> "It's going to be much more efficient, a lot more online. It's going to be a really different model."[1]
Obviously this will be very controversial and subject to interference by state legislators who have often protected dealerships. Will be interesting to see this transition.
https://insideevs.com/news/571959/ford-dealerships-impacted-...
Why? They want to protect that recurring service bay revenue. Oil changes, plugs, belts, etc.
In the past decade we've had one new ICE car and two new EV cars.
The ICE car has been in the dealer once for a couple hours to replace rear hatch support struts (nothing to do with the engine, so could happen to any EV that has a hatch).
The EV cars have spent many weeks in the dealer for repairs and waiting for parts. Also issues unrelated to the engine, this was for door lock problems and window regulator problems.
In theory the EV motor is simpler than the ICE engine. But in practice, the ICE engines are bulletproof and almost never have problems. In 36 years of owning cars, I've never had a car in a shop (or dealer) for engine issues. It's always electrical system, electronics, seats, windows, shocks, etc. Components that both ICE and EV cars share.
My spouse and I recently purchased an extremely difficult to find plug-in hybrid EV. We had placed a hold on a specific vehicle destined for delivery to the dealership a few months later. We paid a deposit and signed a receipt that made reference to that vehicle and was given the final price sheet for that specific vehicle at deposit time.
Two days before we were scheduled to pick it up (more than two months after we put the deposit down) the sales guy called and said that the dealership had instituted a new policy on the first of the month that no sales of that specific model and trim level would be authorized by the deal desk without an interior and exterior water resistant coating, and that the lowest price he could offer was an additional $2,500.
As you can imagine that did not stand up to scrutiny and we walked out of there with the vehicle at the total price recorded in the initial paperwork. They signed on the dotted line and never said a word about any new policies until we were ready to pick it up. They did this in a U.S. state where that practice is not legal.
You bet we told Toyota about that when they sent the survey.
If they weren’t making enough to meet their needs then they should have known that when they were negotiating.
I'm not saying the EV's are not theoretically more durable and (much) less maintainance-intensive. I am saying that the best of the best ICE vehicles are not as different as your observation about your own TM3 tries to suggest.
https://www.normreeveshuntingtonbeach.com/honda-fit-maintena...
Well, theoretically yes. The point is that saying "my TM3 has 25k miles and zero maintainance" is worse than anecdata. It's no better than saying "My Fit has had almost zero maintainance at 164k miles". Far better to list the parts and systems not found in an EV, possibly along with likely maintanance schedules.
The spark plugs on the Fit are likely failing right now, btw.
This isn't true. Tesla batteries are liquid cooled. When supercharging, you can hear the fan blowing on the radiator.
While driving there is no engine noise, no unpredictable or delayed acceleration, no need to visit a gas station and have gas drip down the side of the car, and the knowledge that the drivetrain is simple and reliable and isn’t saturated with petroleum products.
I’ve owned some very nice BMWs before the Y, and while I greatly miss the suspension performance I can’t imagine going back to ICE.
The best description of my experience switching to an EV is that it’s been like going from a VCR straight to streaming. It’s fast, convenient, modern, and doesn’t really degrade.
All of the other components still need maintenance. Tires, alignment, suspension etc.
Telsa insisted on it's direct sales model and it was more politically expedient for regulators in many states to carve out an exception to the dealership requirement only for car companies that sell EV's exclusively (only tesla at the time).
While I suppose this didn't seem like a huge threat to the car dealership lobby in each state at the time it's clearly come back to bite them and is the main reason Fords Electric vehicle production and distribution is a different 'car company' on paper, so that they can take advantage of legislation designed for tesla.
Back in the 1930s, the car companies established this system so that they could worry about making cars, and the franchises could worry about selling and repairing them.
Early on, though, the franchisees lobbied their state governments for protection. They feared, among other things, that the giant car companies could open up their own stores across the street, cut prices, and crush the franchise like a bug.
To prevent that kind of abuse, all 50 states passed “dealer franchise laws.” They protected the dealerships in various ways—including barring any car maker from selling directly to consumers.
