MI Dealers, GM Unite to Block Tesla New-Car Store
|   Sunday, November 02, 2014
Michigan has become one of the latest states to effectively bar the sale of Tesla electric vehicles by the automaker's factory-owned stores.

The MI state auto dealers association asked the legislature to extend the state's franchise law to cover factory-direct sales to consumers. The bill has been signed into law by Gov. Rick Snyder. GM joined the dealers.

The legislative action extends new-car franchise sales rules to factory-direct stores.
If an outlet selling cars does not have a license, it cannot sell cars in MI. Previously, the law only covered franchised dealerships.

The interesting fact about this situation is that like an Apple store or a Gateway computer retail store the Tesla store is owned by the manufacturer. The store is not owned by an independent dealer acting, under franchise, for the manufacturer. The operative question here, though, is this: how can a manufacturer, which owns the car store, be a franchise of itself

Now, it appears that the only business where manufacturers are not allowed to own their own stores is the auto business. Instead, this law seems to require that all car stores now be franchised.

This runs counter Tesla's preferred sales model where it owns the store. This allows Tesla to ensure the quality of the dealership, the vehicles and the sales process. Further, it means that pricing remains uniform.

Dealers, who would undoubtedly like to have access and control of Tesla sales, despite the electric carmaker's preferred sales model. Tesla loses all control of the sales process under MI law. Dealers apparently believe that they are due the ability to sell Tesla's and if they cannot, no one can.

Under the newly revised MI franchise sales rules, dealers also have the ability to charge customers extra fees.
PHOTO GALLERY
Comments:
Name required * Email required Email not valid *
Comment required *

Latest news
Sunday, August 19, 2018 10:30:31 Nissan is present at the Detroit Auto Show with a compact concept SUV called...
Saturday, August 18, 2018 10:25:17 Another Hyundai premiere at the Detroit Auto Show is the new Veloster N,...
Friday, August 17, 2018 10:20:24 The South Koreans from Kia presented at the Auto Show in Detroit the new...
Thursday, August 16, 2018 10:15:59 After a massive promotion campaign, the US subdivision of Hyundai has officially...
Wednesday, August 15, 2018 10:05:55 Acura boasted that the new RDX is 100% made in the United States and is...
Tuesday, August 14, 2018 09:54:10 At the core of the new VW Jetta is the MQB platform, which is already used...
Tuesday, August 14, 2018 09:50:38 General Motors held the world premiere for the new generation Chevrolet...
Monday, August 13, 2018 09:45:39 The Ram Trucks brand, currently belonging to Fiat Chrysler Automobiles,...
Sunday, August 12, 2018 09:39:52 Ford brought the new generation mid-size Ranger pick-up at the Detroit Auto...
Saturday, August 11, 2018 09:34:13 At the Auto Show in Detroit, American car manufacturer Ford celebrates the...