Dealership model vs. direct sales?

[SwampNut]

I've been considering a Mercedes Smart, maybe electric, maybe ICE, as a backup for our Tesla. We work from home, so two vehicles are rarely necessary. And I have a motorcycle too. So there's not a strong need for a second vehicle. Anyway, before shopping, I set up a temporary phone number that only goes to voicemail, and a new email address. Because of the forced START TEXTING AND CALLING IMMEDIATELY AND DON'T RELENT!!! model of business, this is necessary. I would never give any business my cell number, but especially a car dealer. And -- shocker -- the temp number I made is now full of text spam. SHOCKED!

The most Tesla ever did during our shopping was send follow up emails a week apart. THAT is how you respect customers.

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[SwampNut]

I was thinking more about the service side of things.

Every other time I'd go for service, some sales droid would want to start a conversation. Not a real conversation, but a lead to how he could sell me a new car right now. I felt like I had PTSD going in there, bristling any time some person would walk towards me, like a rabbit seeing a bear approaching.

 

[Ogre]

Every other time I'd go for service, some sales droid would want to start a conversation. Not a real conversation, but a lead to how he could sell me a new car right now. I felt like I had PTSD going in there, bristling any time some person would walk towards me, like a rabbit seeing a bear approaching.

I hear you. There is like a little dance to try and get in and out of the service desk without encountering the sales parasites.

Fortunately, my Subaru is of the age where I just take it to an independent garage.

My Tesla, at 13 months old, has yet to encounter any service at all. We rotate our tires at Costco which saves us $50-75 each time. Thinking about getting the brakes checked and the air filter cleaned soon.

 

[SwampNut]

I did the cabin air filter and a heavy duty coil cleaning, car smells much nicer. Not a huge effort, a bit of contortion involved. I haven't rotated yet and should. Which is the most lazy way--DIY in the driveway, or stop at the tire shop and go to lunch/shop while they do it. Hmm. Here it's free, if you're a customer of Discount Tire they will rotate your new cars at no charge when they have the OEM tires.

 

[Ogre]

I did the cabin air filter and a heavy duty coil cleaning, car smells much nicer. Not a huge effort, a bit of contortion involved. I haven't rotated yet and should. Which is the most lazy way--DIY in the driveway, or stop at the tire shop and go to lunch/shop while they do it. Hmm. Here it's free, if you're a customer of Discount Tire they will rotate your new cars at no charge when they have the OEM tires.

Now that I think of it, our tires are about due for another rotation, maybe I’ll just see if I can schedule all of it at once from Tesla service and see how it works out.

 

[Sirfun]

I think people are bothered by the dealership structure, not the individuals who work there.

There are certain to be some fantastic people working at the dealerships. It is the legalized monopoly/ monopsony which is destructive.

Forcing Ford to guarantee an individual exclusive access to a market provides a tremendous lopsided structure. Neither the manufacturer, nor the consumer have a ton of options to switch save to another brand of car.

Only its worse than that because in many regions, most of the dealerships are owned by the same company. I had a bad experience with the local Subaru dealership. If I wanted to switch to another provider I’d have to drive 40 miles to the next city to purchase my car and get it serviced.

The guys working in the shop could be a the best folks around and do a great job… even as their employer screws every customer coming in and out.

AND, their employer probably screws those employees also. But, not all dealerships are created equal, though. Some, can be good, decent places. I get it, the dealership model puts "US" the customer at a disadvantage most of the time. But it's also the way our economy works. Some folks with money want to buy a franchise of "whatever" in their neck of the woods. It could be a car dealership, gas station, or McDonald's. That how our franchise system works. Which sometimes isn't very well!

That video about motorcycle dealerships was pretty good at explaining how the relationship between Manufacturers and franchises works. Manufacturers really enjoy the franchise model, and that was one of the main reasons all the OEM's didn't take Tesla seriously. They thought there was no way Tesla would have enough money to pull off what none of them could even dream of doing. It's a pipe dream if anyone thinks that Ford is going to split into 2 businesses, with the EV division going without dealerships. More than likely it will be some kind of model like Saturn was for GM, where prices are non-negotiable.
Change is slow, but it's coming.

 

[Ogre]

AND, their employer probably screws those employees also. But, not all dealerships are created equal, though. Some, can be good, decent places. I get it, the dealership model puts "US" the customer at a disadvantage most of the time. But it's also the way our economy works. Some folks with money want to buy a franchise of "whatever" in their neck of the woods. It could be a car dealership, gas station, or McDonald's. That how our franchise system works. Which sometimes isn't very well!

