This is a law that has needed changing for a long time. There is no reason for the government to enforce a distribution model. For some manufacturers, the dealer/distributor model is great (this applies in all areas of business). In other areas, the producer may want to take on the distribution themselves. There is no doubt that car dealers provide a valuable service, but there’s no reason to think that manufacturers couldn’t do it themselves if they want to spend the money. Either way, the government should let the businesses and market decide.
Fisker said Foxconn has discretion of where it will build vehicles in North America for his eponymous company. But, the ban on direct sales makes Fisker less excited about the cars that will bear his name being put together in the Badger State.
“The one sticking point for Fisker — now, this is still Foxconn’s decision — but the one sticking point for me would be that I don’t want to start producing a car in a state where I can’t sell my car direct,” Henrik Fisker told Alan Ohnsman of Forbes. “If they change those (rules) I think they will be in the lead, but right now they’re not.”
Simon Sproule, senior vice president of communications for Fisker, told the online progressive news outlet UpNorthNews regarding the issue: “We are going to be investing with Foxconn a lot into this project, and we want to be building cars in a state that will allow us to sell those cars.”
Defenders of the law, including the Wisconsin Auto & Truck Dealers Association, say the ban on direct sales opens up more job opportunities and protects pre-existing automobile dealers.
I agree.
For instance, if the you buy a fire engine or truck or ambulance you can go directly to the factory and pick it up, if you choose and the law allows it.
Just another old law,like the minimum price law in Wisconsin.
The law should allow direct sales.
That said, it’s VERY easy for Fisker to stamp his feet over this, as he’ll sell–perhaps–1,000 of his products in Wisconsin every year.
KIA sells 5,000 vehicles every month in Wisconsin, and they’re not a ‘big player’ in volume here.
In practical terms: Fisker can very easily finance his model–at THIS time. If he’s actually successful in moving product, he’ll be begging for dealers, because dealers provide his financing AND space for his inventory.
I once chatted with a Young And Smart IT dweeb who told me that ‘there will be no dealers in 10 years’ (or about 5 years from now.) So I asked him how GM/Ford/Chrysler would finance all that inventory while purchasing/financing all the land they’d need for all those vehicles.
He became very quiet.
There will probably always be dealerships for the old guard. But what the Dealers Association is afraid of is Ford opening up their own dealership and cutting out the middle man. This same issue came up with Tesla years ago in WI and I had the same stance then as I do now. Screw the dealers. If someone wants to sell direct, you let them. If it is a bad experience, the customer wont buy.
Personally, if I were to buy new and I could avoid the entire dealership process, I would in a heartbeat. Just give me the price. Going to a dealership and haggling is annoying, and borderline discriminatory. The fact that a new car can sell to one person for one price and an identical car will sell to someone else at another is bad business practices.
Funny enough, I just saw the front of the WSJ and it has an article on Ford wanting to sell direct custom cars with a 4-6 week wait. Rather than have low selling models sit on dealership lots, customers would order the exact trim parts they want and then get it direct to consumer.
I can see that ruffling some feathers with dealers.
I agree with you Johnnyv.
Look how Carvana and other line places have changed the market place.
But online and they will deliver the car to your home.
Of course, buying a used car is more risky.
But buying a new car online would be excellent. Apply for financing online. Get the car hauled to your house and not deal with a dealer.
Silly question, but are places like Carvana allowed to operate in Wisconsin?
……say the ban on direct sales opens up more job opportunities and protects pre-existing automobile dealers.
I always cringe when something is not supposed to change because it might disrupt a certain segment of the economy. Like the “mon & pop” businesses needing minimum markup protection.
50 years ago, “mega dealers” were very rare. In West Bend, all the dealers were owned by local families – usually the owner was sitting visibly in the back room. There is a Ford dealer in Newburg (Lochen Ford) that still exists as a single unit dealer. Russ Darrow is the only other family name left from 50 years ago, but they have also morphed into multiple units & brands.
