Tesla to kill the auto dealership?

[hattaresguy]

I think they are moving in the right direction. Car sales are antiquated, why can't you just say build a truck online and have it shipped right to a GM Store and pick it up the way I can with an Apple computer?

Why do I have to haggle, can't they just set a reasonable list price and that's it.

 

[mount]

I always tell the dealer exactly what I want anyway. They usually have to order it in, because every one on the lot has $1,000's of dollars of options I don't want.

 

[wallyuwl]

Originally Posted By: hattaresguy

I think they are moving in the right direction. Car sales are antiquated, why can't you just say build a truck online and have it shipped right to a GM Store and pick it up the way I can with an Apple computer?

Why do I have to haggle, can't they just set a reasonable list price and that's it.


No matter the product there will always be a market for on-demand products. In other words, a lot of people want to go to the dealer and look for their car and buy it that day, not wait three months for delivery. There are a lot of dealers that have "no haggle" pricing that is competitive, even on new cars. Then there are also negotiating services (for example, if you're a Sam's Club or Costco member this service is included in your membership).

 

[expat]

The days of the Agent, Dealer, middle-man, Pimp are coming to an end.
Manufacturer to user is the way of the future.

I'm not saying there won't be showrooms.

The only negotiation will be for Trade-in value.

 

[Wolf359]

Originally Posted By: expat
The days of the Agent, Dealer, middle-man, Pimp are coming to an end.
Manufacturer to user is the way of the future.

I'm not saying there won't be showrooms.

The only negotiation will be for Trade-in value.


The internet has been around for 25 years, dealers will probably be around for 25 years also. This site is self selecting, there's tons of people out there that have no clue about cars and there always will be.

Unless the singularity happens which is when computers get so smart that they can build smarter and smarter computers so that any future predictions beyond that are meaningless.

 

[Ndx]

What about service dep. Parts dep.
We have easy access because of the showrooms everywhere ...

 

[Merkava_4]

I like it. I like the idea of buying directly from the manufacturer.

I think it's important to have a direct line of communication between the consumer and the manufacturer.

 

[Garak]

People will still want to sit in a vehicle, look at it, feel it, and drive it before purchasing it. Parts and service have already been mentioned.

Tesla should concentrate on getting themselves mainstream before they try to revolutionize the system. They're going to bring the electric vehicle to the masses all the while wiping the "stealership" off the planet? Right.

 

[demarpaint]

Originally Posted By: Garak
People will still want to sit in a vehicle, look at it, feel it, and drive it before purchasing it. Parts and service have already been mentioned.

Tesla should concentrate on getting themselves mainstream before they try to revolutionize the system. They're going to bring the electric vehicle to the masses all the while wiping the "stealership" off the planet? Right.

I agree. I love the idea of buying directly from the mfg. But I doubt Tesla is going to make buying anything but buying a Tesla direct from the mfg. happen.

 

[Shannow]

While they are at it, Tesla should buy themselves some retiring power stations, and start offering their customers wholesale "COSTCO" like pricing.

 

[JHZR2]

The test drive part is a main consideration. Love the idea, perhaps it is more of the AAP parts buying model, buy online and have shipped to a b&m store or buy their wares off the shelf directly.

But one cannot underestimate the power of the test drive and shopping for cars.

What this may do in the paradigm is allow smaller, more streamlined dealerships who don't have to sit on as much inventory.

At the same time, aim sure the OP haggles over his real estate deals, so not sure why this is any different. Mir anything, many supposedly prefer the android model as some vendors will offer them at a discount so they feel that they are getting a deal.

The other side of the coin is how many warranty issues have already existed, whee dealers don't want to honor, and what will happen if all margin is taken out by online sales. Will some dealers give the online buyers poorer service?

Huge possibilities here, interesting to see how/if it unfolds.

 

[A_Harman]

Originally Posted By: hattaresguy
Car sales are antiquated, why can't you just say build a truck online and have it shipped right to a GM Store and pick it up the way I can with an Apple computer?

Why do I have to haggle, can't they just set a reasonable list price and that's it.


I remember Saturn tried to change the dealership experience about 20 years ago with no-haggle pricing and a low-key sales approach. Where is Saturn now?

