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N. Carolina May Ban Tesla Sales To Prevent "Unfair Competition" 555

Posted by timothy
from the rento-polo-rento-polo dept.
nametaken writes with this excerpt from Slate: "From the state that brought you the nation's first ban on climate science comes another legislative gem: a bill that would prohibit automakers from selling their cars in the state. The proposal, which the Raleigh News & Observer reports was unanimously approved by the state's Senate Commerce Committee on Thursday, would apply to all car manufacturers, but the intended target is clear. It's aimed at Tesla, the only U.S. automaker whose business model relies on selling cars directly to consumers, rather than through a network of third-party dealerships. ... [The article adds] it's easy to understand why some car dealers might feel a little threatened: Tesla's Model S outsold the Mercedes S-Class, BMW 7 Series, and Audi A8 last quarter without any help from them. If its business model were to catch on, consumers might find that they don't need the middle-men as much as they thought." State laws imposing restrictions on manufacturers in favor of dealers aren't new, though; For more on ways that franchise operations have "used state regulations to protect their profits" long before Tesla was in the picture, check out this 2009 interview with Duke University's Michael Munger.
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N. Carolina May Ban Tesla Sales To Prevent "Unfair Competition"

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  • by LNO (180595) on Tuesday May 14, 2013 @09:55AM (#43720007)

    It's just more money-in-politics. The sponsor is State Senator Tom Apodeca, who received the maximum amount allowed ($8000) in campaign contributions from the North Carolina Automobile Dealers Association. Of course, they are AGHAST at the idea that they've got a financial stake in this...

    Robert Glaser, president of the dealers association, told the News & Observer that the law prohibiting Tesla sales isn’t just about his industry’s self-interest. Pointing to the Tesla representatives at a recent hearing, he said, “You tell me they’re gonna support the little leagues and the YMCA?”

    If that’s the real issue, then I may have some good news for all concerned: I asked O’Connell, and he assured me Tesla would be happy to support the little leagues and the YMCA if that’s what North Carolina requires in order to do business there. Problem solved! Right, Mr. Glaser?

    • I have a feeling hes sincere, and really doesnt get that it is almost always better when money for that sort of stuff is spent directly by community members rather than indirectly through a middleman. What if someone buying a car doesnt want to support the YMCA?

      • by fuzzyfuzzyfungus (1223518) on Tuesday May 14, 2013 @11:07AM (#43720977) Journal

        I hope for his sake that he's just a lying fuckwad; because if he said that sincerely, then he's dumber than a sack of hammers...

      • by cayenne8 (626475) on Tuesday May 14, 2013 @11:24AM (#43721233) Homepage Journal
        You know...I've never really understood the dealership model at all...at least, not in this day in age.

        Why don't manufacturers just set up their own storefronts, with a few models to try, and let you just do build to order. Seems like this model would save them money on inventory, etc...?

        I understand the dealership model in years gone by...but with todays tech and internet savvy mkt, why haven't they abandoned this in favor of a more streamlined, direct to consumer marketing/sales strategy?

        • by alexander_686 (957440) on Tuesday May 14, 2013 @12:26PM (#43721995)

          Here’s a link to a good story.http://www.npr.org/blogs/money/2013/02/19/172402376/why-buying-a-car-never-changes

          It auto makers were being launched today we might see something different, but you have 80 years’ worth of entrenched law that needs to be changed.

          The short answer is politics. Back when cars were first being introduced, there was a big power difference between the auto makers and the auto dealers. Auto makers would bully, threaten, and coheres the small business owners, so they struck back, and wrote state laws that tipped the power balance back to the auto dealers.

          Auto dealers are a lot like Real Estate agents, small family owned companies deeply embedded in the community and thus in politics. To get the laws changed you are going to need to convince the entrenched power that be to give up their power.

          • by voidptr (609)

            It's fine if you want franchise laws to protect existing dealers from their manufacturers. There's nothing wrong with a guarantee that after Bob's Dodge dealership spends a decade investing in the local market that Chrysler doesn't just move in next door and undercut him.