Those laws didn’t foresee the modern era. What they meant, of course, is that “no car company that has franchises can sell directly to consumers.”
They weren’t even thinking about companies that don’t have franchises, because there weren’t any at the time.
Over the years, Tesla’s legal team has gone from one state legislature to another, pointing out how that rule has become outdated, and suggesting that it get changed. In some cases, they succeeded.
In others, though, Tesla is running into a tougher obstacle.
State legislatures and courts have been smacking down this kind of shenanigan for nearly a century now.
Personally, I think theres ~50% chance Ford will have to split into two companies (separate stock ticker etc.) to be allowed to have an EV only, no-dealership, sales model,
Ford announced 3 months ago that they were forming a new corporation, Ford Blue, whose purpose is to skirt state dealership laws in order to lawfully sell these EVs direct to consumers. So this is definitely not just a comment.
https://www.freep.com/story/money/cars/ford/2022/03/02/ford-...
Notably, Ford has explicitly said they’re not doing that: “We’re not keeping dealers in the mix 'for the moment.' We are betting on dealers for the long term. I want to make that really clear. I’m not mincing words. We will have new standards and a new experience. But we learned a lot by watching Tesla."
Maybe going direct is the secret plan, but I don’t see how they get there.
Yeah, the dealership and the state level dealership associations aren't going to go out of business without some good fight. Even though I personally don't like the markup to be paid at the dealerships, but they exist for some good reasons: educate the consumers, financing, DMV paperwork and most importantly service your vehicles. EVs need much less service visits but when they do - it's likely harder for DIYers to tinkle with High Voltage battery systems and/or the infotainment firmware diagnostics and updates.
Every dealership I've been to has been more interested in feeding me whatever line of crap they think will get me to buy a car, not actually educating me about the different products available.
>> financing, DMV paperwork
Tesla and Carvana have proven these can be taken care of without a third party dealership. In most cases, financing is provided by a bank or credit union, not the dealership itself
>> and most importantly service your vehicles
Unless the fix is covered by warranty, I'm not taking my car anywhere near a dealership. They charge considerably more money than my trusted mechanic. My Hyundai dealership wanted $125 just for an oil change on a 2013 Sonata.
In theory, a dealership could be good for all of these things. In practice though, they suck. There is a reason most people hate car dealerships.
I have a recall repair on the car as well so I think my final move is to use that as leverage to push the price down further. Getting the repair done by the dealer gets you a warranty by the manufacturer, which is the only additional value that I see.
I don't get it. "Required" by whom?
Just say no, negotiate a better price, or take the car elsewhere.
>Getting the repair done by the dealer gets you a warranty by the manufacturer, which is the only additional value that I see.
No, the warranty exists regardless of where the car is serviced.
I'm not sure if that's true for Ford, but this is in the owner's manual for the Nissan GT-R.
> OBTAINING WARRANTY SERVICE
> You must take the vehicle to an authorized Nissan GT-R Certified dealer in the United States or Canada during regular business hours at your expense in order to obtain warranty service.
> WHAT IS NOT COVERED
> Repairs performed by anyone other than a Nissan GT-R certified dealer.
See the section titled "OBTAINING WARRANTY SERVICE" on page 11 and "GENERAL EXCLUSIONS" on page 12. https://www.nissanusa.com/content/dam/Nissan/us/manuals-and-...
> Repairs performed by anyone other than a Nissan GT-R certified dealer.
IANAL, but I don't think that clause is legal in the US. Any equipment originally covered by a warranty and still within the time/mileage limits of the warranty must still be covered unless Nissan can prove that the work done by an outside tech was the cause of failure.
I really, really don't understand why the model won't die. I'm guessing regulatory malfeasance.
It may be aggressive lobbying that keeps this status quo long past the original intent, but the original compromise came from a good place (eliminating "lemon dealers" and "lemon manufacturers" that refused to provide service/support/recalls).
