tesla's real impact - breaking the car dealer monopoly
#121
Lexus Fanatic
Well, if you watched it, with Lutz even more so than with Nardelli, it deals with the expenses and money-losses Tesla has had to deal with since they tried to buck the trend of dealer-franchises. Lutz doesn't think Tesla is going to make it in the long run, at least as an auto manufacturer....I tend to agree.
#122
Lexus Champion
While Lutz is a titan of the industry and his experience and his views can be valued from the four decades he spent in the business - a few things need to be known to take what he says about Tesla and its business model. You can't really take his CNBC interview without some context.
Lutz has been on a bit of tear with his "trash-talk Tesla" media tour. He has made himself widely available to the financial media. That's how things are done when you want to peddle a viewpoint. It's not personal; he likes Musk and admires him for what he's been able to do, at least publicly.
Lutz is like any retired big-wig from Detroit. He takes on other stuff because he wants to do things and keep working. He is involved in other electric vehicle manufacturers directly or indirectly - specifically VLF and VIA motors. The first one is better known for the Fisker Karma (Lutz actually co-founded VLF). So that's competition for Tesla. The second one, VIA takes GM truck and SUV chassis and modifies them to electric/hybrid.
Lutz also has his own communications consulting company. Essentially you get a hired gun who goes to bat for you. Anything odd about why he's been on a media tour and talked down Tesla?
Anyway, Lutz is a brilliant guy but I would never think that he's just suddenly providing some guru-like wisdom because he's the only expert available on Tesla.
Lutz has been on a bit of tear with his "trash-talk Tesla" media tour. He has made himself widely available to the financial media. That's how things are done when you want to peddle a viewpoint. It's not personal; he likes Musk and admires him for what he's been able to do, at least publicly.
Lutz is like any retired big-wig from Detroit. He takes on other stuff because he wants to do things and keep working. He is involved in other electric vehicle manufacturers directly or indirectly - specifically VLF and VIA motors. The first one is better known for the Fisker Karma (Lutz actually co-founded VLF). So that's competition for Tesla. The second one, VIA takes GM truck and SUV chassis and modifies them to electric/hybrid.
Lutz also has his own communications consulting company. Essentially you get a hired gun who goes to bat for you. Anything odd about why he's been on a media tour and talked down Tesla?
Anyway, Lutz is a brilliant guy but I would never think that he's just suddenly providing some guru-like wisdom because he's the only expert available on Tesla.
#123
Lexus Fanatic
While Lutz is a titan of the industry and his experience and his views can be valued from the four decades he spent in the business - a few things need to be known to take what he says about Tesla and its business model. You can't really take his CNBC interview without some context.
Lutz has been on a bit of tear with his "trash-talk Tesla" media tour. He has made himself widely available to the financial media. That's how things are done when you want to peddle a viewpoint. It's not personal; he likes Musk and admires him for what he's been able to do, at least publicly.
Lutz has been on a bit of tear with his "trash-talk Tesla" media tour. He has made himself widely available to the financial media. That's how things are done when you want to peddle a viewpoint. It's not personal; he likes Musk and admires him for what he's been able to do, at least publicly.
#124
Lexus Fanatic
I think Lutz is jealous more than anything.
#125
Lexus Fanatic
Thread Starter
iTrader: (20)
Lutz is also 85... lol
#126
Lexus Champion
Well, Gentlemen, kindly show me one example where it has ever worked in the long run, here in the U.S., and I will kindly drop the subject. Tesla, admittedly, still has the system, but their future, right now, as an automaker, is in some serious doubt.
Here's a good video on the subject. See what Bob Lutz and Bob Nardelli have to say about it......two very experienced auto executives who happen to know a thing or two about bankruptcy themselves.
https://www.youtube.com/watch?v=ie0XiOzs5Qc
Here's a good video on the subject. See what Bob Lutz and Bob Nardelli have to say about it......two very experienced auto executives who happen to know a thing or two about bankruptcy themselves.
https://www.youtube.com/watch?v=ie0XiOzs5Qc
Bob Lutz has a good point though -- glaringly obvious -- that Tesla cannot continue to sell its cars at a loss. Tesla has become a cult and it is being propped by up people who have been drinking at the Elon Musk fountain and are now drunk on the Tesla Kool-Aid. I wholeheartedly agree with Bob Lutz on this. I don't normally listen to him, as I find him to be a bit of a blowhard.
Bob Nardelli has put a good spin on Tesla's market capitalization: GM is undervalued. If Tesla is worth more than GM while operating on a bound-to-fail business model, GM, as a business that has turned itself around and now can make money selling its products, must be undervalued.
