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.

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.