Ah yes, Carvana, the company who has had its dealer license revoked in multiple States for a variety of violations, whose stock is down 90% (while insiders cashed out) and laid off thousands of people. What have they "proven"?
I bought a new car direct and I was educated, my credit union was better than the manufacturer's financing offer, the manufacturer did DMV paperwork, and the manufacturer does service.
9 years ago.
What am I missing?
A useless middleman.
For long stretches of time most manufacturers were offering 0% financing. Tough to beat that.
On a higher price. If you took a discount that could not be combined with the 0 percent financing, and financed using traditional financing options, you ended up paying less money.
I have yet to find to a situation where the overall direction of education flow was from the dealership salesperson to me.
That effect was significantly magnified when I was shopping for, and ultimately purchased, an EV. The only thing I can recall the salesperson knew more about that car than I did was where the dealership kept the keys.
The difference is that the customer experience seems to be radically different in Europe. I have no bad things to say about the dealership I had to deal with. They mostly sell at MSRP. They will gladly order you a customised model from their online platform if you need something specific and don’t mind the delay. You will have to negotiate the price if you want them to take back your old car but that’s mostly done in a very professional manner. Even buying used is generally quite pleasant. You will not get swindled at an official dealership. Meanwhile the US seems extremely cutthroat.
This seems completely contrary to my experience. How on earth do you get swindled? Know the price of the car you want, refuse to pay more; you are the customer, they need to make a sale. Dealerships are abundant in most cities and compete hard with each other. There are always deals to be had.
Why do so many people here find this difficult? Salesmen are usually dying to sell you a car, and never want to see you walk out.
A car handle on a Tesla that needs replacing is $1,000.
A decent right to repair would cover most of these kind of things
Tesla wants to be the new BMW and at least in US car sales today is the new BMW.
The last two cars I bought the salesperson knew nothing about the cars. People can learn much more about cars by going to a web site than talking to a sales person.
- DMV Paperwork
Dealerships charge consumers for the privilege of submitting DMV paperwork. This could all be handled online. Don’t understand the benefit.
- service your vehicle
I go to independent mechanics. They service my vehicle just fine.
Dealerships have got to go. They’re a huge waste of time space and money. They reflect crony capitalism at its worst.
I see value in having a local showroom where prospective buyers can test-drive several models to evaluate their driving experience. I don't think I'd ever buy a car without being able to sit in it beforehand.
Imagine manufacturers buying out the dealership lots, turning a good portion of the lot to a small track for testing the cars handling, maneuvering, and acceleration without going onto public roads. I'm assuming a closed course will be much better for their insurance than going onto public roads and much more fun for customers since they'll (presumably) have straightaways and corners. And the fact that they could just keep a model car for each trim level for their line up might incentivize them to not be stingy on test drives (and when the car is past a certain point they sell it at a discount).
Another portion could be turned into electric charging stations using solar. With how many dealerships there are I think this is a neat use of the wasted lot space.
So all in all, you then would go check out the cars, order the car you want online, and then pick it up on arrival at the showroom, all while doing away with the haggling and downright scummy tactics dealers currently use. The fact they default to screwing unwitting customers over should be warning enough that there needs to be change.
The OEMs want to us EVs to finally dump the dealerships.
https://twitter.com/pluginalberta/status/1531406942119137281
> "We only profit in one way: from new car sales and new car sales alone," Maron said. "We can't ... profit from services because our cars have far less parts than gas-powered cars. There's no regular service visits for engine tune-ups and oil changes. ... We don't make money off financing programs. We don't have insurance products or add-ons. A franchise dealer would look at this and scratch their heads. They would not know how to make money on this model."
> Maron says Tesla is fully committed to its mission of replacing all gas-powered cars with electric vehicles -- a mission auto dealers may not be eager to embrace.
