Will Dealerships Become Obsolete?

[MTI]

Dealers would do Tesla a disservice - CNET

I can see the potential that the state laws banning direct sales by Tesla drawing scrutiny as unconstitutional. If so, could we end up buying future new cars on Amazon?

[P.C.]

Originally Posted by MTI

Dealers would do Tesla a disservice - CNET

I can see the potential that the state laws banning direct sales by Tesla drawing scrutiny as unconstitutional. If so, could we end up buying future new cars on Amazon?

It would be quite a spectacle to see a King Ranch F-350 crew cab delivered by drone...

[rscurtis]

I'd also be curious to see who's going to fix the engine when it takes a dump.

[spdrun]

Originally Posted by rscurtis

I'd also be curious to see who's going to fix the engine when it takes a dump.

No dealerships doesn't imply that factory-authorized mechanics won't exist.

[Alain V.]

Back in the mid 1980's,,,,,I used to have a customer with a Euro 500SEL who also happened to own large new car dealerships in multiple states.
I don't want to mention names or brands since I want to respect his identity, but this guy has a bunch of domestic car franchises.....

I got to know him since he brought his car to me for service, and one day I asked him,,,,,,, "why do you bring your car to me, when you own multiple new car stores?"

He answered, "none of my guys are qualified to touch this car."

I then asked him how he liked selling new cars and he flat out told me ,,,,
"Kid- owning a new car dealership is simply a license to STEAL used ones,,,,,,That is where the money is." Trade ins and financing are your profit centers.

[strelnik]

Originally Posted by spdrun

No dealerships doesn't imply that factory-authorized mechanics won't exist.

They will be replaced by Cylons...

[INSIDIOUS]

Originally Posted by rscurtis

I'd also be curious to see who's going to fix the engine when it takes a dump.

Or the motor even, I wonder what they do with engines in them things?

[P.C.]

A drone will hover over your house and drop off a tech. Heads up!

[TylerH860]

Owning a franchise is more about the service and used car revenue than new cars. There's no money in them anymore, too much competition and savvy buyers who only need to do a few minutes of research to be versed in price.

I believe all new car dealers should sell on a fixed, discounted price, and get paid a small percentage, 3-5% at the most. Where they can make their money is on financing, wholesale/used, and service.

If you look at a new Chevrolet pickup truck, the asking price is $40,000 for a mid level equipped 4x4 crew cab silverado. Ridiculous, but you feel good when they can give you $8000-10,000 off in dealer incentives and discounts. If they were all priced the same at the get go and HAD to stay there, alot less headaches for dealers.

The Toyota brand Scion is this way, and works well.

[aklim]

Originally Posted by TylerH860

Ridiculous, but you feel good when they can give you $8000-10,000 off in dealer incentives and discounts. If they were all priced the same at the get go and HAD to stay there, alot less headaches for dealers.

The Toyota brand Scion is this way, and works well.

I was at a local gun dealer trying to get a trade in on a Sako 75 rifle, IIRC. He said he didn't want to buy it or trade. Suggested I take it to Gander Mountain. Why? Because it was chambered in 300 Remington Ultra Mag. Gander Mountain could ship it to another store where they would sell it whereas his customer base would not buy it and it sits. So, while you say that fixed pricing would have less headaches for the dealer, I say it might hurt everyone. How? Well the dealer would not be able to move items that were not selling on his lot since he has nothing to bargain with. As a buyer, I would want to find a dealer that has a desperation to sell because a bunch of that product is sitting on his lot. So how does it benefit anyone?

Didn't Saturn do that too? I think they are out of business now. I shopped them once and while it was less work, since I could go anywhere and get the same price, there was no wiggle room. I ended up buying a Pontiac Firebird after shopping many locations. Most noteworthy was that 2 salesmen from the SAME COMPANY BUT DIFFERENT LOCATIONS had the SAME deal whereas one offered me substantially more for my trade in. Why? His numbers were lower and wanted the sale. The other didn't

[TylerH860]

Saturn didn't have the product. Plastic junk.

Scion did have a product and the fixed price works well for them.

Of course there would be heavier factory incentives to liquidate the remaining previous year vehicles, and dealers could cut into that 5% margin all they want once it becomes an aged unit.

I think if you did a survey, 90% or more of consumers would rather have it this way. Most of the Managers and salesman I know are tired of the pricing and competition.

[aklim]

Originally Posted by TylerH860

Scion did have a product and the fixed price works well for them.

Of course there would be heavier factory incentives to liquidate the remaining previous year vehicles, and dealers could cut into that 5% margin all they want once it becomes an aged unit.

I think if you did a survey, 90% or more of consumers would rather have it this way.

Most of the Managers and salesman I know are tired of the pricing and competition.

But they are a young and small enterprise. Many items work in a certain market but not in a larger market. Why hasn't Toyota adopted it yet?

Not talking about previous year models or about to be aged. I am talking about the current model year car. If I had a bunch of them, I'd be more motivated to move them than a better selling one.

Hence the popular appeal of communism. I am making minimum wage. But of course, I would want all salaries to be averaged. If I am on top, not so good. Now, would those 90% still want it that way if the prices went up? I think not. I think most of them are too lazy to shop around. Take my example with the Firebird. I could have cost myself more on my trade in by taking the first guy simply because I was too LAZY to try another salesman in the same company but different location.

As to the managers and salespeople, did you ever ask them why they say that? I suspect they are tired of the competition as you mentioned. They would rather have less work when it comes to someone asking them to beat the other dealer price. Now they can say "The price you see is the price you get". No need to get creative or try to beat it.

[Hatterasguy]

Originally Posted by TylerH860

Owning a franchise is more about the service and used car revenue than new cars. There's no money in them anymore, too much competition and savvy buyers who only need to do a few minutes of research to be versed in price.

I believe all new car dealers should sell on a fixed, discounted price, and get paid a small percentage, 3-5% at the most. Where they can make their money is on financing, wholesale/used, and service.

If you look at a new Chevrolet pickup truck, the asking price is $40,000 for a mid level equipped 4x4 crew cab silverado. Ridiculous, but you feel good when they can give you $8000-10,000 off in dealer incentives and discounts. If they were all priced the same at the get go and HAD to stay there, alot less headaches for dealers.

The Toyota brand Scion is this way, and works well.

I couldn't agree more, Tesla also makes the argument that they don't really require any service so that profit area for a franchise wouldn't exist.

If you think about it what service does an electric car need? Brakes should last 100k+ if not the life of the car, maybe coolant every 5-10 years? Tires? Anyone can do tires.

[pj67coll]

Originally Posted by Hatterasguy

I couldn't agree more, Tesla also makes the argument that they don't really require any service so that profit area for a franchise wouldn't exist.

If you think about it what service does an electric car need? Brakes should last 100k+ if not the life of the car, maybe coolant every 5-10 years? Tires? Anyone can do tires.

I like the idea of getting rid of dealers but it seems somewhat impractical to me. Tesla is an interesting product but exclusively a rich persons, heavily subsidized toy. I hope they'll still be in business in a couple of years.

- Peter.

[MTI]

Originally Posted by pj67coll

I like the idea of getting rid of dealers but it seems somewhat impractical to me. Tesla is an interesting product but exclusively a rich persons, heavily subsidized toy. I hope they'll still be in business in a couple of years.

- Peter.

Their next gen product is expected to be priced considerably lower.