Editorial Calls For Allowing Direct Sales By Automakers

An editorial in USA Today comes down on the side of the manufacture’s right to market its product as it sees fit and takes state governments to task for rewarding the politically powerful auto dealer industry with a guaranteed right to play the role of middleman between producer and consumer.

The paper sites the example of a Tesla showroom in the Virginia suburbs of Washington, D.C., where you can climb into a Model S, but don’t ask to drive one. That’s not possible at this location where state law prohibits you from buying or even getting a price quote ($86,020 for a red model with a sunroof and retractable door handles).

The USA Today editorial says, “Government did not require the airline industry to continue paying commissions to travel agents when the Internet made them expendable. It did not bar sports leagues such as the NFL from starting their own cable channels. And it should not tell car makers that they need to sell through third parties. That thwarts both innovation and competition. The paper concludes, “Ultimately, it should be up to the automaker to choose its sales strategy. Tesla should have every right to go it alone. And the same goes for other automakers.”

In a matching op-ed, Peter Welch, president of the National Automobile Dealers Association, defends the status quo with the argument that it’s been done that way for over 100 years and that both Ford and GM have failed in their attempts at direct sales. Welch claims that states should decide licensing issues and are best positioned to “decide level of accountability, regulation and competition that is best for their citizens.”

Now that the state of New Hampshire has defined a posthole digger as a “motor vehicle”, shortline equipment manufacturers and this Association will need to keep a much closer eye on what’s happening with auto dealer legislation in every state and province. Look for articles in this publication, along with tweets from @Shortliner.