> "We don't simply believe that electric vehicles represent a nice complement to gas-powered cars," Maron said. "We believe it's imperative they are replaced entirely by electric vehicles. ... It would be impossible for traditional dealers to convey this message adequately. This isn't a knock on them, but dealers are not fundamentally committed to the mission of EVs — we are. They make 99% of their revenue off of gas-powered cars. If you're opening a Yankees team store, are you going to ask a lifelong Red Sox fan to manage it?"
https://www.buzzfeednews.com/article/johanabhuiyan/tesla-sla... (2016: 7 Reasons Why Tesla Doesn't Want To Sell Through Dealerships)
> Someone on Twitter recently posted their Model S turning over 400km with only $3k in maintenance costs.
400 kilometers and a $3k maintenance bill somewhat reflects the image of Tesla that you see a lot on the internet. Whether or not that is actually the case.
? LOL
Why not just use megameters? 400Mm
OK, something about that looks odd. But what's the point in SI units if you can't actually use them?
Maybe 250k miles?
this was new to me and the 'to the rock' part didn't make sense to me, so i looked it up.
http://marvin.cs.uidaho.edu/About/quotes.html this page says it's actually this: "Diplomacy is the art of saying 'nice doggy' until you can find a rock."
find a rock as in kill them? :O
For example, with Tesla, the company optimizes delivery numbers of cars sold by sacrificing quality control, and their service center model is anemic and almost an afterthought, especially when it comes to addressing the QC issues their customers experience.
For every Tesla with 400k miles on them with a few thousand dollars in maintenance costs, there are a dozen cars that are delivered to customers like this one[1] from today on r/TeslaLounge, with 17 blatant issues upon delivery that QC should have caught early on in the process. There are stories on that subreddit about customers having to wait months, without a loaner car, for service centers to fix their cars or to even get service centers on the phone about the status of their repairs and cars.
Dealerships act as an intermediary customer that can perform QC, repairs, customization, service, maintenance, reject deliveries etc that manufacturers choose to skimp out on.
[1] https://old.reddit.com/r/TeslaLounge/comments/v3jkn3/update_...
You need an actually random sampling of delivered Teslas to determine how extensive QC issues are and whether the average one can go 400k km with only $3k servicing. Also, they defects reputed to vary substantially over time (e.g. one model year might have 5x the rate of two years later).
How do you know this? Did you see their internal data? There are lots of anecdotes going around about Tesla's quality. However, with all the TeslaQ it is hard to believe that there is real correlation between anecdotes and data. Here are my anecdotes - I owned 6 Teslas over last several years. Not one of them had any QC issues. I had one service done because I hit tire debris and front break dust shield started making noises. Tesla fixed that for me quickly with no charge. As for the data - during earnings calls they mentioned that they do pay close attention to their customer experience data and they had period of time where service was lagging. But they started addressing this issue and saw improvements. The way they are growing I do believe they need to keep close eye on customer experience, but looks like they understand that themselves and use data to make sure they are on top of this. Unfortunately there's not much reliable independent data to have better understanding of this issue.
Add: The intent of my comment was to ask if parent info is based on specific data or just anecdotes. As an example, I gave my own anecdotes and mentioned that they are not reliable correlation to the data. Somehow the responses I've got are all about anecdotes, mine or others, also some personal judgement of my ability to appreciate cars or judgment of my life circumstances that required me to have these many Teslas. Can we get back to discussing the main point I'm making - do we have data to make any of these judgements?
??????? Why on earth would you need this many Teslas? Maybe if you are buying so many teslas then it makes sense why you don't need them serviced - you barely give them enough time to wear themselves out!
Isn't this also terrible for the environment? The resources it takes to make one car is a lot.
And how long of leases are you talking about?
When you trade in your car the dealer will give you an offer for your car. Depending on demand this may be higher or lower than what the lease company wants. When it is higher you win. When it is lower leasing would be better. Either way though, the dealer is pricing in a profit margin from selling your car, so if you don't trade in your car but sell it yourself you can get this profit margin in exchange for your time.
In the end it is about risk management. What will the car be worth in 3 years when you are ready for a new one? Nobody knows for sure 3 years in advance. Sometimes it will be worth a lot more than the lease company expects and so you win, sometimes it will be worth less and so you lose. If you don't trade your car in you probably will always win in monetary terms, though I'm not sure if it is worth the time.
