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Comment by moritonal | Hacker News Reader

I'm trying to understand it the same. How is this different to them saying "you have to buy airline tickets via a travel-agent?", or "you cannot buy from Intel, only eBuyer?".

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These dealer protection laws made sense decades ago, they no longer make sense, but dealers bribe our politicians to protect them. That is all it is.

How did they make sense decades ago? What changed?

There used to be a very few number of car companies who held a lot of power over dealerships and used to abuse that power, which led to laws protecting dealers in ways that at least arguably made sense at the time, but don't anymore.

Do we now have lots of new car company? ( i don't think so )

Does car company now have less power? ( with subscription and OTA updates , I think they have more power than ever)

> Do we now have lots of new car company? ( i don't think so )

Yes, we do. The "Big Three" of Ford, GM, and Chrysler now face significant competition in the US from Japanese, German, Korean, etc. carmakers.

Euro / Asian auto companies exist now

All new electric car companies too

I think if we removed the dealership (sometimes called "franchise") laws that prevent manufacturers from selling directly to consumers, we could see more competition not just between existing players but also lowers the barrier for new entrants into the market.

Tesla and Rivian, for example, wouldn't even be able to exist without this, the cost of setting up new dealerships is enormous otherwise.

I'm not an expert in this topic, but coming naively to it, it strikes me that direct to consumer retail of all types was harder before the internet, which required more middle men to distribute goods.

My understanding of the history of this system is that auto manufacturers wanted a way to dump their inventory reliably and so independent dealerships came into being. Then the dealership owners got rich and influential enough to essentially get themselves enshrined in state law in multiple states. But someone else can fill me in if that’s incomplete or not quite correct.

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