So, the Tesla model to sell its cars is through company owned dealerships only. Here's the story about NJ...

Elon Musk’s Battle to Sell Cars the Way Apple Sells iPads | LinkedIn

But I thought every car maker had company owned dealerships? Maybe I am naive on that point...

Specifically I thought Jag had some company owned dealers... ?

 

If only you could buy all new cars without the shenanigans of car dealerships...

 

I think they're franchises, not company-owned businesses.

And how pathetically over-protectionist. I can understand that, in a situation where a company has used dealers to establish a market presence, which involves considerable outlay & commitment on the part of the dealers, it would be unfair for the company to come in and start selling direct. But where a company has never had dealers, there is no-one to protect.

 

I think the CarMax dealerships are a step in that direction. At least, you walk in knowing your costs.

 

Talk about anti-free market and un-American; what they are doing in NJ. Consumers and tax payers are the ones feeling hurt on this. Manufacturers should be able to open up whatever dealership they want. Only thing that matters is what a manufacturer has agreed with to franchise dealerships on what is an exclusive territory for the dealership.

How the tax payers of NJ allow this to pass is just beyond me.

 

Yeah, but they (apparently, based on lots of gripes on this forum) know very little about performance cars. The fixed-price approach has its benefits and its downsides - they're just as uncompromising on trade-in prices.

 

This is true. Although, I think this approach works best for new cars.

 

It's actually an old piece of legislation, which I believe was passed when one or more of the big manufacturers came in and started selling direct. That put a lot of dealers out of business, leading to lack of competition - then the manufacturer could set whatever price they liked. So, consumers lost out.

There's a balance to be struck - this isn't it. If Tesla had encouraged dealers in NJ to (say) dump Ford and switch to Tesla, requiring them to invest in stock, training, facilities, etc., and then set up direct outlets in competition (with the margin advantages that a manufacturer has), that would be a Bad Thing. But they didn't - this is just the NJ dealers insisting they get a piece of all car-sales action in their state.

 

What the NJ MVC did is without question designed to protect existing dealers at the expense of the consumer. The idea that Tesla is somehow restricting consumer choice by not franchising dealers is laughable. It is also not a monopoly. There is absolutely nothing preventing any other manufacturer from making a similar car and marketing it in competition with Tesla. The fact that Musk has innovated... and built an excellent product are what allows him to charge what he is charging.

There are lots of different channel strategies. Costco goes from a pure retailer to selling more and more of their own brand stuff. Apple goes all the way from a clone strategy, selling through licenses, to selling all their own stuff mostly through their own stores. Chevron goes from independently-owned franchises to company-owned stations. You may have noticed the Internet - that has had a tiny impact on companies' retail and distribution strategies. To say that one strategy is the "best" is a reach.

The larger point is the state (NJ here) really has no role in this. It is not the state's money and the state does not live with the consequences of the business decision. If consumers don't like buying Teslas through Tesla stores -- because of price, warranty, service, or any other reason, valid or not -- no one is making them do it. There is no need for the the state to "protect" them. It's not like NJ can control the economy, weather, or human nature.

I was drawn to Christie when he first ran for Governor, partly because he was outspoken and partly because he was running against a man who was pure evil and corrupt. The more I read about Christie, however, the more he seems like just another smarmy politician.

 

Wow! Great evaluation and commentary. Total agree with every word written.

 

A cynic would suggest that Governor Christie has political friends who own dealerships. And that one of them wanted to add Tesla to the brands he carries.

And if anyone believes he had nothing to do with the bridge closures, they will want to check on the Brooklyn bridge being available for sale at a discount.

Increasingly, dealerships in a given region are more like conglomerates. They will take any brand. The result is that whatever brand you buy, you are still doing business with the same underlying business. Not really competitive at all at the consumer level.

 

I think it's bigger than protecting existing car dealerships. I think they are trying to kill the electric car!

 

Meh - it's just Joisey. A short drive to Philly or the Apple & you can buy as many Teslas as you want.

 

My better half and I went into a tesla store in Santa Monica last week. I asked the salesman several questions about the fires from obstructions, never got a straight answer. Regarding responses to other questions he spouted back book answers talking at us not to us or with us. I don't know what I expected from the visit but I came away unimpressed with the tesla sales process.

 

Agreed. This will not slow the sales of Teslas to bound-and-determined early adopters. They only need to fight it to keep from establishing precedent.

 

I test drove one a couple if weeks ago and the sales person walked us through the details of each reported fire (after I asked). Very open and helpful. Obviously party-line, but not evasive. I liked the drive, especially the acceleration! but was less impressed with the interior materials quality.

 

Well, a Model S configured the way I want it costs £86k here. If I wanted a fast 4-door, an XFR-S would be cheaper.

 

Big time

 

Christie is the Rob Ford of US politics. Is he on crack...? Tesla is an innovator and as such will have many battles to fight as people resist change.