Car Dealerships Get Nervous With Tesla Selling Directly
The dealership model that sales gasoline cars day after day hasn’t changed much since its inception. Someone walks in, a car salesman shows what they want, and then shows them a better, more desirable model. The deal is usually sealed. Sounds over-simplified but a walk to most dealerships will show you this time tried system. So why haven’t car dealerships embraced alternative energy cars to boost sagging sales and the deplorable image they suffer from?
Would You Buy A Car From Them? Sadly enough, car dealerships and the buying process is not a good experience for most people. Visionaries have tried to change sales model and Apple has certainly succeeded in the impossible task, selling directly to its clientele while being in charge of the customer experience. Most car dealerships however are stuck in time. So how can Tesla challenge the car selling business model and is it doing it?
Over two years ago, former Apple Executive George Blankenship became the Tesla Motors Vice President of Design and Store Development. Since then, he has built a strong retail strategy and network for the company. In co-writer David Herron’s piece a few weeks ago: Tesla's transformation of automobile service stumbles in Massachusetts. David points out how Tesla’s sales and service model don't always agree with local laws, nor a few dealer associations in some states, including a state regulator that even goes as far as saying Tesla's stores violate state franchise laws that prohibit factory ownership of dealerships.
Massachusetts Takes Offense. The Massachusetts State Automobile Dealers Association, via its executive vice president Bob O'Koniewski says in AutoNews: "If a manufacturer sees that Tesla is successful with this kind of business model, who's to say they don't break out their own EV product lines and create a separate system that bypasses dealers? It's extremely problematic.". Bypass dealer, extremely problematic, those words explain what a thorn the Tesla model has become for lethargic car dealerships.
Tesla Is Not Alone. Tesla is not alone, since BMW is also becoming a point of contention. The New York State Automobile Dealers Association concerned about the company’s new disruptive business sales model has asked dealer lawyer Leonard Bellavia to write a report on the eventual threat of the BMW direct-to-consumer sales model. So far, BMW said it would distribute its i-cars through U.S. franchised dealers, avoiding any confrontations.