If dealerships were a good arrangement for manufacturers, dealerships wouldn't have to turn to legislation to ensure their own continued existence. I mean, how much do you think it bugs the shit out of the German auto manufacturers that they spend an unfathomable amount of time and energy making world class cars, only to have their customers have to deal with a car salesman in order to actually buy one.

In the UK, and I think the EU generally, anyone including the manufacturer can sell to the public.

When Daewoo entered the UK market they made a big deal about not having franchise dealerships or commissioned salespeople. After a few years, the Daewoo owned showrooms were replaced with traditional dealerships.

Companies outside of traditional franchises haven’t cropped up selling brand new cars. New car sales happen through dealerships. Online sales, through specialists like jamjar.com, never took off.

None of this says franchised dealerships are perfect nor that they’re the same between the UK and US. However, in a place without restrictions on who sells new cars there has been no significant change in the model.

Thanks for the data point. I guess the model that always comes to mind for me is Apple. At some point they realized that they needed to control as much of the retail portion of the customer relationship as possible in order to successfully sell highly differentiated, but expensive products (Macs). Even their high-profile retail partners (like Best Buy) have Apple designed areas in their showroom. If I were BMW, Mercedes, or Audi, who all sell highly differentiated and expensive products, I would want a similar relationship with my customers.

Also, FWIW, Daewoo is basically a non-entity in the US auto market. I'm not sure how they fared in the UK and EU, but if it's similar, that may be a confounding factor with that particular answer. And, generally, I think the dealership model arose originally because the auto industry is immensely capital intensive before you start talking about having inventory sitting on a lot in every minor city in the world. And the auto industry was more speculative, so the manufacturers were happy to let someone else front the capital for carrying finished inventory. But the auto industry is established and capital is plentiful these days.