I have no issue with mega dealers as I think their volume in sales, inventory, and service is beneficial. But the thing is, the current dealers swallowed up a lot of smaller dealers and caused others to close. Imagine if all the “mom-and-pop” dealers had received special protection.
Bought a 2019 new from a Toyota dealer and never set foot in the dealership until I picked it up. Everything was done online. Inventories are online. Financing is online. You can find a pretty close estimate of the automaker’s invoice to the dealer for the exact unit you’re looking at, base numbers plus every option listed on the vehicle. The window sticker prices haven’t been a starting point for negotiation for quite a while now. I didn’t even think to ask for delivery, but I’ll bet for a fee they would have done it just to move a unit.
For those concerned about COVID, local Chev/Cadillac dealer offers to drop car off at your home for test drive, handle all transactions on line, and deliver the purchased vehicle to your door. They are promoting no need to step inside the dealership.
When I bought my 1999 Blazer I was able to go on line and locate exactly what I wanted. That system has only gotten better since then. One can even pull up serial numbers for incoming inventory. In fact, due to shortage of vehicles, a lot are being sold before they even land at the dealer. I have seen where those vehicles are prepped, a sold sticker put on the mirror, and then they sit out front until delivered.
From what I read at GM blog, it sounds like the future will be more like that – not acres of cars sitting on dealer lots. And by people searching, they are getting data that can accurately predict what will sell and ship accordingly.
Things are changing. Hope Wisconsin isn’t like one of those states that sticks to the past, like those states where you can’t pump your own gas, because self-service might put some pump jockeys out of a job.
But would you really want to buy a used car or even a new car without test driving it first?
Without comparing to other models?
I know I could never do that.
From what I read at GM blog, it sounds like the future will be more like that
To both you and jonnyv (who obviously doesn’t read very well)–good luck with that. GM, FoMoCo–NONE of them can do that in the volumes they need to run the plants efficiently. Single-piece demand flow is remarkably difficult to perfect–ask anyone who ruins a factory.
Your presumption is that every car will be delivered as ordered; on time; and with no flaws.
Sorry……
Dad, clearly you have that brain fog from COVID. I didn’t claim it would be for every unit. I am sure there will be generic units out on lots. I just reported what I read in WSJ today. I imagine it will be high end ultra trim models to start.
And even if it is 1000 units, it will piss of dealers.
And yes, I think you will be able to special order specific features in the future rather than packages.
My Buddy wants a Mazda something or other with a specific trim, but that trim only comes with the Turbo right now. And if it were up to him, he wouldn’t want the turbo. But he doesn’t have a choice if he wants all the other features. The future won’t be that way.
Ahhh, the Future!!
Progress!!
All Will Be Wonderful in the Future!!
I think you have brain-fog, too, but it’s from hallucinogenics, just like the condition of the WSJ’s writer.
Ah, the fantastical ravings of dreamers who don’t have to reconcile the realities of manufacturing and distribution of goods. Gotta have dreamers. Preferably in small measures.
@ Dad29 Your presumption is that every car will be delivered as ordered; on time; and with no flaws.
I didn’t presume that. And cars will still be shipped for inventory. There will always be buyers that either need to buy ASAP, or only buy on impulse.
In the 80’s a lot of cars were ordered out – that is how I bought my 1986 S10 Blazer, as did most people I knew. When I bought my ’92 GMC Jimmy S15, and my 1999 Blazer, I got exactly what I wanted because of the packages pretty much aligning with what I wanted. When I got my 2014 Equinox, I was very specific that I wanted the V6 & AWD. This was in August, and my dealer was able to locate one 100 miles away, and the dealer was willing to swap with my dealer. Of course, I had no choice of colors.
So I asked him how GM/Ford/Chrysler would finance all that inventory Well, now the dealers carry the costs with floor plan financing (Ally Financial, used to be General Motors Acceptance Corporation – GMAC), and pass it on to the consumer. I suppose the automakers would do the same – you know – finance and pass the cost on.
Mark, were you not bothered not to test drive it first?
Or did did you get a really good warranty or option to send it back within a couple of days if it was not what you expected or just didn’t feel right for you?