 

[demarpaint]

Originally Posted By: A_Harman
Originally Posted By: hattaresguy
Car sales are antiquated, why can't you just say build a truck online and have it shipped right to a GM Store and pick it up the way I can with an Apple computer?

Why do I have to haggle, can't they just set a reasonable list price and that's it.


I remember Saturn tried to change the dealership experience about 20 years ago with no-haggle pricing and a low-key sales approach. Where is Saturn now?


Very true, and people still went in and haggled.

 

[supton]

Saturn died because it was run by GM bean counters. Or perhaps it should have been: I still say, Saturn's fan base didn't care so much about the car as they did the dealership. GM should have taken their outdated chassis and sold them for a couple more years under Saturn's nameplate. Instead GM let Saturn just never gave Saturn the incremental improvements it should have gotten; and then it got lousy models (Vue? Ion?). It died a sad death.

What I don't get is that JD Powers study, that pic that gets posted from time to time, showing that the typical brand has around 100 problems per 100 cars... Even for niggling problems, where will one go for repairs and service? Try before buy?

That said, there seems to be a move towards the first couple years of service being free. Is that the dealership offering it, or the manufacturer? If it is part of the vehicle purchase, then the maker could compensate the dealership doing the work. If a dealership can establish themselves in the eyes of the buyer then they don't have to make car selling into their profit item.

 

[Zaedock]

A company that sells $80,000 electric cars will kill dealerships?

I highly doubt it.

 

[apwillard1986]

I am intrigued but doubtful. As others have said he needs to establish himself in the market before trying to change it. I doubt it is going to be a disruption to the business as a whole and I certainly don’t think it will be a revolution. The likelihood is that his unique and expensive product will combine with his unique approach to distribution to create a niche product that is ultimately barely a blip on the market radar.

I would also point out that in terms of profit sales departments are not the huge money makers for dealers. They are profitable and self sustaining but the primary reason dealers sell cars to sell parts and service on them. The profit made in sales pales in comparison to that made in the fixed operations and that is why manufactures require a showroom in order to grant a service franchise. Otherwise many dealers would opt. simply to be authorized service centers. Elon is not interested in making car buying easier, fair, or even modern. He wants the manufacture to have a bigger slice of the fixed op. pie.

 

[BMWTurboDzl]

The dealership lobbies are crying murder in some states and even took Tesla to court over it. Tesla seems to have learned from problems other OEM's* have had with their dealer network. I hate rent seekers. Grrrrr.

* IIRC when BMW released the first X5 they tried to get the dealers to sign new agreements and possibly weed out some bad apples. BMW lost in court or through arbitration.

 

[dlundblad]

The biggest thing that annoys me is you need say leather seats for say navigation. One does not simply order cloth seats with navigation.

 

[JHZR2]

Originally Posted By: demarpaint
Very true, and people still went in and haggled.


That's an interesting point...

Is that because in reality Saturn still had an "invoice" and "MSRP" price, so people still knew of the spread, which was the same as ever?

Seems that the only difference perhaps was that they published the pricing schemes a bit more openly for options pricing and MSRP than other companies did.

I would imagine that someplace in human nature, there is a line of separation either on dollar value or importance of items that indicates where folks haggle or not.

Or perhaps it is the presence of a salesman versus just a check-outer???

 

[demarpaint]

Originally Posted By: JHZR2
Originally Posted By: demarpaint
Very true, and people still went in and haggled.


That's an interesting point...

Is that because in reality Saturn still had an "invoice" and "MSRP" price, so people still knew of the spread, which was the same as ever?

Seems that the only difference perhaps was that they published the pricing schemes a bit more openly for options pricing and MSRP than other companies did.

I would imagine that someplace in human nature, there is a line of separation either on dollar value or importance of items that indicates where folks haggle or not.

Or perhaps it is the presence of a salesman versus just a check-outer???


I think it's just human nature. You'll always have your lay downs, although they are far and few. Then there are people that feel they need just a little off the price, to feel they've won. Then there's the hard core hagglers. I think car buying market will always be this way, and to a certain extent the appliance and furniture markets too. The home improvement market, and maybe a few others that slipped my mind fall in with appliances and furniture. Some people just love to haggle.