            Tesla however doesn't have any existing dealers to screw over, and making them sell through other brand's established dealers is a horrible conflict of interest. The legacy brands made their bed and need to lie in it, but they shouldn't be

      • by jellomizer (103300) on Tuesday May 14, 2013 @11:26AM (#43721259)

        It isn't nearly always better to buy directly.
        When you buy directly the cost savings of middle man usually goes to the producing company. As the Price the customer pays is often based on Supply and Demand.

        Also selling directly without using local vendors, you will need to expand your sales force to cover all the areas, and have to deal with a B2C model vs a B2B model. So your increase your own staff, which then will make your product much closer to the initial cost of selling to an other business at a discount and they mark it up by 10-20%

        For example Sun Microsystems, use to sell to vendors who then resold their products often with some sort of value add. Sun Got very popular by the late 90's and Early 2000's so they decided to expand their direct sells, often competing with their own vendors. To get the little extra margin per unit. But what Sun didn't realize was that a lot of the customers were comfortable dealing with the vendors (smaller companies felt like bigger fish, medium to large companies could almost control these guys) So with the Vendors getting hurt by Sun, they changed their tactics to other systems such a Linux or Windows NT as a viable alternative. By just changing their marketing from Suns Balanced TCO vs. Showing how cheaper hardware and OS can lead to faster systems with a different TCO calculation. So Sun popularity began to drop.

        I don't see Tesla as being unfair competition with other auto makers for selling directly, it is just their business model they will have to deal with the trade-offs and rewards for their choice. It isn't like the other companies who have independent dealers are suffering from it, as Tesla cars are not super cheap to be hijacking the market.

        • Also selling directly without using local vendors, you will need to expand your sales force to cover all the areas, and have to deal with a B2C model vs a B2B model. So your increase your own staff, which then will make your product much closer to the initial cost of selling to an other business at a discount and they mark it up by 10-20%

          They're selling their cars over the internet. There is no sales force, there are no vendors. The entire nationwide sales operation could be run by one guy with a php script. (But hopefully they have a bit more than that.) Welcome to the future.

    • by benjfowler (239527) on Tuesday May 14, 2013 @09:58AM (#43720055)

      Looks like a pretty blatant act of political corruption to me.

      The only REAL problem here, is that in the US, this kind of corruption is perfectly legal.

      • by TWiTfan (2887093) on Tuesday May 14, 2013 @10:06AM (#43720175)

        blatant act of political corruption

        In the South, we just call that "politics."

      • by j00r0m4nc3r (959816) on Tuesday May 14, 2013 @10:07AM (#43720191)
        I really don't understand why we still allow campaign contributions to specific politicians. IMO, this is the single biggest flaw in our political system currently. All contributions should be pooled and divided equally among all candidates. This should have been dealt with decades ago..
        • OK that sounds good at only the most cursory level. What happens when you've got Brad Pitt running against Igor in a world's sexiest man poll? Brad Pitt gets $1 million from giggling housewives and Igor gets $50 from his mom. Should both end up with equal financial backing? That's an invitation for any yahoo who can get their 10K signatures to ask for a cut of the pie.

          • What happens when you've got Brad Pitt running against Igor in a world's sexiest man poll? Brad Pitt gets $1 million from giggling housewives and Igor gets $50 from his mom. Should both end up with equal financial backing?

            Maybe Igor's mom is a billionaire, and gives him $50 million dollars instead. Does that still sound like a good plan?

            (Replace "Igor" with any actual politician and "Igor's mom" with any special interest group as necessary.)

        • by organgtool (966989) on Tuesday May 14, 2013 @10:39AM (#43720611)

          I really don't understand why we still allow campaign contributions to specific politicians

          I really don't understand why we still allow campaign contributions to anyone. You are right in that this is the biggest issue in this country right now because the effect of this is the complete subversion of the democratic process - politicians are creating laws that favor a minority of special interest groups at the detriment of all of the citizens those "public servants" are supposed to represent. This systemic form of bribery taints the vote of every piece of legislation that comes up which is why changing this needs to be our top priority. However, it is not an easy problem to solve since the only way to end private campaign contributions is to pass new legislation, which can only be done by politicians who have won and continue to win elections thanks to private campaign contributions. At this point, I think the only peaceful way to force this change is either directly through the use of a referendum or indirectly via a petition that a majority of the people sign that promises to vote out the current politicians unless they pass legislation that bans all forms of private campaign contributions. For the latter, you could either vote for the "other guy" during the election or vote out the current politician during the primary. One thing is for certain, though: they aren't going to fix this without extreme pressure from the voters.

