US: auto dealers report fights Tesla’s direct sales image

Amid California-based automaker Tesla pushing state legislatures to let the company sell its cars directly to consumers, the auto dealers push back with a new report.

The study, commissioned by the nation’s 17,000 new-car dealers representing association – the National Automobile Dealers Association – concludes the franchised dealerships actually provide numerous benefits to both automakers and the end buyers. One of the main reasons backing their statement is that they employ on a national level close to one million people.

“The franchised dealer network benefits consumers and manufacturers alike by providing fierce price competition among dealers and an extremely efficient distribution network that is acutely sensitive to local markets,” said in the report auto analyst Maryann Keller.

While automakers over the years also tried to change the laws that protect in various states the franchised dealerships, the biggest challenge comes from the electric automaker – which has been garnished with global attention amid its electric push. Tesla from the start went down the road of direct sales, also arguing against the franchised dealers that many startups in the industry – like Fisker and Coda – also failed because of them.

Tesla is already facing challenges, as some of the US states have put in place bans that prevent the electric automaker from selling directly to customers there – with the company aiming to take the battle to court soon.