Cars and Cow Pies in the Garden State…

 

New Jersey’s Motor Vehicle Commission just became the latest to ban direct auto sales (read: Tesla Motors). In what is, at a minimum, poor timing, the state’s Coalition of Auto Retailers justified its position by alleging that, “an auto manufacturer is congenitally incapable of fully and faithfully honoring warranty and safety recall obligations.”

Congenitally incapable of faithfully honoring safety obligations. No subtlety there. So, we need independently-owned auto dealers to sell us cars specifically so they can later protect us from those who built them in the first place? If that’s truly the case, where we buy our cars is the least of our worries.

Meanwhile, 1.6 million Chevrolets, Pontiacs, and Saturns have recently become the focus of not only a massive product safety recall, but a Congressional inquiry and federal criminal probe, in the wake of evidence that General Motors and its dealers have known for more than a decade of the ignition switch problems linked to over thirty vehicle crashes and at least a dozen deaths. By law, each of those vehicles was sold by the type of franchisee the NJ dealer lobby claims is a buyer’s best – if not only – defense against such flaws and an automaker’s refusal to correct them.

Hmmm…..

I’ve worked in and with auto retailers for more than twenty years. The folks within a few have rivaled any customer service Tesla provides. But never in my lifetime have conventional dealers, as a category, been considered bastions of consumer protection or a customer-centric experience. When franchise laws were established nearly eighty years ago, some of those arguments may have been legitimate. Today, organizations like NJ CAR are seeking merely to protect the same monopolization they once fought against.

It’s not just Tesla that suffers. “Incumbent” automakers with existing franchises have also become handcuffed by such a singular, narrow model, even as it may no longer be optimal- particularly for new technologies and vehicles. Most importantly, the customer is the biggest loser as companies big and small compete not on value of service, but on political expenditures and the like. Increasingly, those customers know it and are acting accordingly.

To wit, fans of Tesla’s direct-sales model (including those who don’t drive Tesla’s vehicles) showed up on a few hours’ notice to put their support on the public record, even after the Motor Vehicle Commission’s decision had already been made. In six years of Tesla’s corporate-owned stores, I’ve yet to see a similarly reported show of public support for traditional dealers, in any state.

If those dealers truly believe they offer a better experience, they should embrace the competition. And then quit whining and win it. In some cases they undoubtedly will, but they need to be willing to do so. 

All else is just old school, four-square era bullshit. And the lobbyists defending it need either a better argument or higher boots.

(Disclosures: I worked my way through college mostly by selling cars for Saturn, obviously some years ago. I’ve since known and worked with many other dealers from different brands. For years, my husband was a technician and/or manager at a franchised dealer, and between us, we’ve worked with/for every single brand I mention in this post at dealer and/or corporate levels, including Tesla. Also, we still own and love a 2004 Saturn, now apparently affected by this latest recall. The boy is still hoping to inherit it.)

 

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19 Comments »

  1. luc336 said

    Hi Chelsea, it’s been a long time since you have posted, thought you had forgotten about this blog. ;-)

    What do expect from New Jersey, honest politicians…

  2. Good one, Chels! Never heard of “four-square.” But then the two cars that I bought new in my life, I paid cash for them. (And sold my old cars myself.) I guess that makes me a single-square type of guy.

  3. It was particularly nice to hear the statements made at the meeting. Though it was a ‘done-deal’ from the MVCs perspective, we were encouraged to hear the chairman acknowledge our support and welcome further discussion.

    This proposal was clearly made without an opportunity for the NJ consumers to weigh in and there exists some debate around the question of whether this should have/must have/really aught to have, been a matter for the legislature and not the guys that issue registrations and drivers licenses. You know which camp I’m in!

    At this time, I think our best bet is to make as much noise as possible by calling the Governors office and registering our objection to the provision. It takes about 30 seconds to call 609.292.6000 and say “I oppose PRN 2013-138” – no fuss!

    • MPGomatic said

      Phone calls won’t do squat. It’s all about the politicians pockets and that will never change. If Elon can’t learn to play the game here in NJ, tough noogies. All politics is local, as the saying goes.

      Does he want to spend his time grandstanding or selling electric cars? Time to get off the high horse, pony up and pay.

      • I’m not clear on what you mean:

        Are you saying that you’re in support of the dealer franchise model and that by pay up, you mean, the consumer should pay more and that they should not have the right to choose from whom they buy products or,

        Are you saying that Tesla should bribe NJ to allow them to trade on an equal footing to any other business offering its wares in the state?

        Which is it?

        • MPGomatic said

          I’m saying that Elon should quit with the pouty face and stop stamping his rich boy shoes. We need the jobs. It’s not just the dealerships. Build the freaking battery plant in Newark (with no tax breaks). There’s gotta be room at the ports to bring in all that lithium from Bolivia or Afghanistan or [insert country here].

