would the big auto makers make money if they went 100% internet selling?

[vash]

..like Tesla?

Our Tesla is waiting for us at the store. i say "store", because it isnt a dealership. the showroom is as big as the Old Navy store in the next building over. (bummer we live in the boonies and they wont deliver.)

but the shopping experience was a joy. i had a more difficult time buying boots.

paying for it, buying the insurance, choosing options was all simple clicks of the mouse. i cannot imagine the cost of running those mega-dealerships. it has to be astronomical.

think it would cost too much to streamline at this point?

[908/930]

Different setup, dealers are really service centres that sell cars. Usually not owned by the big three.

[john70t]

And the new car arrives with a BB inside the rain gutter rail.
No exchanges without a 20% restocking fee.

[GH85Carrera]

When my wife decided she wanted a Macan she researched and went to the Porsche web site.

Porsche will let you "build your car" and configure it with your options. She built her car with the options she wanted, colors, packages the entire thing. Porsche has a "suggested" price for the vehicle as you want it. We printed that out, and also sent it to USAA which has a car buying service.

Our local dealer is not part of the USAA car buying program, but two dealers in Dallas were. Both gave us the same quote which was several thousand off the suggested price. We walked into the local dealership and handed the salesman that printout and quote from two other dealers. I said if you will match those offers, we have a deal. If not, we are driving to Dallas to pick up the car when it is ready in a few months.

The local dealer matched the price. All they had to do was place the order with Porsche AG and three months later it arrived. They did of course do the dealer prep and file the paperwork for the title and slap a temp tag on it. The total price was just what we were quoted.

Now the local dealer did indeed let us test drive a Cayenne, a Macan Turbo and a base Macan to get a feel of the differences. Right away we knew the Cayenne was too big, and they let us take a Macan home overnight for an extended test drive.

They did all the up front work and all of that was a pleasant experience. I really wanted to buy from them, and they all know me as a long time PCA member and they did not even try the old add on BS. It is a 2017 model my wife wanted, and it has been flawless.

[cockerpunk]

dealers are costly middle men that regulated themselves into the marketplace and provide little/no value for the customer.

like so much of the "free market" they are actually legally required in most states. in most states you cannot buy a car from the manufacture. tesla is of course the car company fighting these laws. but they have been on the books for 70+ years in most cases.

after killing car dealerships, the next indstruty we need to kill is realtors.

[911boost]

I ordered my Land Cruiser directly from Toyota, not through a dealer. A perk of my job I suppose...

The manger of the local dealer was a complete d-bag about the whole experience. I had been working with a sales guy for a while as I was on the fence and he called me when one came in (that was already sold) so I could come look in person.

When mine came in they called me with the price $10K more than I was paying and then when corporate Toyota called them, it was an honest mistake. They tried buying it from me, delaying getting it to me, the whole time throwing the salesmen under the bus.

I went in and the manager pulled me aside and he flat out told me at the price I was paying the sales guy was getting $0 commission and the dealership was not making any money. I showed him the invoice that had more than enough to cover the paperwork and dealer prep. He backed down at that point.

In the end, I wrote a check for it, and then wrote another check for the sales guy because I thought it was BS he was getting punished. I had zero issues giving him some $, he earned it.

It would have been easier had I been able to take delivery online just like I ordered, but the state makes that not even possible.

My online selling experience with Carvana was awesome and I would do it again.

Bill

edited to say for once cocker and I agree on something.

[porsche4life]

Honesty the manufacturers would make a ton of money if the cut out the dealers. No floor plans to worry about, no dealer markup to worry about, etc. but like has been said above the dealers managed to get laws in place to keep that from happening.

I avoid dealers at all costs. If I can buy lightly used private party, I’ll do it every time. The amount of BS the dealers stack in cars these days is nuts.

I took this screenshot of the mandatory “fees” in a used car locally at a dealer. By the time you tack on their BS, and pay taxes this car will end up creeping close to 25k.

[rcooled]

Originally Posted by 908/930

...dealers are really service centers that sell cars.

↑↑ This ↑↑

Originally Posted by cockerpunk

...after killing car dealerships, the next industry we need to kill is realtors.

Then after that, the concert ticket scalpers...er, I mean brokers...with their outrageous 'service' fees.

[john70t]

Apples and oranges. The music industry is a monopoly but I agree.

And that is the controlling issue here: Monopolies.

Do you really believe those cost savings will still be there in ten years?
A hundred years?

