#x27;t get about Tesla&amp;#x27;s state-by-state fight with the dealer networks. It&amp;#x27;s not about hating on electric cars. It&amp;#x27;s about the threat that Tesla&amp;#x27;s model poses to their entire industry. Frankly, Ford doesn&amp;#x27;t need its dealer network any more than Tesla does now, or they shouldn&amp;#x27;t. They could go to the same shop-online and drop-ship model, and cut out a middleman. If any of the major automakers start killing dealers, the whole industry will die, and quickly.&lt;p&gt;Why? &lt;i&gt;Because they&amp;#x27;re parasites&lt;/i&gt;. The dealer network evolved to solve distribution problems from 100 years ago. It makes zero sense as a business model in the 21st century. &amp;quot;Ripe for disruption&amp;quot;, as we&amp;#x27;d say in these parts. All they have is inertia, deep political connections, and a century of regulatory mazes. But those are three very big things to have.&lt;p&gt;Still, they&amp;#x27;re fighting a defensive war. They will lose. The question is only how quickly, and at what cost to consumers?</text></item></parent_chain><comment><author>Shivetya</author><text>We have to be careful here, while I am all for Tesla being able to sell their cars where they want I want assurances I can get their car and any other car serviced where I want.&lt;p&gt;Car dealers and independent auto service centers need protection from manufactures; dealers can service brands they don&amp;#x27;t sell should they choose.&lt;p&gt;The danger in allowing manufacturers to determine how sales are made is they will likely dictate how repair and maintenance is handled. While maintenance on an electronic vehicle is going to be significantly different my warranty should not be affected should I choose someone other than the manufacturer to repair it.&lt;p&gt;disclaimer, I work for a leading supplier of auto parts.</text></comment>
<story><title>Tesla Can Topple the Car-Dealer Monopoly</title><url>http://www.bloombergview.com/articles/2014-03-20/tesla-can-topple-the-car-dealer-monopoly</url></story><parent_chain><item><author>beat</author><text>This is something I think a lot of people don&amp;#x27;t get about Tesla&amp;#x27;s state-by-state fight with the dealer networks. It&amp;#x27;s not about hating on electric cars. It&amp;#x27;s about the threat that Tesla&amp;#x27;s model poses to their entire industry. Frankly, Ford doesn&amp;#x27;t need its dealer network any more than Tesla does now, or they shouldn&amp;#x27;t. They could go to the same shop-online and drop-ship model, and cut out a middleman. If any of the major automakers start killing dealers, the whole industry will die, and quickly.&lt;p&gt;Why? &lt;i&gt;Because they&amp;#x27;re parasites&lt;/i&gt;. The dealer network evolved to solve distribution problems from 100 years ago. It makes zero sense as a business model in the 21st century. &amp;quot;Ripe for disruption&amp;quot;, as we&amp;#x27;d say in these parts. All they have is inertia, deep political connections, and a century of regulatory mazes. But those are three very big things to have.&lt;p&gt;Still, they&amp;#x27;re fighting a defensive war. They will lose. The question is only how quickly, and at what cost to consumers?</text></item></parent_chain><comment><author>bluedevil2k</author><text>I wouldn&amp;#x27;t be so dismissive of dealers by simply saying &amp;quot;They will lose.&amp;quot;  The most important thing in American politics is power, and power comes from money (sounds like that comes directly from House of Cards).  The article points out that the car dealer lobby is well funded and powerful.  It even points out that they are exempt from the Consumer Protection laws, meaning they don&amp;#x27;t have to disclose the awful interest rates they are offering (which surprised me).  Look at the size of a company like AutoNation ($6.3B market cap).  They aren&amp;#x27;t a local mom and pop car dealer. Never underestimate the fight of a wounded animal backed into a corner.</text></comment>