I believe that Tesla stock will start to drop in the next 2 years as the Model 3 rolls out, especially if there are problems, such as supply not being able to meet demand, production numbers being much lower than promised and/or technical problems with the Autopilot advanced driver-assistance system.
#127
Lexus Fanatic
If Tesla didn't build the Gigafactory they'd be making a tidy profit right now but obviously their growth potential would be limited. Because Tesla is heavily invested in expansion a simple divide by calculation says they lose 20k on every vehicle sold, but Tesla's costs and production is not a mostly fixed equation like an established auto maker.
Put another way, Tesla is not going to lose 20k on every car they sell going forward, as production ramps up their gross margins will remain about the same and the line trends towards profit.
Put another way, Tesla is not going to lose 20k on every car they sell going forward, as production ramps up their gross margins will remain about the same and the line trends towards profit.
#129
Lexus Fanatic
Thread Starter
iTrader: (20)
#130
Lexus Fanatic
I do personally, though, disagree with Lutz on one thing (it wasn't a subject he discussed in that particular article). He feels that wagon-wheels and rubber-band tires are here to stay. From what I've seen, more and more people are getting fed up with their (generally...not always) stiff ride, lack of impact/pothole protection, ease of damage, relative lack of winter traction, and high expense of replacement. The "coolness" factor of filling up the entire wheel-well can only go so far before some realities set in.
Buick, of course, a GM brand itself, is finding this out the hard way. They can't give away Lacrosses with the 20" wheel option (even to me LOL) ....and the standard (one is stuck with them) 20" wheels and stiff ride on the Cascada convertible have impacted its sales-appeal......just as I predicted. If Buick would simply put less-aggressive rubber on it, it would probably sell in numbers like the former Chrysler convertibles.
Last edited by bitkahuna; 07-11-17 at 09:55 PM.
#131
Lexus Fanatic
As for comments on Apple setting prices, I should of used a different word or scheme, they do whats called "Price Maintenance" and they give incentives to retailers and they control how the product marketing works. But yes, price setting would be illegal. Now, if Apple did not sell their own items, and they relied on third party for all sales, the cost to the third party would be lower than what they are doing right now. So, if this was the case, and there was true competition among selling Apple products, the prices would come down from where they are right now.
I stand by the notion that prices for cars are lower because of dealer competition selling a product they presumably paid the same for.
Last edited by Toys4RJill; 07-11-17 at 09:56 PM.
#132
Please share.
Here is how statistic for sale by owner works.
If I sell my car I will sell it for 10K but dealer will sell same used car for 12K but if I trade car in I will get 7K. Which is better?
#133
Lexus Fanatic
Realtors add value.This is why you pay them the money. Realtors have chosen the career, they’re trained and certified, they have specialized tools, a community of support and a code of conduct. What that value means to one is their choice. I would never try to sell either of my properties privately.
Last edited by Toys4RJill; 07-11-17 at 10:20 PM.
#134
Lead Lap
This makes absolutely no sense at all. This is what I call "blinded by your preconceptions" (and there is a lot of that in this thread), and unwilling to look at a different way of doing things.
What you are saying is that huge automakers, like Toyota or GM or Ford, cannot afford to sell their own cars, yet some guy who has begged, borrowed, stolen and mortgaged to scrape together a few million dollars to open a dealership CAN afford to sell cars.
It is not a question of not being able to AFFORD to sell cars, it is the age-old mentality (in the USA) about free enterprise being able to do it better, and then not being legally allowed to directly sell their own cars (in many states of the USA) that is keeping automakers from selling their own cars.
As I mentioned in another thread, the Mercedes-Benz dealerships in the largest markets in Canada (Toronto and Vancouver) are owned by Mercedes-Benz and they seem to be doing well.
What you are saying is that huge automakers, like Toyota or GM or Ford, cannot afford to sell their own cars, yet some guy who has begged, borrowed, stolen and mortgaged to scrape together a few million dollars to open a dealership CAN afford to sell cars.
It is not a question of not being able to AFFORD to sell cars, it is the age-old mentality (in the USA) about free enterprise being able to do it better, and then not being legally allowed to directly sell their own cars (in many states of the USA) that is keeping automakers from selling their own cars.
As I mentioned in another thread, the Mercedes-Benz dealerships in the largest markets in Canada (Toronto and Vancouver) are owned by Mercedes-Benz and they seem to be doing well.
#135
Lead Lap
Keeping all the talking points in together, I still dont get it though, centralized warehousing, just in time mfging but still prices wont be lowered, dealerships will become part of the operating costs what benefit does the end consumer get?
In addition, used market values wont magically increase just because the new car store buying process is different. Teslas still depreciate pretty standard to established luxury players.
In addition, used market values wont magically increase just because the new car store buying process is different. Teslas still depreciate pretty standard to established luxury players.