I don’t understand why it evolved, that car companies sell cars through franchised dealers. Apparently there is a requirement that retail car dealers be set up as franchises, and that the manufacturers are required to sell through franchised dealers.
Anybody know why this is? Does a retail car dealer have to be a franchise? What about all the independent used car lots which sell many different brands of cars?
They overlook the fact that if you want to register your Tesla in MI you will still have to pay the same sales tax.
Most states do have strong laws protecting the rights of Dealers..from the consumers and from the manufacturers. They are a powerful lobby just like real estate brokers.
Dealerships are franchises. The car company has lots of control over how the dealership looks and runs. The dealership is the face of the car company so this makes sense.
I wrenched my way to shop foreman in three different dealerships. I now spin my wrenches for an independent shop. Car dealerships are the most wretched hives of scum and villainy outside of government.
I have no use for Tesla and government subsidized electric cars. But the no dealership model is a good idea. As long as factory trained technicians and parts suppliers are available for warranty work, I side with Tesla and free market folks.
“Anybody know why this is?”
If you buy a Ford that is crap do you take it back to the dealer, or haul it to Detroit?
Would you haul that Tesla back to California, or wherever that POS is made?
The law was to protect consumers.
“Anybody know why this is?”
Don’t know the details, but money is probably involved.
There used to be dozens of car manufacturers, and since 1900 probably 200 short-lived manufacturers have come and gone nationwide. In the Grand Rapids museum one can see the presumably sole surviving example of the Lorraine (not the same as the European company with a similar name), for example. The Ford Museum in Dearborn has lots of models from vanished companies, including better-known premium vehicles like a Cord and a Duesenberg (last time I was there, they were right next to each other).
The upshot is, people bought everything through catalogs at one time, at least they did out here on the frontier, and that included houses. Cars by fly-by-night builders (even if that was not their intent) screwed customers. Having a dealer network was a necessity even from a marketing standpoint.
‘Pep’ Tucker gave my dad a ride to show off his model (Tucker drove, dad rode shotgun) during his tour of the country to sign up dealers. His preferred place to pitch was in gas stations, because they were everywhere and already had service bays. If he came through this little place, he must have really covered a lot of country.