If you live in a state with no sales tax, then you avoid this problem.
Still, it probably would have been more profitable to keep driving just 1 Tesla, and sell the other Teslas as essentially new as soon as you got them.
the reason is that tesla price increases and backlog creates added value for aftermarket teslas.
As it happens, I can sell the used car i purchased over a year ago for more than i originally paid.
And in general the issues I heard about were from-the-factory issues, so only having the cars for 1-2 years each wouldn't matter much.
Same in my experience, though it's not as extensive as yours.
It's surprising how often you see negative anecdotes about quality control amplified as representative of a larger trend. It often seems there is an agenda compelling many to work so hard circulating negative opinions.
There are definitely some disgruntled customers, too.
I think a lot of the contrary voices are people scarred by ICE experiences and searching for comparable "gotcha boogeyman" to EV's to satisfy themselves with their current car situation, whatever it is.
Which is really true for pretty much everyone in this argument on both sides.
Overall I guess the point I want to make is even thought it is rent seeking (many industries are) this one seems to provide for so many communities all across America. I find it hard to believe that ford will pass up the savings to the consumers. We all know that profits will be returned to shareholders.
how dare they sell that vehicle.
Not to mention that when they bought it, Tesla gave the buyer the opportunity to reject it and have another specimen manufactured at no cost. they decided to keep it because it appears their vanity is literally only skin deep.
And you make a great point about the importance of rejecting deliveries, which is exactly what a dealership would have done upon inspection instead of forcing layman retail customers to do it free and to their detriment. We even have Tesla customers asking why other customers choose to take deliveries at the end of the fiscal quarter[12], because Tesla has a reputation of pushing out as many vehicles as they can in order to boost delivery numbers, even if that means delivering cars in poor condition. When quality and service is consistently that bad, you can't blame the customer for accepting a delivery of the car they spent tens to hundreds of thousands of dollars on.
Also, your comment goes against HN guidelines[13]:
> Be kind. Don't be snarky. Have curious conversation; don't cross-examine. Please don't fulminate. Please don't sneer, including at the rest of the community.
> Comments should get more thoughtful and substantive, not less, as a topic gets more divisive.
[1] https://old.reddit.com/r/TeslaLounge/comments/u9v1mo/off_my_...
[2] https://old.reddit.com/r/RealTesla/comments/rqie4g/gotta_lov...
[3] https://twitter.com/aprildawn78/status/1481450029462212616?s...
[4] https://old.reddit.com/r/RealTesla/comments/nurlbg/my_model_...
[5] https://old.reddit.com/r/RealTesla/comments/qzr5tx/how_is_th...
[6] https://teslamotorsclub.com/tmc/threads/comically-poor-deliv...
[7] https://teslamotorsclub.com/tmc/threads/my-first-model-3-exp...
[8] https://teslamotorsclub.com/tmc/threads/took-delivery-today-...
[9] https://old.reddit.com/r/TeslaLounge/comments/j59ovh/so_tesl...
[10] https://old.reddit.com/r/TeslaLounge/comments/smettt/terrify...
[11] https://old.reddit.com/r/TeslaLounge/comments/l0ownx/my_y_ha...
[12] https://old.reddit.com/r/RealTesla/comments/j59dp1/tesla_own...
This is my first time in 12 years on HN that mild sarcasm has been treated as confrontational. I hope you are okay.
Brakes? Maybe you're cutting out one or two pad slaps in that 100k.
Oil changes? Yeah, you've eliminated those, the lowest margin service dealers do.
Suspension components, air conditioning, etc? No difference, and that stuff shouldn't need to be touched in the first 100k anyway.
Tires? BEVs eat tires.
Still need wiper blades, cabin filters, etc. But those aren't big items either way.
I guess I just don't see where all this recurring service revenue comes from. Cars just don't break until they're 10-15 years old. Maybe some cars are really that unreliable still?
That's excluding tires, wiper blades and air filter changes.
Owners of less reliable ICE cars probably spend more.
