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
I am writing to support the direct to consumer sales model that innovative auto manufacturers such as Tesla Motors have developed. The franchise dealer model was developed in the early days of the automobile in order to allow the manufacturers to concentrate on building cars without having to concern themselves with sales or service. It has worked well for the traditional manufacturers but really is not beneficial to consumers. The addition of the dealer inherently adds to the cost of the vehicle because the dealer has to make a profit. In Tesla's case, the franchise dealer model simply does not work. Tesla's sales volume so too small for franchise dealers to really be interested. Electric vehicles are a new product requiring significant time to be spent by the sales associate to educate the consumer. Traditional dealers who handle multiple models will not want to devote the time when they can more easily sell a conventional gasoline powered car. Electric vehicles also require much less maintenance, which eliminates a large part of a franchise dealer's profit potential. I have owned 16 different cars in my life. The first 15 were purchased from franchised dealers. I always dreaded the experience because the purchase process involved dealing with high pressure salespersons who were never transparent about pricing. My 16th vehicle is a Tesla Model S which I purchased through a Tesla store. The consumer experience was much better. The sales associate provided education and assistance in ordering but applied no pressure at all. The prices are all clearly stated with no haggling and there is no dealer markup, preparation or delivery fees. I also feel that a manufacturer should be able to choose whatever sales model they wish. If the traditional manufacturers prefer the franchise dealer model, they are free to use it. However, Tesla should be free to use the model that benefits themselves and the consumer if they wish. This is clearly more of a free market approach. I would urge the FTC to support the direct sales model. Thank you.