Pomerance and Associates

Tesla should recognize auto dealers’ important role

June 19, 2013 | by Bonnie Moret | filed under: auto dealers, Tesla, Washington Area New Automobile Dealers Association

Caveat emptor … let the buyer beware, is a friendly reminder of when things appear to be too good to be true, they usually are.  Case in point: Tesla’s business model is based on selling their luxury electric automobile by direct sales to consumers through company-owned stores.

Today in The Washington Post, Gerard Murphy, president of the Washington Area New Auto Dealers Association, writes a rebuttal to Tesla’s ‘innovative approach’ to selling cars.  Murphy writes the following:

 Regarding the June 14 editorial “Tesla’s bump in the road”:

Those who retail motor vehicles are licensed by states in order to protect car buyers. This fact appears lost on Post editors who equate Tesla’s quest to avoid auto-sales laws nationwide with automaker “innovation.” Tesla believes it should be allowed to sell cars without licensed dealers. This can’t be.

Here’s why. Few consumer goods are costlier than cars, which are typically financed and always insured. Cars require routine maintenance for safety, which in turn requires extensive repair facilities, equipment and parts inventory. Indeed, crashing one’s personal computer is a far cry from crashing one’s car, which can be a matter of life and death.

Automaker Tesla can be as innovative as it is capable of being, but this has nothing to do with protecting car buyers, let alone service customers. For these things, a dealer network, licensed by the state, is required. If Tesla won’t have a dealer network, it doesn’t belong in the automobile business.

Happy reading!