I have two vehicles over 100k, one closing in on 200k soon, and my maintenance on both is less than 5k.
Of course, the part no one talks about:
1. How will you do a family vacation beyond the EV range?
2. Who pays to replace the ~$15k battery and when?
My observation is that it depends on the brand of the car. If it's a Toyota or Honda, or other well to do brand that people with credit scores reminiscent of FDA minimum cooking temperatures cannot afford it's the owner's fault that the timing belt snapped at exactly six miles more than the recommended change interval, they should have got it done proactively.
If it's a Nissan, GM or <clutches pearls> Chrysler then it's obviously the car's fault that it needs a fair number of suspension parts after spending 120k being fully sent over rural gravel roads with 300lb of tools in the trunk.
This pattern of double standards that absolves "things that should be nice" from blame when they fail to meet those expectations and blames more modest products even when their failures are reasonable can be seen across many classes of products, not just cars.
People like to talk about mileage because it’s an easy-to-measure stand in for the age of a car based on its usage. But over time they forget that like in humans, there’s a lot of variation at the same age.
There’s other factors like road conditions, cost of parts, cost of labor in different parts of the country, unexpected events like fender benders, etc. that the mileage number doesn’t capture.
The same 100k mile car driven in a leafy suburb where not much goes on is going to be different from a car with the same mileage driven under harsher conditions.
Scotty Killer on YouTube said something slightly different. He said highway miles are almost one tenth of city miles. Or in other words, stop and go traffic is ten times as bad as constant driving without traffic. At least for the engine and the transmission I guess.
Stopping for a meal, bathroom, and stretch break every 300 miles or so?
> Who pays to replace the ~$15k battery and when?
I'd typically buy a new ICE car before the 400k kilometers cited, as repair costs accelerate, so this isn't really a significant difference.
With a 300 mile range, I'd need at least 2 stops that are 4-6 hours, unless if I find a super rapid charger. That turns a sucky 12 hour day with 1-2 hours of stops into a 16 hour trip with probably 1-2 hours of additional stops still.
So now I need to power through or get a hotel.
The only people I know who only stop to refuel and then carry on until they've basically driven 12 hours straight are just trying to flex, it's some masculine thing.
More and more vehicles are getting 100-150kW charging, which definitely pushes a full charge more into the 25-40 minutes range for 80kWh EVs.
I wonder if having smaller cars would help as well, American cars/"trucks" always seem so pointlessly oversized. If the number of single occupant trips in London in things like Minis makes me sad, then I don't even want to think about single occupant trips in F150s in America.
Are you seriously resorting to a manphobic ad hominem attack at someone's masculinity for simply pointing out stopping for 4-6 hours every 4-6 hours of driving obviously doubles trip time, and would require those who are trying to save money on flying, but not wanting to waste a half-week driving to the beach or a vacation spot is obviously because that person is on some sort of bench pressing flex thing?
Perhaps you forget the US is 40x bigger than Great Britain, so obviously what works for the majority of those in Britain (e.g. 300 miles) may not cleanly translate to other countries. I'm not telling you to not get an EV. It might work perfectly for you. But as of yet, all those advocating for it and blaming the problems of the world on ICEs still hasn't addressed the basic concerns many people still have about EVs.
Tell me your a condescending narcissist without telling me your a condescending narcissist again.
We can only draw comparisons from our own experiences and the majority of people I know do not drive such long distances, the ones I do know make a point of stressing the fact that they do not stop whenever I have gone on a long journey with them.
I haven't forgotten the relative size of the US, but the same applies to any country of relative size. I guess it begs the question of _why_ you all drive so far. Does land mass correlate to miles driven? Is it because of an emphasis of road infrastructure over public transport/rail? Hmmm
There's already a pretty extensive network of rapid chargers, and it's growing all the time.
My understanding is that you were stuck with the charging network that each manufacturer is making.
If there are problems, it'll be $170/hour plus parts...
A lot of people just do what the computer says and take it to the dealer. The workshop is always full... it has about 20 bays.
That's a lot of income for the dealership. If you drive a lot it'll be more than one a year...
