Pro-dealer arguments get dumber

During the Indiana hearings about franchise laws, local car magnate Tom Kelley made a Pandora’s Box argument that we’re likely to hear again, unfortunately. Skip to 31:10 and you’ll hear, “I’m more concerned about the Chinese and people from India bringing cars in the United States if they have an easy access to do that.”

Screen Shot 2016-02-26 at 7.11.38 PMState franchise laws do NOT protect us from junky marques. Anyone over 40, and that includes Mr. Kelley, remembers when perfectly legit franchises used to offer the likes of Alfa, Peugeot, Renault, Yugo and Fiat. They had made it across the treacherous moat into the US market. Hooray! They had sales and service support from franchisees. Yay! But then the American consumer gave ’em the heave-ho back into the water. Why? Because they were lousy cars. Franchise laws didn’t filter them out. We, the consumers, did the filtering.

Moreover, there was no Internet. No Renault forums to warn that the Le Car’s hand brake had a tendency to snap off in your hand. We had to rely on monthly mags like Consumer Reports and word of mouth. Using just those primitive tools, the US consumer was still able to ascertain that, say, Toyota and Honda were better bets. In short, we’re capable of voting with our wallets.

Yet we’re supposed to believe that a shoddy Chinese marque will slip under the radar circa 2020, into mass circulation, and somehow appear in our driveways? Come on now. We’re savvier than that, aren’t we?

Look, if we insist on NOT thanking ourselves, but instead thanking government for protecting us, we should thank federal regulators — the NHTSA and the EPA — not checkered state franchise laws. The feds do push automakers around like club bouncers. Heck, they just recently forced the Alfa 4C to go home and come back 220 lbs heavier, just for us. But despite our gauntlet of federal door guards, if you have a compelling enough product, you can modify it for the US market and find buyers, and profit.

The “compelling” part, of course, is the problem. Ask serial importer Malcolm Bricklin. He introduced Subaru to the US. Success! But also the Fiat X1/9 and the Yugo. Failure! And franchise laws had nothing to do with any of those outcomes, Mr. Kelley, nor are they responsible for Suzuki’s recent departure.


2 thoughts on “Pro-dealer arguments get dumber

  1. purrpullberra says:

    I think it’s a perfect time to raise the fact that this is at its heart a first amendment argument. There is no justification for forcing Tesla into contracts. Nor is there any law requiring contracts be signed just because GM or others signed them freely themselves. This could piggy-back on the Apple vs DOJ fight that is largely first amendment related.


  2. Jim Whitehead says:

    If Congress grew any stones or cared about fairness, they could pass a Federal law that says any car that is legal to sell in one state must be legal to sell in other states, whether or not there is a dealer franchise to consider. IF the state ignored this law and disallows a sale, the consequence is that car cannot ever be taxed or restricted by that state. 🙂


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