Direct Sales Banned In New Jersey

[ECAJohn]

IMHO, this is an attempt at a money grab by the dealers association. $6,800 price tag leaves a lot of room for a dealer to bump up the price. I was going to put in my reservation this week too. Yet another hurdle for EM.

 

[Craig]

I don't know what the stated reasoning is, but I'll bet it's mostly about the 'Big 3' automakers stepping on the neck of perceived competition any way they can.

Nothing to do so much with the big 3. Like goofyone said, Having an extra 2 or 3 K added to your product is a negative when it comes competing against the other 2.

This is strictly a fight against the dealership association. JMO

 

[JP]

What ever happened to free markets?

 

[Craig]

What ever happened to free markets?

Compromised away over the last sixty years.

 

[HoofHearted]

http://techcrunch.com/2014/03/11/new-jersey-becomes-third-state-to-ban-teslas-direct-sales-model/

Just saw an article about how New Jersey just passed a law to ban the direct sales model that Tesla uses and that is very similar to what it sounds like Elio is planning on doing. Hopefully this doesn't gain traction in many other states or they'll have to rethink their sales strategy.

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The only good thing about the way new cars are distributed in America is that it keeps people busy who would otherwise be rifling through your silverware drawer while you are at the movies.

 

[Brainmatter]

Good point about it technically being a motorcycle. I don't know if the laws in any of the states mentioned differentiate between the two, but I guess if it is currently common for motorcycle shops to be owned by the manufacturers it would make it a lot harder for such laws to be passed that lumped them in.

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It's kind of a sticky situation. State laws govern 'vehicle' sales in MN (for example). Tesla successfully defeated a bill here that would have banned sales directly from the manufacturer. If the laws in any other states use the word "vehicle", then I believe the laws would apply to Elio as well, good or bad.

There is a lot more to consider though. Honestly, all major manufacturers 'own' the dealerships so to speak. Corporate offices dictate pretty much everything about the stores (right down to color of the tile in most cases) except final transaction prices. And for that they regulate by sales figures... you don't sell so much, you get fewer incentives and fewer vehicles allocated. That prety much forces the hand of the dealers to sell as low as possible.

Think about this: Do you think Honda would lower the MSRP on the vehicles if there were no dealers? I don't. It is the Manufacturers suggested retail price! The way the retail model works for cars is almost the same as it works for everything else: If you order a bunch at once you can negotiate a discount. Hopefully that results in a little for you (the dealer) and a savings for the consumer, just like at Wal-Mart. If I went to GM and asked to buy 1 new Corvette, they would probably want to charge me full MSRP. Also, under the 'factory owned' model the factory has to pay for sales centers. That cost gets added on to the final vehicle price as well. In a traditional dealership the owner paid for the bulk of the store.

Having spent a good portion of my life in or around dealerships I can say I am no fan of them, mostly because of the personalities typically found there. But they do serve a purpose. But for the most part, I honestly don't see what the fluff is about either way. That said, there should be no laws needed to force a company to sell one way VS. the other unless blatant violations such as price gouging or unfair market fixing against consumers have taken place. These laws are meant to prevent that, but honestly, the free flow of information available now days does a better job than any law IMO.

 

[RogWild]

If states use the word "vehicle"...... does it apply to bicycle sales as well? Since this initiative is from the Automotive Dealers' Lobby, I'll bet it is 'worded' to benefit THEM, and not so 'broad and vague' as to be ruled UN-constitutional.

 

[Kuda]

http://techcrunch.com/2014/03/11/new-jersey-becomes-third-state-to-ban-teslas-direct-sales-model/

Just saw an article about how New Jersey just passed a law to ban the direct sales model that Tesla uses and that is very similar to what it sounds like Elio is planning on doing. Hopefully this doesn't gain traction in many other states or they'll have to rethink their sales strategy.

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It will be interesting what Tesla does to combat the auto dealer lobby. I think Elio has
the political imperative on it's side in any dealer debate...........

 

[zelio]

It will be interesting what Tesla does to combat the auto dealer lobby. I think Elio has
the political imperative on ite side in any dealer debate...........

One of the earlier posts said that Arizona is one of the states with this law. Since Elio's current
headquarters are located in Phoenix they can start fighting this issue from home base. More power to them. I absolutely hate going to a standard auto salesroom. The sleaze factor seems to be overwhelming. Z

 

[Craig]

It will be interesting what Tesla does to combat the auto dealer lobby. I think Elio has
the political imperative on ite side in any dealer debate...........

The law was designed to protect current franchises‘, form the big 3 going rogue. Tesla has no franchises that need protecting. I think they will win.