I do as much maintenance as I can myself. If it's something I cannot manage (last year I had a split hose on the transmission radiator line) I take it to an independent shop.
US big 3 or German cars are a maintenance nightmare.
Other than normal fluid changes, I can count on 1 hand the number of repairs I have had to do on any of them.
That said I had a dealer cuss me out for bringing them a quote from a mechanic for the same clutch replacement. "I can't f**ing cover my dealership like that" as if it was my problem. Same dealer who charged me $2k for a repair when they had the recall letter in their inbox.
Heck, the dealers even have a hard time getting parts.
I'm solving the interim by having 4 vehicles + mass transit + wfh.
Is that, maybe, a little bit ... overkill? Quadruple redundancy, plus a failover, plus reduced demand. Phew!
The entry level 3 with absolutely nothing on it is $47K before tax. In any case, this specific example was a high end Model S.
Electric devices require significantly more servicing than mechanical ones. On the flip side, people seem content to treat electric devices like they're disposable and just buy a new one every year.
I don't think this dynamic won't hold for larger-sized EV's.
Sounds like a Toyota
Citation needed. Both my EVs and ICEs needed similar amount of service. Breakage of drive trains are super rare nowadays (expect for over engineered performance stuff and just broken designs), same as breakages of batteries (cough, Bolt, cough).
All stuff my cars needed a service for in last 20 years were comfort features, gizmos, internal materials, electrical goblins, etc. Both ICEs and EVs.
The best citation on this site.
Transmission fluid for modern cars lasts about 100k miles. So you’ll do it maybe once, unlikely at your dealer as you won’t pay dealer tax for an old beater.
Exactly the same for timing belt and spark plugs.
Drive trains aren’t money makers for dealers for a long time.
Their role is to collect orders, provide test rides and service the cars.
I don't know if that's right (anybody with more info care to comment?), but it's at least enough to give me pause on the "dealers will hate nonnegotiable pricing" claim.
You are correct that there is no real money in new car sales anymore.
I wouldn't cry for nor count the dealers out just yet.
Previously I could never sweet talk dealers into the kind of deals some of my mates could.
The Tesla model is such an improvement.
If banking and Everything else is a good example, people are getting used to buy online.
I bought even my current car without seeing it before.
I bought my bike online as well.
If more and more do that dealerships might loose too much revenue anyway to keep them afloat.
I know this is off-topic, but the easiest return I ever made was an amazon return. I went through the return process on amazon's website and was given a QR code which took a few mins. I drove to the nearest Kohls, walked to the amazon kiosk, showed the QR code to the employee, and handed over the return. Took all of 30 seconds in store.
Anyway, back on topic. A hybrid model makes sense for Ford to compete, and it is a lot like Best Buy/Target in many respects. However dealers have made a living for a long time being the middle-men, I wonder how they will deal with additional competition. Best buy has a problem where people look at the product at the store then end up buying online, I could see people taking test drives and then ordering from the Ford website. Although I think the dealer will arrange commission if that happens.
I would love to see the behind-the-scenes numbers crunched on that model. I don't see how that model works long-term unless the percentage of customers in the showroom walking out the door with online price-matched goods is a relatively small group, or they're successful up- and cross-selling on gonzo margin goods and services before and after they walk out the door, or their COGS is way better, or some other activity to make up their bigger overheads versus an e-commerce marketplace.
Can anyone offer any insight how BestBuy is long-term sustainable with the online price matching policy?
Long term sustainable simply because they've already baked it in and it's less widely known amongst the typical consumer and its honestly kind of a hassle, people pay for convenience.
And for many of their products they all sell at MSRP anyway (apple laptops say) so they’re already matching Amazon et Al. And things like hdmi cables are some off brand and so they don’t price match anyway.
They have a pretty slick setup going, also jumped in on the appliances market just as Sears et Al disappeared.
I've bought more from Best Buy in the past few years than I have in the decade before because they are often the cheapest option, including Amazon. They also offer same-day courier service on some things I've ordered.
