US: dealers fret on Tesla’s direct sales practice image

Car dealers in the US see Tesla’s decision to jump them and own its showrooms as a serious threat to a US institution that should – according to them – last forever.

For example, the Ohio state car dealers want to bring the Californian electric car company to the court because they contend that Tesla’s direct sales violate state automotive franchise rules – as Tesla already has a showroom in Columbus since last year and a second in Cincinnati.

“I don’t want ‘Hydrogen Motors’ to come along five years from now or some other Mickey Mouse thing to come along and then just jack up the industry,” said Rhett Ricart, president of Ricart Automotive in suburban Columbus and a plaintiff in a lawsuit filed against Tesla in Ohio. “It’s not right.”

“I disagree with the characterization that this is disruptive,” says Diarmuid O’Connell, the company’s vice president of business development. “It’s only disruptive from their point of view. It is logical and pragmatic from our point of view.”

According to dealers, which now back law proposal in several states that would see Tesla’s practice stopped, the three-tier auto distribution system in the US is at stake. In America, the system has independent dealers between customers and the automakers, with first regulations governing the dealer-automaker relationships dating as far back as 1937, according to the National Automobile Dealers Association.

Via Bloomberg