Christopher Otts

Manufacturers are big, voracious, you know, corporations.

And the lawmakers were thinking we need to protect the small mom and pop businesses from being taken advantage of.

It led to a lot of family businesses and generational wealth.

You know, guys who started with not very much many decades ago, and then their sons and daughters inherited, and then their sons and daughters inherited an empire, and suddenly you have these

big corporate dealer groups, and then there are regionally owned dealer groups, you know, where it's not so much a mom and pop.

Well, the car companies compete with each other to offer the best products, but that's kind of where the competition is limited.

Dealers, for the most part, have been the only source for new vehicles.

And

Even though it's so incredibly common to hear people complain about not liking the experience, if you want a new car, there really isn't much alternative.

So they had battles state by state to win the ability to sell directly to consumers.

Lots of lawsuits, lots of administrative proceedings before state commissions and such.

and by and large, they've won that fight.

So there are other new EV players who have come on the scene, Rivian, Lucid.

They are also going direct to consumer, making the same choice that Tesla did.

Now we are seeing a very interesting experiment with the most legacy of legacy car companies, Volkswagen, who's decided to start an all-new brand called Scout Motors that's going to sell SUVs and pickup trucks.

And they've made the extremely controversial decision to make Scout a direct-to-consumer brand, cutting out the dealers and...

Volkswagen dealers are incensed by this.

They're exhausting every legal avenue they can to stop Scout Motors from selling directly to consumers.

They see Scout as a threat because if Volkswagen gets away with this, if they're able to stand up a new brand and sell products directly to consumers, there's nothing that stops any other existing legacy automaker from following the same path.

Scout's CEO, who used to run Volkswagen in the United States, has said that the dealer system is just inefficient for this day and age, and they think that they can do it better at the corporate level.