• FTC on direct-to-consumer auto sales - "Blanket prohibitions on direct manufacturer sales to consume
    11 replies, posted
[url]https://www.ftc.gov/news-events/blogs/competition-matters/2015/05/direct-consumer-auto-sales-its-not-just-about-tesla[/url] [quote]Elio Motors (link is external) has announced plans to manufacture an innovative low-cost, high-mileage, enclosed three-wheeled vehicle. According to announcements by the company, it plans to offer its products for a base price of $6800—less than a tenth the price (link is external) of the cheapest Tesla Model S. The firm plans to manufacture the vehicles at a facility in Shreveport, Louisiana, beginning in 2016. As of March 29, 2015, it had accepted more than 41,000 reservations for the vehicles. Like Tesla, Elio Motors does not intend to establish an independent dealer network, but rather plans to pursue a direct customer sales plan (link is external) to keep down the price of its products. In a letter commenting on the Michigan proposal,[B] FTC staff supports the movement to allow for direct sales to consumers—not only Tesla or Elio, but for any company that decides to use that business model to distribute its products.[/B] Blanket prohibitions on direct manufacturer sales to consumers are an anomaly within the larger economy. Most manufacturers and suppliers in other industries make decisions about how to design their distribution systems based on their own business considerations, responding to consumer demand. Many manufacturers choose some combination of direct sales and sales through independent retailers. Typically, no government intervention is needed to augment or alter these competitive dynamics—the market polices inefficient, unresponsive, or otherwise inadequate distribution practices on its own. If the government does intervene, it should adopt restrictions that are clearly linked to specific policy objectives that the legislature believes warrant deviation from the beneficial pressures of competition, and should be no broader than necessary to achieve those objectives. Opening the door by a crack is a step in the right direction, and we urge policymakers in Michigan to take this small step. But beyond company-specific fixes lies a much larger issue: who should decide how consumers shop for products they want to buy? Protecting dealers from abuses by manufacturers does not justify a blanket prohibition like that in the current Michigan law, which extends to all vehicle manufacturers, even those like Tesla and Elio who have no interest in entering into a franchise agreement with any dealer. [B]Absent some legitimate public purpose, consumers would be better served if the choice of distribution method were left to motor vehicle manufacturers and the consumers to whom they sell their products.[/B][/quote] Avoided posted some of the more sensationalist articles saying they were making a ruling. they aren't - they are just greatly in support of direct-to-consumer efforts. Which is great news for consumers/Tesla and could lead to a ruling in the future.
i seriously hope the FTC rules in favor of direct-to-consumer auto sales, and this has boosted my confidence they will make the right decision
This doesn't override state laws against it, however.
Good. I don't particularly like or want the Tesla, but I see no logical reason why they can't be sold straight to the end user. It'd make it a hell of a lot easier to get a manual transmission or a fancy radio or whatever if customers could go directly to their company of choice.
[QUOTE=TestECull;47718777]Good. I don't particularly like or want the Tesla, but I see no logical reason why they can't be sold straight to the end user. It'd make it a hell of a lot easier to get a manual transmission or a fancy radio or whatever if customers could go directly to their company of choice.[/QUOTE] The current system helps with modern "custom car ordering" from manufacturers. You know, the "build your own X" thing? A lot of those options are installed by the dealer, not the factory, so the factory can make as many cars as it can without having to worry about adding in custom features. However, with manufacturers who don't operate in this way, direct-to-consumer would be a huge bonus.
[QUOTE=TestECull;47718777]Good. I don't particularly like or want the Tesla, but I see no logical reason why they can't be sold straight to the end user. It'd make it a hell of a lot easier to get a manual transmission or a fancy radio or whatever if customers could go directly to their company of choice.[/QUOTE] And they wouldn't be forced to pay out the ass on dealership mark up bullshit. The auto industry is horribly anti-consumer.
The same fuckers cockblocking companies like Tesla also scream "mah free markets" until the cows come home. Hope the FTC fixes it federally.
There's literally not a single valid reason against direct-to-consumer sales. The only reason they're trying to block this is because they realise their sales model is obsolete.
[QUOTE=BuffaloBill;47719167]There's literally not a single valid reason against direct-to-consumer sales. The only reason they're trying to block this is because they realise their sales model is obsolete.[/QUOTE] Theres a reason why it was banned to begin with, but I cant find it with my google-fu because of this news.
[QUOTE=s0beit;47718111]This doesn't override state laws against it, however.[/QUOTE] Probably clears the door for suits and sets the federal opinion on the matter which carries great weight with the courts
[QUOTE=Sableye;47719192]Probably clears the door for suits and sets the federal opinion on the matter which carries great weight with the courts[/QUOTE] I don't really see how this would help any potential court case. The federal government can in many cases override state law, if a law exists which explicitly forbids or allows something (this is a clarification of something existing, and "not banned" doesn't effect anything below the federal level) or if there is something the constituion has to say about it. Otherwise there's nothing that can be done with this decision.
[QUOTE=Silence I Kill You;47718891]The current system helps with modern "custom car ordering" from manufacturers. You know, the "build your own X" thing? A lot of those options are installed by the dealer, not the factory, so the factory can make as many cars as it can without having to worry about adding in custom features. However, with manufacturers who don't operate in this way, direct-to-consumer would be a huge bonus.[/QUOTE] Yeah and they also make me get options I don't give a shit about. The only options I want on my car are cloth seats, a manual gearbox, air con, cruise control, a nice radio, a switch to turn off ABS/TCS/ASM/etc, and that's really about it. I don't want the fancy floormats or the triple cupholders or the dealer addon mudflaps, I don't need things like satnav(My phone has that), bluetooth/aux input/MP3/FLAC/CD/wjatever(My local FM station is great), hands-free controls on the steering wheel(I never answer my fucking phone on the road anyway so they'd just be in the way), etc. Jeremy Clarkson would probably call my car 'equipped like a Romanian jail cell', and that's how I like it. It grinds my gears when I have to buy all that shit in order to get one of the options I do want. And, of course, they charge out the ass for every single one of them too. It's like they're trying to mask a 'special order fee' that way. It's even worse when I try to delete a feature I don't want and the builder's all 'Hey, I heard you don't like that bit of chrome trim around your fenders, so we'll be happy to remove that. But ONLY IF YOU GET THIS AUTOMATIC BECAUSE THE MANUAL WON'T FIT WITHOUT THE GAUDY TINSEL!'. wharbahuthjtih If I could order direct I'd be free of that. I could have my honest little 4-pot 4WD quarter ton pickup as a DD, I could have a nice little 4-cyl sports car, a throaty V8 muscle car, all configured [i]exactly[/i] to my specification and for a good price on each. It'd be glorious.
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