Direct Sales Banned In New Jersey

[goofyone]

The direct sales issue won't be a problem. With direct sales, that which you ordered gets shipped directly to your home. That's what Tesla is doing. Their "showrooms" are operated like an art gallery. You go there, see what you like, then go home and order it to be shipped to your home. However, that's not what Elio is doing. As per their site:

"Delivery: Once you make your choice of transmission, color, etc, we go to work fast and hard. We will have your new Elio cleaned and ready with options installed and back to the Retail Center within 24 hours of the order!Our distribution centers are designed to move Elios...lots of Elios, quickly, efficiently, and damage free. That is part of our commitment to you. Further, we are working on that fantastic “Factory Pick-up” program we mentioned earlier. Details are to follow, but this delivery involves a tour of the plant in Shreveport, Louisiana and more."

The Elio model will be no different really than what other manufacturers use. Even some the major companies allow you to order online and receive it through the nearest authorized dealership.

I think you need to go back and read the thread through a little more closely. The definition of 'direct sales' in this context is vehicles being sold directly by a manufacturer instead of through franchise dealerships. That's what the laws in several states are targeting and this would hurt Elio as, as you found, they want to be able to open retail center where they sell you a car directly and not through a franchise network.

You actually have it backwards as the Tesla 'art gallery' concept as you described is what Tesla uses to get around these laws in some states. In most states you can walk into a Tesla showroom and sign the purchase papers on the spot then you come back and pick it up and they will walk you through the vehicle. This is exactly like the Elio purchase concept which Elio is basically trying to copy from Tesla.

 

[Velnias]

I think you need to go back and read the thread through a little more closely. The definition of 'direct sales' in this context is vehicles being sold directly by a manufacturer instead of through franchise dealerships. That's what the laws in several states are targeting and this would hurt Elio as, as you found, they want to be able to open retail center where they sell you a car directly and not through a franchise network.

You actually have it backwards as the Tesla 'art gallery' concept as you described is what Tesla uses to get around these laws in some states. In most states you can walk into a Tesla showroom and sign the purchase papers on the spot then you come back and pick it up and they will walk you through the vehicle. This is exactly like the Elio purchase concept which Elio is basically trying to copy from Tesla.

Incorrect. It's exactly that Tesla sales model that is causing their issues in states like New Jersey. I did read up on it, and it is just as I said, that model of sales Tesla is using is what the problem is, not it's solution. No, it's not the same as what Elio is doing. With Tesla you can not make a purchase at their centers, you do not talk to a representative or sales person. There is no sales going on at those centers, just viewing. That's nothing like what Elio is doing. Elio is doing the retail centers where they will be bought and sold from with Elio trained personnel. This is more like what auto and motorcycle dealerships are currently doing.

 

[Velnias]

Just to point out another clipping from their page:

"These Retail Centers will be stand-alone sales locations run by Elio-trained employees," - This is basically what Harley Davidson currently does. So I stand by my first statement on this is not the same issue as Tesla. I may be proven wrong in the future, but let's hope I'm right.

 

[goofyone]

Incorrect. It's exactly that Tesla sales model that is causing their issues in states like New Jersey. I did read up on it, and it is just as I said, that model of sales Tesla is using is what the problem is, not it's solution. No, it's not the same as what Elio is doing. With Tesla you can not make a purchase at their centers, you do not talk to a representative or sales person. There is no sales going on at those centers, just viewing. That's nothing like what Elio is doing. Elio is doing the retail centers where they will be bought and sold from with Elio trained personnel. This is more like what auto and motorcycle dealerships are currently doing.

Tesla's gallery model is only limited to certain states. In other states the stores may look like galleries but they do have a full service sales staff and many have service centers nearby.

http://www.teslamotors.com/findus/stores

Excerpt form article here: http://www.fool.com/investing/gener...sey-bans-tesla-arizona-may-give-green-li.aspx

"Currently, Tesla operates in a gallery model in Maryland, Texas, Arizona, Virgina, and (most recently) New Jersey, where state laws prevent Tesla from taking orders, discussing price, or giving test drives (except in Maryland, where test drives are allowed). It's unlikely that changes in Tesla's favor in these other states will happen rapidly; auto dealer lobby groups will continue to flex their muscle and fight against bills like the one being considered in Arizona."

 

[goofyone]

Just to point out another clipping from their page:

"These Retail Centers will be stand-alone sales locations run by Elio-trained employees," - This is basically what Harley Davidson currently does. So I stand by my first statement on this is not the same issue as Tesla. I may be proven wrong in the future, but let's hope I'm right.

Harley Davidson operates via a traditional franchise model where the stores are independently owned and operated just like car dealerships.

http://www.harley-davidson.com/en_U...ing_a_dealer.html?locale=en_US&bmLocale=en_US

 

[Neal]

....... that model of sales Tesla is using is what the problem is, not it's solution. .......

Not debating the whole issue of whether Elio and Tesla have the same model. I do think that Tesla is not the problem, though. I think that the idiotic laws backed by the dealership association is the problem.

