You can tell the heat is on with traditional dealerships when they all band together to claim that a new sort of store, mainly the Tesla “stores” and “retail stores” are illegal. The 17 stores in 10 states and in the District of Columbia recently opened by Tesla are coming under the gun by dealers who want to keep the dealership experience intact across the board for all automakers. In Illinois, Tesla has been told it is illegal to list CEO Elon Musk as the store’s owner in Chicago. The New York Automobile Dealers Association is also looking to open legal proceedings to shut down these “stores”. The dealers are speaking out about why they are having problems with Tesla’s business model.
“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?” said Bob O’Koniewski, executive vice president of the Massachusetts State Automobile Dealers Association. “It’s extremely problematic.”
“Tesla may not yet recognize the value of the independent, franchised dealer system, but as its sales increase, NADA is confident it will re-examine its business model,” Montana dealer and NADA Chairman Bill Underriner said in the statement. “Other companies such as Daewoo did. All companies should be complying with existing laws in the same way dealers are required to.”
George Blankenship, Tesla’s vice president of sales addresses these concerns with talking about how Tesla just want to focus on providing a great customer experience and is not trying to change the auto retailing industry. “That’s the last thing on our agenda,” Blankenship said. “We just want to locate in high-traffic locations and interact with people when they are specifically not thinking of buying a car. We have no motivation to change the laws or how the car industry does its business.”
Seeing how many people can’t stand to go into dealerships and suffer high sales pressure, Tesla might be onto something big. While it might hurt dealerships in the process is the bottom line issue.
Source Auto News