The recent dustup in Iowa, with dealer groups blowing the whistle and forcing the shutdown of a Tesla test-drive event, begs a question: If Tesla is just a wildly-hyped niche player with no real mass-market potential, a mere chipmunk in the back yard of Big Auto, why are dealer groups frantically chasing Tesla around the yard with a baseball bat? Obviously Tesla is more than a chipmunk. It’s more akin to a fox, and in a couple more years, think coyote. Then wolf.
But dealer groups are taking the wrong tack. Using ordinances and statutes to whack a well-regarded competitor only draws attention to the competitor’s product, aligns you with politicians, and posits the competitor as underdog with you as bully. Even if you win in court, you’ll lose in the court of public opinion. And if you lose in both courts? Then you’re beyond lost. Banning the competition is like banning a song. History shows it doesn’t work. In fact, it guarantees a hit.
Tesla isn’t trying to destroy the franchise system. It just doesn’t want to participate. The nightmare scenario for dealers is that consumers and automakers will feel emboldened by this Tesla precedent, then get together and cut out the middleman. That wouldn’t be Tesla’s fault. It would be the fault of the franchised dealer system for failing to justify its existence to consumers and automakers.
So rather than throwing the book at Tesla, the dealer posse needs to step up its game and improve the customer experience. If everyone liked the automotive status quo — the way cars are distributed, sold and serviced — then Tesla’s factory-direct structure would pose no threat. It would constitute a mere curiosity, nothing more. Manufacturers would not be tempted to imitate it. Consumers wouldn’t be buzzing about it. The middleman could get some sleep, knowing his role is secure. So, NADA, it’s time to kick customer service up a notch or two. But how? What would make your middleman role look less superfluous and more essential? In short, what would make Tesla want to use franchised dealers?
You’ve attempted to justify yourself to the consumer via this video.* But what about the other direction? Why do automakers need you? So far, they haven’t exactly come to your rescue. In fact, they’ve voiced displeasure with dealer protectionism. John O’Dell from Edmunds.com tried to go to bat for you, but whiffed because he forgot that Tesla has no inventory, sells a product that’s over the heads of many car salespeople, and needs none of the blood n’ guts servicing that makes dealers happy.
So your homework project is make yourself look vital to automakers, Tesla in particular. Ten-page minimum, single-spaced, and don’t even think about enlarging the font beyond 12-pt or fattening the margins beyond 1.25.” Due Oct. 10.
* The arguments presented in the video were dismantled by the Federal Trade Commission, and also by a crew of professors and economists. Seems dealers can’t find a friend anywhere — except in public office.