As much as I hate to say it:
Eliminating the middle-man eliminates local jobs and RE/zoning/etc along with all the infrastructure involved.
They are a buffer.

Our economy could logistically be reduced to a smartphone app and delivery ......(from somewhere in the world) .......

But what would be the result?

[stomachmonkey]

Originally Posted by 908/930

Different setup, dealers are really service centers that sell cars. Usually not owned by the big three.

Yes.

My brother runs the shop for the largest Toyota dealer in S. Florida.

That's where the real money is made.

The manufacturers need service centers to maintain brand equity.

Manufacturer warranty work performed through dealers the first few years helps create positive feelings for owners and establishes brand loyalty.

How else does a manufacturer deal with a recall of millions of vehicles for a critical defect?

Sure they could open service centers and do away with dealers but now they are operating cost centers.

There is a tremendous amount of legacy infrastructure and operating procedures that would need to be undone and rebuilt.

It would take a decade and billions to do.

By the time you recouped just the cost much less started to see profit there will be a better way to do it.

Tesla can do it because they are starting from ground zero and are really still a boutique niche manufacturer.

[jyl]

Dealers make most of their profit from service. It’s been years since I last invested in the stocks, but it was something like 2/3.

[lindbhr]

I read that Ford is changing their business model to sell direct to consumers. The logic is that as long as customers are willing to wait, they get exactly what they want and the dealers don't carry inventory. They still pick up their car at a designated dealer. A throw back to the 1960 and '70s I'm told. Dealers are a little nervous because unless other manufactures follow, they may lose sales to other brands with inventory on the lot. IIRC, Ford wanted 35-40% of their future sales under this model.

[Brando]

North America is a unique beast in the world of auto sales. Pretty much every other country has a build-to-order approach. Dealers only keep demo and used vehicles on the lot.

OEMs would prefer that approach in North America for some of the reasons above: Dealers are the cause and solution to the problem.

[cockerpunk]

Originally Posted by Brando

North America is a unique beast in the world of auto sales. Pretty much every other country has a build-to-order approach. Dealers only keep demo and used vehicles on the lot.

OEMs would prefer that approach in North America for some of the reasons above: Dealers are the cause and solution to the problem.

dealers cheated.

they bribed (eh hem, lobbied) to make sure they had to exist, legally.

again, like so much of what on the surface looks like a free market, itsn't. dealerships exists not for market reasons, but in spite of market reasons.

[cabmandone]

I think a certain segment of society will always like to "kick the tires". A dealership gives them the ability to do that. Had I just gone with what I read, my wife and I would own a new Ford Edge or Explorer rather than a new Toyota Highlander. Some things you just can't do online.

[flipper35]

The dealership is the customer of the manufacturer.

[Steve Carlton]

Originally Posted by cockerpunk

dealers are costly middle men that regulated themselves into the marketplace and provide little/no value for the customer.

like so much of the "free market" they are actually legally required in most states.

Please elaborate on the net cost to consumers if all brands followed the Tesla model. Also, where would GM, Ford, Honda, Toyota, Porsche, et al come up with a system of dealerships to facilitate sales and service?

Are you aware that owners of dealerships invested millions based on a franchise agreement? Perhaps you’re confusing a legal agreement vs a legal mandate?

[KNS]

Originally Posted by stomachmonkey

Sure they could open service centers and do away with dealers but now they are operating cost centers.

I remember about 20 years ago or so there was a factory Honda service center in Chandler or Mesa, AZ (or somewhere in the east Phoenix valley). Maybe it's still there.

Honda signage on the building, factory trained techs wearing Honda uniforms, genuine Honda parts but just service, no dealers/sales people. I thought it was a pretty cool idea.

[look 171]

Originally Posted by cockerpunk

dealers are costly middle men that regulated themselves into the marketplace and provide little/no value for the customer.

like so much of the "free market" they are actually legally required in most states. in most states you cannot buy a car from the manufacture. tesla is of course the car company fighting these laws. but they have been on the books for 70+ years in most cases.

after killing car dealerships, the next indstruty we need to kill is realtors.

and don't forget to kill off unions and all other social services. Doctors? Forget them. Just call in for a antibiotics and your fungus feet will heal itself in no time.

[GH85Carrera]

I can't imagine buying ANY car or expensive gizmo like a car without seeing it in person, test driving it, and looking at the options.

Yea, I can check out the options and such on-line. Does that Telsa store have cars there to test drive and experience the car first hand?

So instead of a dealer network one just goes to a place to pick up the car. Certainly every car ever made will at some point require service or repairs. How is that handled?