> > How is that helping anyone but the dealerships?
> It's not.
That was my initial though as well, but I came up with at least one case where survival of the dealerships is critical to an open market place.
If all stores were owned by car manufacturers, that would be a significant barrier to entry of new automakers. Not only do new entrants have to build a car company, but now they have to create a new distribution network as well at the same time.
That said, Tesla is a new car company and creating a new distribution network for them does not seem that big an issue.
>If all stores were owned by car manufacturers, that would be a significant barrier to entry of new automakers.
Is that a barrier to Tesla? It appears a big potential barrier to Tesla (a new automaker) is in fact the dealerships and the law preventing manufacturers from selling directly. In this case it's helping to prevent new entrants into the industry.
How would vertical integration between car manufacturers and dealerships be a barrier to entry specifically, given today's tech? I think there would be new car entrants doing what Tesla is doing.
Then shouldn't the law simply ban such pricing practices? That seems like a less oppressive solution. Banning an important industry from selling its own products just sounds wrong.
Say for example there are five Chevy dealerships in the greater Omaha area. If General Motors were allowed to own one itself it could give itself discounts internally such that it could undersell the other dealers and put them out of business. Once the competition was gone it could then raise prices harming consumers. Competition is good for consumers and the laws in question are aimed at protecting consumers.
Yes I know they are also competing with other brands, but some people are brand loyal enough that they would not switch to Ford or Chrysler.
So there needs to be competition between sellers of a single brand, just because some people are so brand-loyal that they would refuse to switch brands to avoid being 'taken to the cleaners?' I'm not sure I agree with this sentiment.
You're also ignoring that the brand (e.g. Chevy) is selling to all of the dealerships. If they raise the price, the dealerships all have to pay if they want the car/truck/etc. Do the dealerships really have that much bargaining power?
Or General Motors gives internal discounts, that kills off the middlemen ("Chevy dealerships"), competition from other brands keeps the prices low. Competition is essential here, you can't just ignore it and state brand loyality.
In this case, the laws that keep dealerships alive are hurting you as a customer; the many testaments of bad experiences with deceiptful salesmen are evidence of that.
Interior design are like contractors -- they can make structural changes to physical structures as part of their course. I don't see it as at all ridiculous that they need a license any more than for general contractors. I frankly want to know that they've done some studying before they cut into my walls.
It would be bullshit if you were referring to interior decorators, but I don't think there's any certification or licensing to become an interior decorator unless you join an association or club that requires it.
No, it's not. It's saying that in certain states the definition of a car dealership precludes Tesla's current sales facilities (i.e., mall storefronts) from finalizing sales.
Tesla can still maintain these storefronts, and still negotiate and reach an agreement in principle in these storefronts. It simply can't finalize (i.e., sign the contract) in these storefronts. The reasons for this vary from state to state, so I won't even bother try to explain the justifications.
It's not.