Tesla’s decision to sell cars in Tesla-owned stores, instead of through franchised car dealerships, has been under fire since the company first came to market. In fact, states such as New Jersey temporarily banned the sales of Tesla cars in favor of dealerships. Now an association of dealers in Virginia is targeting Tesla.
Discovered by the Washington Post and covered by Electrek, Don Hall, the head of the Virginia Automobile Dealers Association, recently published a YouTube video claiming that local dealers are “under attack from Tesla and many others out there who believe the franchise system is is a dinosaur and no longer works.”
Hall promises that there will be a “series of town hall meetings” around Virginia where he wants legislators and “others” to make sure they “understand the importance of the franchise system.” Hall said Tesla is not the only one interested in stealing business from auto dealers, but didn’t name additional firms.
“It’s a real fight. It’s a serious fight. Let’s all strap on whatever it takes to win, and let’s win this fight to protect the franchise system.”
There’s a reason why you buy cars from franchised dealerships. In fact, Dealerships were originally started to prevent any sort of competition between independent sellers and car companies, and many dealers are supported by state laws prohibiting direct-to-consumer sales by car companies.
The Wall Street Journal touched on this back in March when it discussed Tesla’s continued fight to create standalone stores throughout the United States. “Laws protecting independent dealers were installed in the 1950s to prevent the arbitrary closing of stores by manufacturers, and in recent years these rules have been used by dealer lobbyists and some auto makers to argue that all stores need to be independently owned,” The Wall Street Journal explained.
Perhaps it’s time for change anyway
Dealerships provide consumers with a place to get their cars serviced, something Tesla stores can’t always provide. For that reason, Hall’s comments seem a little dramatic. On the other hand, one could easily argue the current auto-dealer system isn’t the best for consumers either. As someone who recently went through a new lease negotiation, the process of getting a new car is archaic at best.
Perhaps Hall and other dealers need to adapt in an effort to compete better with the likes of Tesla. It’s probably a better approach than making a silly video declaring an attack.