          • by bkaul01 (619795)

            There are a few problems with that idea, the most obvious being constitutional protection of free speech, free association, etc. More fundamentally, you can't ban involvement in the political process and still maintain a free, democratic government.

            The only effective way to get money out of politics would be to get everyone in our culture to stop watching TV and become impervious to advertising. The reason campaigns cost as much as they do is that TV advertising is incredibly expensive, and that is because

      • by fuzzyfuzzyfungus (1223518) on Tuesday May 14, 2013 @10:17AM (#43720305) Journal

        Looks like a pretty blatant act of political corruption to me.

        The only REAL problem here, is that in the US, this kind of corruption is perfectly legal.

        It's a great pity. The US Foreign Corrupt Practices Act actually provides fairly robust(by the standards of white collar crime) penalties for companies that do business in the US and also engage in bribery in foreignistan or wherever.

        The 'Domestic Corrupt Practices Act', by contrast, does not exist.

    • This shouldn't be any surprise. It happens all the time in politics across the nation (heck, across the globe). This is yet another prime example of the perversion of impartiality through the channel of lobbying. I certainly agree that such tactics are underhanded. Perhaps we should change the term "lobbying" to "legalized bribery"
  • I would be happy to buy my car at a company which actually wants me to be a happy owner of that car, not a company which wants to make as much as profit from selling as many cars as possible.

    • by phantomfive (622387) on Tuesday May 14, 2013 @09:56AM (#43720031) Journal
      I just had a vision of being able to buy a car at a fair price without having to negotiate. How amazing this could be.
      • GM tried that (Score:3, Informative)

        by Anonymous Coward

        it was called Saturn.

      • by Nidi62 (1525137)

        I just had a vision of being able to buy a car at a fair price without having to negotiate. How amazing this could be.

        Auto auctions. Either go to them yourself, or find a broker that will do it for you (as some only allow "dealers" at auctions). We have gotten several cars at auction well below dealer price, and we told our guy what our price was, what colors/amenities we wanted. He would only bid on the combinations we wanted, and would stop at our price point. Might take a few trips, but it is worth it. Even with the broker fee (our guy only charges about 1500), we got cars $5-7k cheaper than what you would get from

      • by fuzzyfuzzyfungus (1223518) on Tuesday May 14, 2013 @10:11AM (#43720239) Journal

        That's crazy talk! How are you going to replicate the experience of good, honest, high-pressure salesmanship in a browser window? Or prevent the consumer from opening a second tab for comparison shopping purposes?

      • If you are a Costco member, this is the reality. Costco pre-negotiates prices with participating dealerships and the price is just a hair above invoice. There is no haggling, no back and forth. Just show your membership, then they go grab the Costco price, end of negotiation*. Even if you're not a Costco member, the internet has made negotiating new car prices much easier with sites like TrueCar.com. They publish what people actually paid for new cars and give you a guide to what is a a good deal (this
    • It's the Middle class that has traditionally had little choice in dealing the 'middle men', ie. salesmen, dealers, ect... Those of the 1% have their own private networks and make their purchases at or below cost. So much for consumer choice eh?
    • by TWiTfan (2887093) on Tuesday May 14, 2013 @10:04AM (#43720151)

      I don't understand how they're going to stop it anyway. Unless this law makes it illegal for an individual to buy a car from an out-of-state individual, how are they going to stop me from buying a Tesla (or any other new or used car) from any legal out-of-state vendor or individual? Are they going to stop me at the state line and slap the cuffs on me? Refuse to license any car in the state unless I can prove it was bought from an in-state dealer?

      • by dywolf (2673597)

        cause you didnt buy it from a licensed dealer.
        this will also stop person to person cragislist car sales.
        now you need a dealer for that too.
        we must close this auto show loophole!
        and national instant background check to make sure you are of a fit mind and abaility to operate a vehicle *
        for the children!

        (* satire aside, thats actually probably a good idea)

    • Either way there's profit involved, the question is whether the car dealership is an independent entity that gets a cut of the process or owned by the car manufacturer. I would rather deal with just one company than two that are constantly in conflict over who gets what share of the profits from sales and maintenance of vehicles.

