From a DOJ analysis:
> Auto production is a capital-intensive business and a franchise system allowed manufacturers to concentrate their resources upstream while accessing capital through franchise fees from independent entrepreneurs at the retail level.
Given capital availability and resources at the time, it made sense for the auto makers to franchise.
https://www.justice.gov/atr/economic-effects-state-bans-dire...
Dealers love to tell us how useful they are, but then they turn around and lobby for their privileged position to be enshrined in law and enforced by the government. Does not compute.
It's stuck between a rock and a hard place.
If there's no value in me buying a screwdriver set from Home Depot I should be able to buy it from anyone else, including the manufacturer.
In other words, there's no fundamental reason or "right" that says a dealer must exist between a manufacturer of a good and the consumers of that good. Forcing such a structure is artificial and causes problems.
For example, lots of people hate the car buying experience and dealing with a "mafia-like" (as a friend put it) dynamic between hungry commission-based sales people and the manager in the back. The whole process is disgusting. It took three hours to get out of the dealer last time I bought a car and it was a brawl to not get screwed.
In the auto business dealers can be horrible places to walk into. The other day one of my friends at the gym bought a used car. She got royally screwed. I didn't tell her because it'd break her heart. They did the old "let's talk about the monthly payment" trick. She is mathematically challenged and couldn't have managed the stream of information during the negotiations. She will be paying $24K for a $10K purchase.