Well sure. That’s because they have enough money to just toss whatever you returned in a landfill.
You got your money back, and we all pay in environmental damage.
Nowhere in that does he say outright where dealers fit into an online, fixed price world. He only makes super vague statements like "dealers will be more specialized."
Reads to me like Jim isn't planning on dealers being around in the future but he's being vague enough to try not pissing the dealers off in the near-term.
Tesla has pretty convincingly demonstrated that it's possible to run a car company in the US without paying off the dealerships. It's only going to be easier for the second mover here to also stop.
They could have leveraged their large stores to be showrooms / distribution hubs (that they mostly already owned, which is why the private equity people were so interested in them, due to their real estate holdings). You visit a sears, you see what you want, you order it and in a couple of days you come back to pick it up. Their logistics pricing should be cheaper than what amazon could have done (as they are skipping last mile), and for many consumers it wouldn't have made much of a difference (the sears that was local to me growing up was in the same general shopping center as the groccery store we generally went to, so we were regularly there).
Of course they did try to do "in store pickup", but this was when they were dying already and the experience was pretty terrible (i still used it a bunch back in the day as at one point they were basically paying us to shop at sears via the amount of free shop your way points they were giving out).
Why would anyone want that? If I’m going to go so much as 15 minutes out of my way, I expect to leave with the item in my hand that day. That’s the killer advantage for brick and mortar retail.
I don’t even want to go to the store the first time, but I sure as hell don’t want to go twice if Amazon offers the same overall latency with zero trips to the store.
I feel like the wilder "DNA fight" that wasn't was "80's Sears/Amazon wannabe": Service Merchandise. They tried to recreate the Sears formula for the late 1980s/early 1990s and basically convergently evolved the Ikea model before Ikea grew any US presence as just big warehouses with smaller showrooms up front. They made a bunch of silly mistakes in the 90s trying to grow beyond their roots in primarily the US South region to more national regard/footprint, but if they hadn't made those mistakes they probably could have been a real interesting contender against Amazon.
How does it ‘read too much into it’? He literally says they need to go to a 100% online order, no inventory, no negotiation sales model. That’s a HUGE a change from today.
John Deere (the company I work for) works this way: everything is just in time, if you want a new tractor you order it and get it 3-12 months later. You still have to order from a dealer. Dealers do not keep new tractors on the lot, except for demo units and service loaners.
I'm not sure how this will work for Ford though. Deere is selling to businesses, a new tractor is a financial decision talked over with the accountant, and are bought/traded in based on tax deductions (the date you place the order counts for ta purposes not the day you take delivery). Cars seem like more of an impulse purchase and so people want to go to the dealer and drive a new car off the lot. Dealers (and Ford) doesn't want to risk someone buying a car and then changing their mind, which is a lot more likely to happen if you don't have the car yet. Even for Deere, dealers normally keep new small tractors on the lot.
For used car purchases that’s a different story I guess. Maybe dealerships only exist to service cars and sell used ones.
Shrug.
Once I saw that I got a bit sad.
It is their policy in the contiguous US to price match target.com to Target Store and Target Store to target.com. The policy doesn’t cover Target Store to other Target Store.
Here’s the quote with more context: “I believe for retail, we have to -- it's kind of like what happened between Amazon and Target. Target could have gone away, but they didn't. They bolted on an e-commerce platform and then they used their physical store to add groceries and return -- make returns really much easier than Amazon. They used their expertise as a physical retailer to their advantage, but they modernized the e-commerce piece. So it would be really easy to do business with them. It's exactly what we have to do on the retail side. We got to go to non-negotiated price. We've got to go to a 100% online, the vehicle there is no inventory goes directly to the customer, 100% remote pickup and delivery, but then we have this opportunity to use our physical presence, they outperform them. Like, I believe some Mach-E and Lightning customers would love to have a Mustang for the weekend. Maybe they want a Super Duty. I can do that, they can't do that, unless they ran a Ford.”
Source: https://seekingalpha.com/article/4515793-ford-motor-company-...