      I don't understand the dealership model anyway - when you're the only Toyota dealer in a fifty mile radius and Toyota is having a banner year, you're all set. But if Toyota dealerships open all around you, then what? Or say you're a Saturn dealership, and then General Motors closes the brand. Or you're a Lincoln dealership, and Lincoln demands that you pay for a multi-million dollar remodel of your showrooms at your own expense. Or you're a Nissan dealership, and they release a run of shoddy products nobody wants to buy (for the sake of argument - I have nothing against Nissan). I guess it makes sense if you're already wealthy - open franchises for six different brands at once, and unless the economy tanks any losses in one place might be offset by gains elsewhere. But for someone launching an individual franchise? You are at the mercy of the manufacturer, choose carefully.
  • No middle man (Score:5, Insightful)

    by ZeroNullVoid (886675) on Tuesday May 14, 2013 @09:56AM (#43720029)

    Why have a middle man if they cannot offer any better deals or services? I understand it artificially creates jobs, but that seems like a horrible thing to force.

    This does not just apply to vehicles.

    If there is no value added and only cost added, then it is pointless. If there is value added, then consumers should have a choice for it.
    If the only value is creating jobs and expenses, then it is pointless and detrimental to progression, price, and capitalism.

    • Re:No middle man (Score:5, Interesting)

      by geekoid (135745) <`moc.oohay' `ta' `dnaltropnidad'> on Tuesday May 14, 2013 @10:00AM (#43720087) Homepage Journal

      yep, the middle mans job is to offer a service that the manufacture can't or doesn't want to do. Usually due to cost.
      If that cost goes away, so do middlemen.
      From what I have read, manufacture owned dealers in the past were always better for consumers then private owned dealerships.

      This is akin to not allowing digital books because they hurt book stores.

      • by TWiTfan (2887093)

        This is akin to not allowing digital books because they hurt book stores.

        Hush! Don't give them any ideas!

    • by Sockatume (732728)

      You may enjoy:

      http://www.npr.org/blogs/money/2013/02/19/172402376/why-buying-a-car-never-changes [npr.org]

      Basically, they've got too much political sway. Now, quite what political sway means in this context bemuses me. Yes, car dealers are big employers and provide a lot of tax revenue, but if you make them mad, what are they going to do? Move to the next state? Stop selling cars? Stop paying their taxes? They might, as a big employer, encourage their employees and customers to vote out the guy who had the temerity t

    • by srussia (884021)

      Why have a middle man if they cannot offer any better deals or services? I understand it artificially creates jobs, but that seems like a horrible thing to force.

      This does not just apply to vehicles.

      Government is the biggest middleman of them all.

  • Research Triangle area is practically the Silicon Valley of the south. ...and they're trying to Ban Tesla.
    • Who votes them in? The masses that go to the polls and vote for the guy that has the right letter after their name on the ballot or has the right opinion on a matter not up to a politician...
      • The state districts are gerrymandered to death - there is massive GOP over representation. The state is by popular vote teetering between democrat and GOP - moving inexorably to the former due to northern and external immigration.

    • by 0racle (667029)
      What makes you think RTP holds any political power in the state? It's such a small part of anything.
  • So, shockingly enough, this gem of free-market-capitalism is being pushed by the state's auto-dealers cartel. Their argument concerning Tesla's menace to the public strikes me as totally compelling:

    'Robert Glaser, president of the dealers association, told the News & Observer that the law prohibiting Tesla sales isn’t just about his industry’s self-interest. Pointing to the Tesla representatives at a recent hearing, he said, “You tell me they’re gonna support the little leagues a

    • by gtall (79522)

      There's no "gem of free-market-capitalism" here. It is simply what happens with politician meets money.

  • by 140Mandak262Jamuna (970587) on Tuesday May 14, 2013 @10:01AM (#43720097) Journal
    Creating a company costs some 150$ or so. Can Tesla Motor Corporation set up a wholly owned subsidiary Tesla Motor Sales and Service Corporation of North Carolina and sell it through them? Corporations are people, but it is lot harder (and more fun) to create real people than corporations.
    • Re: (Score:2, Informative)

      by Anonymous Coward

      Sate laws dictating that car dealers cannot be owned by the manufacturer. Every state has them.

