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Jessica Mendoza

πŸ‘€ Speaker
7634 total appearances
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The Journal.
The Shakeup Coming for Car Dealerships

And dealers say theirs is a system that protects consumers.

The Journal.
The Shakeup Coming for Car Dealerships

Instead of manufacturers setting a nationwide price, dealers can decide what to charge, and they can undercut each other, which they say leads to better prices.

The Journal.
The Shakeup Coming for Car Dealerships

Dealers also say they can give customers the best value for their trade in cars.

The Journal.
The Shakeup Coming for Car Dealerships

And with the average new car in the U.S.

The Journal.
The Shakeup Coming for Car Dealerships

costing about $50,000, a lot of people still want to see the car they're going to buy before they go for it.

The Journal.
The Shakeup Coming for Car Dealerships

The National Car Dealer Trade Group said that data shows consumers are largely satisfied with their experience.

The Journal.
The Shakeup Coming for Car Dealerships

The group also said that dealers are focused on making the process easier for customers.

The Journal.
The Shakeup Coming for Car Dealerships

So what happened?

The Journal.
The Shakeup Coming for Car Dealerships

Why does it seem like so many people now don't like dealerships?

The Journal.
The Shakeup Coming for Car Dealerships

At least, not until the mid-2000s, when a new company brought its EVs to market, Tesla.

The Journal.
The Shakeup Coming for Car Dealerships

Instead of creating its own dealership network, Tesla decided to sell directly to consumers.

The Journal.
The Shakeup Coming for Car Dealerships

Even though that was illegal in many states, the company forged ahead anyway.

The Journal.
The Shakeup Coming for Car Dealerships

In the end, Tesla was able to get carve-outs in many states that allowed it to sell directly to consumers.

The Journal.
The Shakeup Coming for Car Dealerships

But in some states, Tesla is allowed to do this because it only sells EVs.

The Journal.
The Shakeup Coming for Car Dealerships

And in some places, it has to follow other constraints too, like not having salespeople.

The Journal.
The Shakeup Coming for Car Dealerships

Tesla proved that a car company could sell direct to consumer.

The Journal.
The Shakeup Coming for Car Dealerships

Now, the only place you can buy a new Tesla is from Tesla.

The Journal.
The Shakeup Coming for Car Dealerships

And this approach has started to catch on.

The Journal.
The Shakeup Coming for Car Dealerships

Those other companies have followed in Tesla's footsteps, fighting for their own carve-outs state by state.

The Journal.
The Shakeup Coming for Car Dealerships

But for legacy automakers, who all have dealership franchises across the country, it's not so simple.