[digikata]

If a dealership middle man is providing so much value to the customer, why then does it need any legislative protection? Real estate agents are a bad example, as that industry is also dug in with legislative protections against more competitive business models.

[kyrra]

NPR said it was due to Ford and other auto makers back in the 1920-1930 bullying dealerships. Ford threatened to cancel their business contracts with dealership if the dealerships didn't buy cars that they knew they couldn't sell. During that time, Ford kept their lines running at full capacity even though demand didn't warrant it. The states decided to step in and protect their local dealerships from the megacorp that was Ford and the other manufacturers of that time.

The auto makers of back then dug their own grave with their business practices.

Another argument I've heard is about sales tax. If an auto-maker could sell direct to customers, it could (possibly) be treated as interstate commerce and avoid directly collecting the sales tax. So it's in the state interest to keep dealerships around.

[digikata]

I understand the history, but in today's commerce environment the middle-men industries should provide their own value without legislative props, or they had better have a unique line of reasoning that is relevant to the modern world.

If you have a building or lot where people have to go to physically see the car (as Tesla does provide BTW), then it's difficult to imagine how sales tax would be avoided.

[stcredzero]

NPR said it was due to Ford and other auto makers back in the 1920-1930 bullying dealerships.

Why in heck do we let software companies bully OEMs?

[Jtsummers]

A large part of the MS anti-trust suit in the US was over the pressures they placed on OEMs. An example, BeOS was going to be licensed to Compaq. MS pressured them by threatening to raise the cost of OEM licensed copies of Windows, which would have severely eaten into the profit margin of an already narrow-marginned industry.