    • by SmallFurryCreature (593017) on Tuesday May 14, 2013 @12:12PM (#43721809) Journal

      That is basically company owned dealerships, they have existed for a long time and the decent ones were a FAR better deal if you just wanted a good car for a fair price with good service.

      BUT it ties the car company to the vagaries of the local car market including having to worry about brick and mortar store issues like location.

      For a very common large scale car maker, it is barely do-able. For a niche market? There is in Holland 1 Ferrari dealer. But that is not the issue because people in the market for such a car don't have an issue traveling a bit in their luxury car and are in any case likely to be living in the west part of Holland (the store used to be in Utrecht, which is almost dead center for the economic heart of Holland).

      But it is FAR FAR easier to serve all you need to serve with a web site and a service van. If Tesla has to open a shell company in every state, in every country in every county/province, that is a LOT of shell companies. And why should it? Amazon doesn't have to do it. Why should car dealers not face pressure from web stores? Especially since dealers COULD have a unique location issue, fixing your car.

      This is clearly bought law. The US has the right to bear arms. Stop killing kids with your guns and kill yourselves some politicians instead. Or are the guns you carry just to compensate for your small penisses. Come on US, show us why you got more guns then citizens.

  • Interferes with interstate commerce.

  • Remember kids: Government regulation is bad. Unless, of course, that regulation is to protect a cartel. Then, by golly, it's A-OK.
    • by arcite (661011)
      Yup, and we all know that the BIG car dealers are the sacred cows. Tesla is up to the fight I wager....
  • Too bad (Score:4, Insightful)

    by Nidi62 (1525137) on Tuesday May 14, 2013 @10:04AM (#43720145)
    The problem with being the man in the middle is that, sooner or later, you are going to get cut out. All you are doing is adding costs to the customer and reducing profits for the manufacturer. You can't expect your free ride to go on forever, especially in the days of easy price comparison by consumers and profit maximization by manufacturers.
  • Cherry-picking (Score:5, Interesting)

    by MachineShedFred (621896) on Tuesday May 14, 2013 @10:06AM (#43720177) Journal

    So it outsold the 7-series (top end full-size full-luxury sedan), the S-class (top end full-size full-luxury sedan) and the Audi A8 (full-size full-luxury sedan), which even BMW, Mercedes, and Audi would admit make up a small fraction of their overall sales, and this is a win?

    When you outsell the 5-series, the E-class, and the Audi A6, then you'll have something to talk about, as all three manufacturers sell an order of magnitude more of those.

    • Re:Cherry-picking (Score:5, Insightful)

      by drinkypoo (153816) <martin.espinoza@gmail.com> on Tuesday May 14, 2013 @10:15AM (#43720273) Homepage Journal

      When you outsell the 5-series, the E-class, and the Audi A6, then you'll have something to talk about, as all three manufacturers sell an order of magnitude more of those.

      Well no, when they accomplish that then they won't need to say anything. But they have something to talk about now, because the Tesla vehicle is outselling its competition. They're not yet outselling cars out-of-class, but give them time.

    • by Anonymous Coward on Tuesday May 14, 2013 @10:18AM (#43720319)

      Yeah, when Ferrari and Lamborghini outsell the 5-series and A6, then those companies will truly be something meaningful.

    • by rgbrenner (317308)

      Q1 2013 - cars sold
      BMW Group (BMW + Mini + Rolls Royce): 448,200
      Audi: 369,500
      Mercedes: 341,511
      Tesla: 4,750

      http://beta.fool.com/sarfarazis/2013/05/08/audi-vs-mercedes-who-is-winning/33384/ [fool.com]
      http://www.bmwblog.com/2013/05/02/bmw-group-reports-first-quarter-revenues/ [bmwblog.com]

      • When Tesla makes a car in the same category as the 3-series, your statistic will become relevant.

    • by ganjadude (952775)
      The tesla is in the price range of the higher class cars, which would explain comparing them
    • Re:Cherry-picking (Score:5, Informative)

      by organgtool (966989) on Tuesday May 14, 2013 @10:51AM (#43720795)

      So it outsold the 7-series (top end full-size full-luxury sedan), the S-class (top end full-size full-luxury sedan) and the Audi A8 (full-size full-luxury sedan), which even BMW, Mercedes, and Audi would admit make up a small fraction of their overall sales, and this is a win?