I think of things like this in terms of incentives.

The way US law and the relationship between dealers and manufacturers are structured, dealerships are incentivized to act in certain ways. This is why the dealership experience is so similar wherever you go.

We’ve had decades of dealerships fine tuning their models. The dealerships which do not follow the sleaze-bag playbook often end up performing poorly compared to their peers and wind up bought out by the less ethical ones. This is why in so many towns 80% of the dealerships are owned by one company. The sleazy dealer wins.

There are exceptions, but the incentives point owners to run their dealership in ways which are just bad.

That video about motorcycle dealerships was pretty good at explaining how the relationship between Manufacturers and franchises works. Manufacturers really enjoy the franchise model, and that was one of the main reasons all the OEM's didn't take Tesla seriously. They thought there was no way Tesla would have enough money to pull off what none of them could even dream of doing. It's a pipe dream if anyone thinks that Ford is going to split into 2 businesses, with the EV division going without dealerships. More than likely it will be some kind of model like Saturn was for GM, where prices are non-negotiable.
Change is slow, but it's coming.

Saturn was GM struggling and failing to figure out how to make money off of being honest.

Legacy auto has multiple big problems coming at them all at once. The more or less enforced change to EVs, the potential collapse of used prices for ICE vehicles, plus competition that bypasses the entire dealership model.

It’s hard to be optimistic about their chances.

 

[Crissa]

Paying people to do jobs that don't need doing is charity/welfare handouts. We stopped...

You know, there are disabled people who need help at the pump, along with travelers in need of assistance.

I'm lucky, our village has one station, and the price is reasonable and full service. But not everyone has that, tho they should.

Saturn was GM struggling and failing to figure out how to make money off of being honest.

Saturn was actually internally profitable. It was closed because it didn't have a parasitic relationship with dealers, so it was able to be ended without paying them off.

Every other time I'd go for service, some sales droid would want to start a conversation. Not a real conversation, but...

And see, I would have to fight to get a sales person to even talk to me. I can hang out for hours in a car dealership without being approached.

-Crissa

 

[Ogre]

You know, there are disabled people who need help at the pump, along with travelers in need of assistance.

I'm lucky, our village has one station, and the price is reasonable and full service. But not everyone has that, tho they should.

-Crissa

In theory, gas stations are required to offer full service to disabled people in every state.

https://www.ada.gov/gasserve.htm

In practice I have no idea how many gas stations actually make this feasible and there are ways around this.

 

[Crissa]

Yeah, supposed to and do are different things.

Also, I saw I had skipped some posts (it doesn't always show them all while I'm typing) so I replied to more.

-Crissa

 

[Ogre]

And see, I would have to fight to get a sales person to even talk to me. I can hang out for hours in a car dealership without being approached.

Car salespeople think they have a nose for who has money.



… or at least they have a pile of preconceived notions about who they can extract money from most easily.

 

[Crissa]

Car salespeople think they have a nose for who has money.



… or at least they have a pile of preconceived notions about who they can extract money from most easily.

Yep. I used to (until pandemic) go to the movies with my friend. Who, at the time, was working minimum wage. So he went from less than 1/15th the income of my spouse to 1/4. And all that time every server would give the check to him. No matter which of us ordered.

-Crissa

 

[SwampNut]

You know, there are disabled people who need help at the pump, along with travelers in need of assistance.

So those are jobs that need doing?

And see, I would have to fight to get a sales person to even talk to me. I can hang out for hours in a car dealership without being approached.

Lucky you. My wife gets mobbed. I have a better f-you face and it's 50/50. She won't walk into a dealer again, period. If we get the Smart, I have to do 100% of it.

 

[Crissa]

So those are jobs that need doing?

Yes?

Lucky you. My wife gets mobbed. I have a better f-you face and it's 50/50. She won't walk into a dealer again, period. If we get the Smart, I have to do 100% of it.

Ugh. I was just pointing out their attention is capricious and selective. It's a bit difficult to get service or buy something at all when you get ignored.

-Crissa

 

[Sirfun]

So those are jobs that need doing?



Lucky you. My wife gets mobbed. I have a better f-you face and it's 50/50. She won't walk into a dealer again, period. If we get the Smart, I have to do 100% of it.

You're talking about the Smart EV, reminded me of TFL. They've done a bunch of videos about one they purchased used for $7000 in 2020. Here's one of their videos, comparing it to a Tesla X.

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