          Is the mission to reduce carbon emissions or to expand his wallet? He’s pissing at windmills …

          • Daniel, you’ve not really answered my question though, which is it?

            Are you referring to the jobs that Tesla employees will loose with the closure of the stores?

            • MPGomatic said

              We must reduce carbon emissions and like it or not, the dealer franchise model is the law of the land in Jersey. That’s not likely to change any time soon. A franchise could employ the highly trained Tesla experts. This could all be done quickly and (relatively) painlessly.

              As far as vehicles costing more through the conventional model, well … burning *everyone’s* tax dollars to subsidize luxury cars for wealthy people is beyond absurd … but hey, maybe I’m the only one that can see that … =)

              • jeffuren said

                Yes, you are the only one. :)

                • MPGomatic said

                  D’oh! Time for me to get a sandwich board and stand on a Manhattan street corner …

              • Can you tell me how we would be “…burning everyone’s tax dollars to subsidize luxury cars for wealthy people.” What does that mean?

                Do you not feel that the law should reflect the desire of the people and be changed?

                Nissan and Ford have done a splendid job of demonstrating that regular dealers in many cases, cannot be trained or be successfully incentivized to sell EVs.

                Are you seeing the big picture here? Every EV on the road contributes to the reduction in carbon. You can even make a case that the ‘wealthy people’ should be encouraged even more as they’re typically replacing more environmentally unsound vehicles!

                • MPGomatic said

                  I love EVs but inequitable tax breaks for the wealthy are a bad bad bad thing.

                  Laws that reflect the desire of people? That really happens for common folks? The barometer is cash. Laws change for those with the will and means to pony up.

                  If one dealer doesn’t make the effort, the next one is free to do so.

                  Big picture? Um, yeah. The myopic “electric is the only way” view seals our fate. There are ways to reduce carbon that can have immediate impact. If we want to stand a chance, it’s all the above or nothing at all.

                  Elon has no skin in the game here in Jersey and until he finds some, he’ll never gain a seat at the table.

              • Yanquetino said

                Yes, you are the only one.

                Tesla received a federal loan –not a bailout or grant– which it has already repaid. Not to worry: those tax dollars are back in the government’s coffers.

                Or are you talking about all EV tax incentives? If so, they apply to all EVs, not just to the Model S, even to the antithesis-of-luxury iMiEV, simply to motivate all consumers, rich or poor, to break their addiction to fossil fuels.

                And, of course, let’s not forget that we tax payers also subsidize luxury cars like Ferrari, Mercedes, Jaguar, etc., by subsidizing the fuel that their owners purchase at the gas pump.

                • MPGomatic said

                  Musk’s greatest accomplishment – at this point – just might be paying back the loan and selling the stock so well. The reality distortion field is quite remarkable. When the bubble pops on this one …

                  Tax incentives for the less financially blessed to buy EVs isn’t evil. Heavens no. We should be filling our cities with SparkEVs, Focus Electrics, i3s, Volts, C-Max Energies, i-MiEVs and the 500e. I’ve driven them all. I <3 those cars. How many Model S have you seen parked at the curb in Manhattan?

                  And then there's the we bit of cash that CA pumps into the coffers.

                  I'm not arguing the oil subsidies. They should all end. Well, DUH. =)

    • evchels said

      Michael, I was especially thrilled to see so many enthusiasts not only show up, but stay for public comment even after the decision was made. Such efforts can seem underwhelming in the moment, especially when you’re not sure it makes any difference, but the show of support clearly made an impression. Good on all of you!

  4. jeffuren said

    Why didn’t the GM dealerships protect their customers from GM?
    Since you have to buy a GM car at a GM dealership BUY LAW, they seemed to have failed to do what they claim the law is for. Consumer protection.
    Maybe they should be part of the Federal investigation? No?

  5. I don’t think I can add any more than what has already been said about this wrong decision, in favor of the Coalition of Auto Retailers, but I would like to point out a little fact no one noticed in the past. For a number of years, (1966 – 2007) a small independent US based auto maker built and sold thousands of fine automobiles without a single dealership in this state. Avanti Motors built a very good reproduction of a 1964 Studebaker Avanti, called the Avanti II that met all current year safety standards. You can ask any owner whoever bought one straight from the factory, if there was any hint of a problem it was handled in an extremely professional and consumer friendly way; No dealership required!

  6. jstack6 said

    I think any state that doesn’t allow direct sales doesn’t get the sales tax. Since it’s an internet sale no tax should apply. That will make them change their little minds in a hurry.

  7. mikegreig said

    What a joke!

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