      The Model S is a top-end full-size full-luxury sedan. It makes complete sense to compare it to the top-end full-size full-luxury sedans of the incumbent manufacturers.

      When you outsell the 5-series, the E-class, and the Audi A6, then you'll have something to talk about, as all three manufacturers sell an order of magnitude more of those.

      The fact that they were able to outsell any manufacturers in any series during their first attempt at a car in this class still says a lot. Given that this is their second success (the first being the Roadster), and that each success is building on the last, I think that the future of Tesla Motors is very bright and judging by the stock price, so do many others.

  • and the argument in TFA from Glaser is that somehow dealerships are vital for things like recalls, malfunctions and service. Recalls and malfunctions are widely visible through Technical Service Bulletins that places like Firestone actually have a system to track. problems are fixable by any local garage, partly because the government tracks them. Taking your car to a dealership for service might happen once or twice, but the local garage is closer and likely more a part of the community than the regiona
    • by ganjadude (952775)
      I think the point is that the manufacturer would be less willing to come forward with the information to initiate a recall over a 3rd party.
  • by EXTomar (78739) on Tuesday May 14, 2013 @10:12AM (#43720249)

    One of the biggest sources of revenue comes in from sales and licensing of new vehicles where over time dealership industry is powerful on the state level due to this relationship. When dealers make money, the state gets serious revenues. So when a new type of car comes along with a company who can't afford the high barrier of entry to setup a dealer network the whole thing turnes into market protection in the guise of customer service. If you are interested in buying a Tesla and living in a city with a center, you can go there but it is like bizzaro land because they are forced to operate as a "service center" instead of a "dealership" subject to fees and zoning that are often waived or offset for "real dealerships".

    It is stuff like this that makes me wish the market would be dragged into the 21st Century. Shopping for a car is one of those tasks that is slightly higher than "doctor visit". There is little to no value added for going to the dealership so I would rather just order directly from maker themselves than to sit through the junk you need to do for a purchasing a car.

    • by drinkypoo (153816)

      It is stuff like this that makes me wish the market would be dragged into the 21st Century.

      You mean, we get high-speed rail and PRT and nobody* is buying their own cars any more? I wish for that every day.

      * OK, just as some people had private rail cars, some people will have private PRT vehicles. It'll be much more expensive than using a public one, but probably not too different in cost from buying an EV today.

  • against the free market , guess who's going to win this one?

    http://www.stateintegrity.org/north_carolina [stateintegrity.org]

    http://clclt.com/theclog/archives/2010/05/13/nc-more-corrupt-than-even-sc-and-louisiana [clclt.com]

    http://www.thedailybeast.com/galleries/2010/05/09/the-most-corrupt-states.html#slide5 [thedailybeast.com]

    No... it's not that the multimillionaires who own auto dealerships can't stand a new entrant with a novel product that makes their look expensive, dirty and lame. It's that they're worried about the integrity of the market place.

  • Pointless Summary (Score:5, Insightful)

    by fermion (181285) on Tuesday May 14, 2013 @10:23AM (#43720399) Homepage Journal
    This has nothing to with anything other than historical laws to solve past problems. These laws are essentially set up to protect local 'small business' from corporate interests. It sound quaint, but one must look at this in the context of selling cars in the 1940's and 1950's, and even the entire climate at the time. There was no Walmart killing main street, there was no Costco cutting deals with the consumer, and no Starbuck serving corporate consistent coffee. And there few if any sophisticated auto consumer. So laws were past in most states that protected the local dealership from the larger auto manufacturing companies.

    So the auto manufacturers created the franchise system, essentially to get around the laws. This is little different from McDonalds. The manufacturers pretty much control the operations, and in return offer kickbacks. The only way around this is the used market. It is probably, in the current climate, inefficient. It is probably one factor that makes american car makers less competitive, having to support the dealer network. OTOH, it is good for the manufacturer and consumer because you can go to any dealer who sells new fords and know you will get basically the same thing as any other dealer.

    The thing is we probably should not change laws for an individual, which is what Tesla is asking some states to do. If there is good reason to make the change, then make the change general. What is happening is that in some states the law is changing so that only Tesla or a company very similar to Tesla will benifit. THis is probably a not good thing.

