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Tesla vs. Car Dealers: the Lobbyist Went Down To Georgia
McGruber writes The Atlanta Journal Constitution (AJC) newspaper's Jim Galloway has an update on the behind-the-scenes battles over who can sell you a new car: "Traditional car dealers are in the midst of a legal fight to push Tesla, the fledgling California electric car company, out of Georgia. Never mind that metro Atlanta is one of the hottest markets for electric vehicles in the nation. Signs point to a parallel battle in the General Assembly. Last week, the National Automobile Dealers Association began trolling for sympathetic lawmakers. While Georgia dealers say they have "no plans" to revisit an anti-Tesla bill that failed last year, Tesla is preparing a defense. It has already hired one of the top lobbying firms in Atlanta."
The Georgia Automobile Dealers Association wields considerable influence in the state Capitol; the AJC determined that the Georgia Auto Dealers Association (GADA) had made over $600,000 in recent campaign contributions to state lawmakers. Despite those contributions, a bill to boot Tesla from Georgia mysteriously died during last year's legislative session. While no legislator would claim credit for killing the bill, Galloway noted that Lt. Gov. Casey Cagle, who presides over the Senate, drives a Nissan Leaf.
The Georgia Automobile Dealers Association wields considerable influence in the state Capitol; the AJC determined that the Georgia Auto Dealers Association (GADA) had made over $600,000 in recent campaign contributions to state lawmakers. Despite those contributions, a bill to boot Tesla from Georgia mysteriously died during last year's legislative session. While no legislator would claim credit for killing the bill, Galloway noted that Lt. Gov. Casey Cagle, who presides over the Senate, drives a Nissan Leaf.
An industry is using government regulation to stifle competition? Holy cow NO!!!
https://en.wikipedia.org/wiki/...
My Other Computer Is A Data General Nova III.
Lobbying, is corruption clear and simple. They should jail everybody connected to it.
So much for "free market" and "competition". Screw that old fashioned shit, let's get back to territory protection and arbitrary monopolies to screw over the custom... I mean, to protect the customer and ensure the highest possible quality.
No, you're not encouraged to try to find out how it should increase quality and create the best product for you when a monopolist can pretty much sell you any crap and you have to buy it, lacking any options.
Politicians? You expect politicians to do anything against that? For real? They're doing exactly the same and benefit from the same monopolizing, anti-competitive mechanisms in their area, you honestly expect them to do something against what they learned is good for them?
Face it, we're fucked.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
I have friends who have worked as IT consultants in Detroit. Their inside story is that NADA is more powerful than the automakers. It is not that the auto makers are saints, but the laws governing data sharing between the dealers and the auto makers is very heavily biased in favor of dealers. Even very minor data gathering projects have to go through several layers of approval from NADA. NADA is very suspicious of the automatkers.
There is very good reason for the strained relationship. The automakers would dearly love to ditch the dealership model of sales and go for direct sales. The auto makers believe the dealers are acting in bad faith and against the interests of the makers. Many dealerships are actually selling cars from different vendors. Even when the dealerships are nominally different they are owned by same clan or extended family in a market. They demand the automakers to cut deals with them and they are not above promoting one maker to punish another maker. The present set up is so biased in favor of the dealers, if it at all it is possible to ditch them, the auto makers will boot them in no time.
What NADA is really afraid of is setting a precedent allowing Tesla to sell cars directly breaking their monopoly of access to auto buyers. Americans love cars. Automobile is the second most expensive thing a person buys, after home. (Slowly slipping into third place, behind college tuition). Still car buying is the most unsatisfactory part of car buying. We can thank NADA and its selfish policies for this anomaly. Once Tesla breaks the dike, so NADA believes, all automakers will sue for equal access to the market and the dealerships will be at a huge disadvantage.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
It's like we're not even trying to hide anymore how bribes work in this country. Saying that the association holds influence, and then backing up that claim with exactly how much they've "donated"... Payola is still illegal, prostitution is still illegal, yet, bribing politicians is considered par for the course. Business as usual. I think it's time we called politicians in America what they are. Whores. And they will turn tricks for the measliest of sums.
All those dealers are pissing in their pants that they won't be able to as easily provide "value" such as $1000 detail/wax jobs, $10/gallon gas, and ridiculously structured "protection plans"
It might not be just lobbying and and campaign contributions that turn legislators' heads. It could be tax revenue as well. According to this document a lot ff tax revenue is created by car dealerships.
States earn about 20 percent of all state sales taxes from auto dealers, and auto dealerships easily can account for 7–8 percent of all retail employment. The bulk of these taxes (89 percent) are generated by new car dealerships, those with whom manufacturers deal directly.
If States allow direct sales there goes the tax revenue. I am not saying it is a good thing just another incentive for States to keep the franchise laws.
Except when God fearing, free marketing, red states can use them to stifle competition.
The shepherds did so well protecting the flock that the sheep no longer believed that wolves existed.
The reason the laws existed in the first place was because at the dawn of the industry the franchise fees were used for capital by the manufactures. Without the legal protections car makers could simply run the franchisees out of business once they became big enough. To a similar extent when foreign makers moved into the USA the franchise fees helped build the infrastructure.
Now we have a conundrum where Tesla doesn't see itself needing the dealers and is going on it's own. A large chunk of that is based on most buyers are going to be in big cities. They only need need 1 or 2 showrooms per state for the foreseeable future. They don't see the need to build out the showroom network which would require having franchisees. For Tesla the Franchisee system would certainly add another 3-4K to the cost of each car. They'll never get the model 3 to fit into the expected price range going that route.
At the same time you can't just get rid of all the dealer protections because Ford, GM, Toyota, Honda, etc would be more than happy to cherry pick the most profitable areas for corporate dealerships. Those dealerships are owed that exclusivity because they invested in the company at the beginning. I personally don't think the dealers give a crap about selling Tesla, but they foresee the big auto makers suing to get rid of franchise laws if Tesla is allowed an exemption.
The analogy doesn't work. In the song, the Devil accepted when he'd lost.
Science is all about firing a drunk pig out of a cannon just to see what happens.
the kind of competition lacking if the manufacture sets the price and there are no negotiations over that price.
Really? I would love to be able to shop for a car and know that no matter where I shopped I was getting the exact same price. I absolutely HATE having to negotiate on the price, and the popularity of services like truecar suggest that a huge number of people agree with me.
I think Tesla will have to sell cars via dealers
Why? Tesla sees dealers for the unnecessary middle men that they are. They've already shown that they would rather not enter a market than open a franchised dealership. I don't see any reason that this would change.
They bring the cars from the engineers to the customers. They have people skills damn it!
My God can beat up your God. Just kidding...don't take offense. I know there's no God.