In general the idea of laws essentially banning competition in the dealership market is a crap idea, manufacturer or otherwise.
Undoubtedly being protected from competitors is good for someone, but it is rarely the consumer that benefits. Its hard to see how car dealers could be the exception.
Thing was that by allowing dealers to open the business first, manufacturers could entirely offload that risk of opening a location that wasn't profitable, and watch the orders from the dealers. Anywhere that sold well, just open up your own store and undercut the dealer until he goes out of business and then return prices to what the dealer was originally selling for.
Putting in laws was meant to put a stop to that practice. Like I said, it's just something I vaguely recall reading on the internet so take it for what it's worth.
But I wouldn't bet on it, since Amazon already has all the people capable of doing anything in their pockets anyways.
Was there any legitimate basis for this fear though? Was this a tactic that was ever provably executed by a manufacturer? Or was it just a made-up scenario by dealerships to push these laws that massively benefit them?
Amazon of course denies that it does this, but the anecdata seems irrefutable to me.
They could easily undercut the dealers and drive them out of business. The law was designed to protect the dealers from the manufacturers.
We are seeing it more and more now in many markets and niches as manufactures are cutting out dealers that built the markets and selling 'direct to consumer'. The difference is that most manufacturers saw what happened to the car companies and are trying to carefully avoid having the same thing happen to them.
“Oh don’t open a Chevy dealership, in 6 months they’ll come in and undercut you”. And then there it is. Either you don’t open a dealership (fine) or the manufacturer builds a reputation for not undercutting dealers (also fine).
IMO the law was protecting special interests from the start. This is an example of poorly regulating capitalism.
Then again, Apple dicks its partners over and hasn't suffered much.
There are Apple stores but they don't really compete with the big box stores that sell Apple products. Though I would be interested in seeing data on where most Apple products are purchased from.
If so, I guess I'll have to eat my words, but it just really sounds like a hypothetical scenario the dealerships would have cooked up to try and push these laws that massively benefit them.
High voltage parts are a little different, but I expect that even that will change as demand grows and training becomes more readily available. Right now there are some real safety concerns there.
It kept more profits in the states with dealerships versus car manufacturers.
Let's say non-manufacturer revenue over a car's TCO is X. The largest portion of X will be spent on non-local goods and local labor regardless of who takes the profit, which has to be low enough to prevent stronger 3rd party service. It isn't like all cars would be shipped back to the factory for service.
But did it ever actually happen before those laws were put into place? Or was it simply the justification of the richest man in town creating a monopoly for himself?
It's almost like the interests of the market lead it to self-regulate or something...