 

[Brainmatter]

Harley Davidson operates via a traditional franchise model where the stores are independently owned and operated just like car dealerships.

http://www.harley-davidson.com/en_U...ing_a_dealer.html?locale=en_US&bmLocale=en_US

Kudos Goofy. So far every response you've given is spot on.

The only unknown for me is whether or not these same franchise laws, which vary state to state, apply to vehicles classified as motorcycles. I imagine that too varies state to state. It's alphabet soup out there.

Harley is a bad comparable all around. They are a bit different in the motorcycle world. Harley runs their dealerships like auto dealerships because they want total control of their market. In most cases, Honda for example, has no problem with their dealers selling Suzukis, Yamahas, etc. right off the same show floor and vice versa. In Harley land that is a big no-no unless you are a very, very big dog.
If you want a Harley dealership, you play by Harley rules. If not there are 20 guys at your back who will build a new dealership to get the franchise. Same for every new car dealership in a major market in the nation. A lot of it in 'car land' is because of what Neal points out above: The dealership association has outlived its purpose and has become an entity onto itself and stifles real competition, but that's a whole 'nother topic.

I'm not sure but I'm fairly certain I've seen where you can buy motorcycles direct from the manufacturer in some cases. Chinese bikes for example. Hopefully it's a loophole the elio can get through. If not it's not the end of the world, but definitely not optimal for the consumer.
In the end Tesla has proven that there are States where other loopholes indeed exists (like MN). Elio will be for sale somewhere from a factory owned store.

 

[goofyone]

Kudos Goofy. So far every response you've given is spot on.

The only unknown for me is whether or not these same franchise laws, which vary state to state, apply to vehicles classified as motorcycles. I imagine that too varies state to state. It's alphabet soup out there.

Harley is a bad comparable all around. They are a bit different in the motorcycle world. Harley runs their dealerships like auto dealerships because they want total control of their market. In most cases, Honda for example, has no problem with their dealers selling Suzukis, Yamahas, etc. right off the same show floor and vice versa. In Harley land that is a big no-no unless you are a very, very big dog.
If you want a Harley dealership, you play by Harley rules. If not there are 20 guys at your back who will build a new dealership to get the franchise. Same for every new car dealership in a major market in the nation. A lot of it in 'car land' is because of what Neal points out above: The dealership association has outlived its purpose and has become an entity onto itself and stifles real competition, but that's a whole 'nother topic.

I'm not sure but I'm fairly certain I've seen where you can buy motorcycles direct from the manufacturer in some cases. Chinese bikes for example. Hopefully it's a loophole the elio can get through. If not it's not the end of the world, but definitely not optimal for the consumer.
In the end Tesla has proven that there are States where other loopholes indeed exists (like MN). Elio will be for sale somewhere from a factory owned store.

The good news for us is Tesla has a lot of money to work on this issue and is even starting to use construction of their new battery factory as leverage over states like Texas and Arizona.

 

[Velnias]

Nothing on their site says they won't be separately owned. My point was that Harley trains the people at their dealerships and still has a role to play in them. From what Elio has on it's site, it looks to be the same setup: stand-alone retail centers with Elio trained people. Doesn't state that it will be owned and operated directly by corporate headquarters.

 

[Velnias]

Kudos Goofy. So far every response you've given is spot on.

The only unknown for me is whether or not these same franchise laws, which vary state to state, apply to vehicles classified as motorcycles. I imagine that too varies state to state. It's alphabet soup out there.

Harley is a bad comparable all around. They are a bit different in the motorcycle world. Harley runs their dealerships like auto dealerships because they want total control of their market. In most cases, Honda for example, has no problem with their dealers selling Suzukis, Yamahas, etc. right off the same show floor and vice versa. In Harley land that is a big no-no unless you are a very, very big dog.
If you want a Harley dealership, you play by Harley rules. If not there are 20 guys at your back who will build a new dealership to get the franchise. Same for every new car dealership in a major market in the nation. A lot of it in 'car land' is because of what Neal points out above: The dealership association has outlived its purpose and has become an entity onto itself and stifles real competition, but that's a whole 'nother topic.

I'm not sure but I'm fairly certain I've seen where you can buy motorcycles direct from the manufacturer in some cases. Chinese bikes for example. Hopefully it's a loophole the elio can get through. If not it's not the end of the world, but definitely not optimal for the consumer.
In the end Tesla has proven that there are States where other loopholes indeed exists (like MN). Elio will be for sale somewhere from a factory owned store.

That was my point in the comparison. That Harley has more control over it's dealerships in general. Yes, they have local owners, but they, like authorized car dealerships, have to play by Harley's rules, be trained by HD, and get certified by them. Most car dealerships are the same way, they have to go through the manufacturer to be an "authorized" dealer for that make. If you read what Elio is saying, they are setting up the same thing. Stand alone retail centers where people trained by Elio will sell their products, including parts from their suppliers for personalizing the vehicle. This is NOT direct sales the way Tesla is doing things.