  • I don't think this would survive a court challenge. US federal law governs these activities, not state law. The Interstate Commerce Act has been in effect since the railroad industry in the 19th century.
  • by stevegee58 (1179505) on Tuesday May 14, 2013 @10:26AM (#43720435) Journal
    As a former NC resident I can vouch for how collusive the car dealerships are there. People were going out of state to buy cars in areas with real competition.
  • by brit74 (831798) on Tuesday May 14, 2013 @10:30AM (#43720487)
    A few months back, NPR's Planet Money did an episode on the car dealership business and how entrenched they are with the government. It goes back for decades. It's worth a listen.

    "Episode 435: Why Buying A Car Is So Awful"
    http://www.npr.org/blogs/money/2013/02/12/171814201/episode-435-why-buying-a-car-is-so-awful [npr.org]
    • by brit74 (831798)
      And a related article from Planet Money:

      "Why Buying A Car Never Changes"
      http://www.npr.org/blogs/money/2013/02/19/172402376/why-buying-a-car-never-changes [npr.org]

      An excerpt:

      "Buying a car sucks," Scott Painter says. "It's something that most consumers fear."

      Back in the '90s, Painter started a company to try to change this. "The name of the company was Cars Direct," he says. "The mission was to sell cars directly."

      Painter wanted his company to build virtual dealerships that would let people go online and

  • by peter303 (12292) on Tuesday May 14, 2013 @10:37AM (#43720591)
    A US state cannot arbitrarily ban a good or service from another state in Article 1, sections 9 & 10. Only the federal government has this power to regulate interstate trade. This was one fears during the early years of United States that states might shut out each other, so it was banned.
  • by Coop (9778) on Tuesday May 14, 2013 @10:44AM (#43720693)

    Car dealers already take in skimpy profits on new-car sales, as consumers are able to use the internet to find out what dealers pay for a car, plus the sales-based quarterly/yearly bonus money that the manufacturer gives them. So increasingly the negotiations are up-from-cost rather than down-from-sticker.

    So the parts and service departments are where most of the money is made. But guess what? New cars don't need much service, used ones last a long time too, and parts are also available over the internet. A future with many electric cars also suggests that parts & service will see declining revenues.

    Younger generations aren't into cars the way older ones were, so the "superconsumers" are going away. Add all this up and I just don't see how the industry will support anywhere near the number of car dealers that it did in decades past. Getting rid of Pontiac, Hummer, etc. removed some capacity but there's still a long way to shrink.

  • > State laws imposing restrictions on manufacturers in favor of dealers aren't new

    No shit. We have similar here in MA in relation to Alcohol, but one step worst. Instead of forcing sales through retail outlets, it forces the retail outlets to buy from licensed distributors.

    So if Tesla started making wine, it would have to be bought buy a distributor before a liquor store here in MA could buy it and offer it for sale. Really nice racket. Now they are scrambling to make sure they get a similar middleman installed for the upcoming pot legalization.

    God forbid they don't find a way to give their big donors a taste of the action. To think people might profit without cutting in the people who made donations to political parties. Such a travesty cannot be allowed!

  • by Dr. Spork (142693) on Tuesday May 14, 2013 @11:04AM (#43720941)
    Oh, I would be so happy if the internet killed car dealerships! Yes, there are some industries hurt by the internet age that I mourn, like local book stores. But if car dealerships just die, I won't miss them at all. I won't miss their loud, stupid advertisements on TV, but I especially won't miss the ugly way in which they use valuable real estate in populated areas. American cities would work so much better if they used space more wisely and became generally denser. Car dealerships are one of the most important plagues that is keeping that from happening. Fuck them and their useless sprawling parking lots. There is nothing socially redeeming about them at all. I hope that car companies in the future make a move like Apple, and have something like a Mazda store in the local mall. It would basically be a showroom in which the cars are presented like jewels, with salespeople and mechanic "geniuses" that could chat up customers, as well as curious mallgoers who got hypnotized by the shiny things. They could have a back exit to a portion of the mall's underground parking lot where they have a few more cars that can go out for a test drive. Their maintenance and repair could be done by an authorized mechanic shop with a contract. That needs some land, but much less than a dealership. Really, there is no reason for traditional parking lot car dealers to live, and many great reasons for them to die.

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