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Originally Posted by GearheadSS
Uh huh, and who pays the salaries of the people that work at these new factory outlets or retail stores? The manufacturer? They would be taking on many costs that are now the responsibility of the dealerships. GM doesn't pay me, my dealer does. Why would Costco be interested in becoming a retailer for autos if they're not going to make money doing it? You think Costco doesn't make money on everything they sell in their stores?
I'm telling you, no one would save money if the manufacturer did it this way. Their cost of business would skyrocket due to the people needed to help them move their cars.
I always see this brought up but it's normally by someone that really hasn't done ALL of the homework on what would be required to make it happen.
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1. Dealers wouldn't need laws to keep manufacturers from selling other ways if their role was the best way for manufacturers to sell or for customers to buy.
2. Cosco already sells cars as much as they can within the law.
3. Manufacturers want to control the image of their brand. This gets muddied by dealers who want to make their own brand to differentiate themselves from other dealers. I believe one of the many ways removing the law to have to use dealerships only would result in franchises that are more fully controlled by manufacturers and act... Like McDonald's.... Every dealership would basically be the same... Their prices carefully controlled by the manufacturer. Their look and names and employee training, all centrally controlled so the experience is the same if you go into a dealership in PA for a given make, as in California.
I'm not saying dealerships wouldn't exist. They just wouldn't be without competition and consumers would have choice in how they buy their vehicles and the experience would improve because for the most part, the egomaniacal dealership of today that tries to differentiate themselves even though they're the same as every other dealership will go extinct. Replaced by people who run the franchise as a partner of the OEM if not a direct employee. I think a lot of the bad dealership experience comes from top to bottom in owners who need to see their name everywhere. That and no real incentive to do better since their business model is legally required