FTC to Host Public Workshop Examining the U.S. Auto Distribution System Workshop Will Explore Competition, State Regulations, and Emerging Trends in the Industry, Project No. P131202
A manufacturer should be allowed to choose its business model. Consumers will vote on its worthiness in the marketplace with their dollars. That is the accepted way in supposedly free enterprise loving America. Legislators should not over-ride consumer choice and force a manufacturer to sell and service through middlemen franchisees. Of course if a manufacturer has previously contracted with franchisees, the government should insure that the contracts remain in force. However, if a manufacturer has never had franchisees, it is against all reason for a government to force it to obtain them. Established automakers developed a business model early in the 20th century that involved franchisees. That was their choice. Here in the 21st century and the era of the internet, a new automaker might understandably choose a direct sales model. That is true for almost all other products, and should be true for automobiles. Let consumers make the choice - not established manufacturers and franchisees seeking to prevent competition from a new innovative American manufacturer by asking for interference from government. In any event, auto dealerships make little profit selling cars and much profit servicing and providing parts for them. Electric motors are simple and require little maintenance. Dealerships have little interest in selling electric cars. They do have an interest in stifling competition from the young and innovative American electric automaker Tesla Motors. So they collude with legislators who otherwise claim to be against excessive government regulation and intrusion in commerce. That is shameful and un-American. I hope the FTC is able to influence the states and courts to do the right thing for American consumers and new American manufacturers.