tesla's real impact - breaking the car dealer monopoly
07-31-17, 09:54 PM
#301
Lexus Fanatic
I dont know about the mob or anything, but one of the main reasons people are in staunch favor of the direct consumer model, is that somehow dealers are Proactively hindering mfgs from giving customers better deals. If thats the case, has Tesla, a direct to mfg decided hey, we have optimized our design process, and now we can pass on the savings on to the customer...? Not exactly. Supercharging no longer free. Model S and X now cheaper?
Not really... The only upside, which I have to agree on is that the pressure of buying a new vehicle will be less. To think the process will be cheaper in any way shape or form is naive when it comes to running a business. Those 8.6% savings are going nowhere since whose upkeeping the galleries of dealerships, service bays etc. Tesla doesnt service the same # of vehicles as say Lexus does in a month.
Not really... The only upside, which I have to agree on is that the pressure of buying a new vehicle will be less. To think the process will be cheaper in any way shape or form is naive when it comes to running a business. Those 8.6% savings are going nowhere since whose upkeeping the galleries of dealerships, service bays etc. Tesla doesnt service the same # of vehicles as say Lexus does in a month.
I am not sure what to think about less pressure. Some have said that a direct sale is more efficient. But I have argued that a certain level pressure (totally different for each and every customer) is required to move cars efficiently to get the days on hand to a specific level. The current GTA Tesla dealer has some available cars on the lot, but if I want a specific color or config it is a 3-4 month wait and its full MSRP. That to me does not seem to be very efficient IMO. Sure no pressure, but pay full price.
07-31-17, 11:48 PM
#302
Lexus Test Driver
To think the process will be cheaper in any way shape or form is naive when it comes to running a business. Those 8.6% savings are going nowhere since whose upkeeping the galleries of dealerships, service bays etc. Tesla doesnt service the same # of vehicles as say Lexus does in a month.
Additionally, used car sales are more profitable for dealers than new car sales, further demonstrating how diminutive new car revenue/profits are, at least relative to overall dealership revenue and profits.
08-01-17, 01:02 PM
#303
Lead Lap
Agreed, but it is free enterprise (esp. low tariffs/low taxation/relatively low trade protectionism) that people in the USA have to thank for that. Crazy to think about how Europeans pay VAT even on cars, sometimes as much as 20% depending on the country.
You accuse others of naïvety, yet you actually have this completely backwards. Service makes dealers far more money than car sales (both in revenue and operating margin), so it is actually the case that service subsidizes car sales at dealerships. Service doesn't need car sales income to support it; it's actually the other way around.
Additionally, used car sales are more profitable for dealers than new car sales, further demonstrating how diminutive new car revenue/profits are, at least relative to overall dealership revenue and profits.
You accuse others of naïvety, yet you actually have this completely backwards. Service makes dealers far more money than car sales (both in revenue and operating margin), so it is actually the case that service subsidizes car sales at dealerships. Service doesn't need car sales income to support it; it's actually the other way around.
Additionally, used car sales are more profitable for dealers than new car sales, further demonstrating how diminutive new car revenue/profits are, at least relative to overall dealership revenue and profits.
08-01-17, 01:21 PM
#304
Lexus Test Driver
I quoted exactly where you said it. You literally just said the 8.6% savings won't be passed on because of the need for upkeep on service bays, all while accusing those who disagree with you of being "naive". But the reality is that service is already far more profitable than new car sales, so it's completely wrong to suggest that new car cost savings won't be passed on to consumers because of service bays.
08-01-17, 03:32 PM
#305
Lead Lap
I quoted exactly where you said it. You literally just said the 8.6% savings won't be passed on because of the need for upkeep on service bays, all while accusing those who disagree with you of being "naive". But the reality is that service is already far more profitable than new car sales, so it's completely wrong to suggest that new car cost savings won't be passed on to consumers because of service bays.
Again if the naivete comment came of harsh, no harm meant. Just saying though, what motivation as an established corporation do I have to reduce my earning potential?
08-01-17, 04:08 PM
#306
Lexus Test Driver
Yup, service rates wholly fuel a dealerships end sheets. (Not entirely true, but for all intents and purposes lets assume thats ironclad). Now the 8.6% i was referring reflects inefficiencies in the way the system is currently run. Labor hourly rates, which are inherently inflated would have to decrease since now the service techs are corp employees. Parts prices (which have a mark up due to being sold from a third party) would also decrease...trimming the fat. Service rates now are similar to indy mechanics, service no longer is profitable as it once was... Do you really see this happening?
Again if the naivete comment came of harsh, no harm meant. Just saying though, what motivation as an established corporation do I have to reduce my earning potential?
Again if the naivete comment came of harsh, no harm meant. Just saying though, what motivation as an established corporation do I have to reduce my earning potential?
No clue why you went off-topic discussing service becoming exclusively run by manufacturers. That isn't at all what's being discussed in this thread and was not part of the considerations of the study you quoted.
Last edited by gengar; 08-01-17 at 06:44 PM.
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