Question of the day: Do we really need car dealerships?
Tesla Motors wants to change the way we power our cars. But first it wants to change the way we buy them.
This year Tesla has faced off against the National Automobile Dealers Association (NADA), a trade group that represents car retailers, over Tesla's right to sell cars through its websites and manufacturer-owned stores. Tesla calls them showrooms—a way, we presume, to circumvent existing laws regarding franchises. NADA is having none of it. It wants to protect the dealership system, and is even fighting in some states to ban Tesla from selling its own cars directly to customers. In scoring a number of court victories, Tesla has codified its right to circumvent state laws and keep a tight control over the retail experience for any potential customers of the Model S.
Visiting a car dealership is a miserable experience that probably ranks somewhere between an IRS audit and a colonoscopy on many people's activities' list. So Tesla's fight got us wondering: Is there any benefit from the current system, which grants dealers an exclusive retail monopoly on what's likely to be one of your largest purchases? Or is this just a case of the powers that be digging in to protect their interests?
Considering how many retail outlets are being threatened by the digital age -- everything from book stores and video stores to, yes, newspapers that retail information -- the remarkable thing is that it took this long to even ask the question. Middlemen are quickly becoming a relic of the past.
And the overall answer, I think, is that no we don't. Yes, some things will be lost, like the go-to expert who knows the quirks and oddities of the brand you bought from him. And an argument can be made that car dealers make themselves valuable, contributing members of the community (as do many other retailers). But I'd just as soon give up the hassle and the added dealer-profit expense and do my own thing. Anything I don't know I can find out. And what about the less-than-savvy non-Internet users? Caveat emptor, man.