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Comment by MikeTheRocker | Hacker News Reader

In contrast, buying my Tesla new was about as easy as any Amazon order. I don't know why other car manufacturers don't make D2C a bigger focus for their business.

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I don't know why other car manufacturers don't make D2C a bigger focus for their business

Because in most cases it's literally illegal. https://en.wikipedia.org/wiki/Car_dealerships_in_the_United_...

IIRC dealerships were required because manufacturers were screwing over customers before. So much of modern society is ultimately due to path dependence

Dealerships were required because the carmakers started consolidating and dealing with incumbents in a consolidated market is terrible. But it doesn't actually work because you're still ultimately dealing with them indirectly. The actual solution should have been to break up the Big Three, though of course that happened anyway as foreign competitors came into the market and the argument for continued bans on direct sales has essentially evaporated.

The exception is service, because that's actually a separate market and not just a middle man on sales in the original market. Prohibiting manufacturers from operating service centers and leaving it to independent mechanics is essentially a ban on vertical integration and still makes a lot of sense. Because service for a particular model of car is in many ways back to being a consolidated market, since that model may need specific parts or tools and you still want to maintain a competitive market for service for customers with that model of car. You also want to make sure mechanics can service cars of multiple makes, since that fosters competition too.

Tesla sells cars to most states D2C so while I agree it is unfortunately illegal in some places, it doesn't seem to be omnipresent. I think mainstream vendors are just slow to sacrifice their relationships with dealers, who are currently 100% of their sales.

This is why it's important to note that the group arguing against the FTC is not the automakers, it's auto dealers. the NADA is the associate of auto dealers, not manufacturers

I agree, though I think in order to be fair, we need to do an apples-to-apples comparison.

Most people go into a car dealer expecting to haggle. For better or worse, we know they're going to screw around and so we're prepared to do battle. If you go into it with a different mindset, it can be pretty painless most of the time.

Walk in the door and offer them MSRP. Then fill out the DMV registration paperwork, give them your payment, and leave with the car. It won't be quite as smooth as Tesla because you're not pre-filling this out online, but it is still pretty painless.

During the pandemic this wouldn't work because the market was commanding premiums on available stock. That means mark-ups from dealers, but Tesla is hardly immune -- go look at what a Model 3 was priced at later in 2022. The difference is that dealers at least have -some- competition. Tesla just tells you what you must pay.

> The difference is that dealers at least have -some- competition. Tesla just tells you what you must pay.

So does Dell or Samsung. That doesn't mean they have no competitors.

And the carmaker is ultimately deciding what the dealer has to pay, so what's the difference except another middle man wanting a cut?

It's pretty much the same argument you can make for any store. Why don't we do manufacturer-to-consumer sales for everything?

Because avocado farmers don't want to set up a retail store selling exclusively avocados in each and every little town, they want to sell them in bulk to grocery store chains.

Manufacturer-to-consumer sales make the most sense for big ticket items and things that can be easily sold over the internet. Retail stores can make more sense for perishable goods and things you might want to inspect before purchasing and convenience purchases and things with a high ratio of shipping cost to price etc.

My Polestar purchase was essentially the same way. PS put restrictions on what the dealership could actually offer as addons (tow-hook, overhead rais for skis, and all weather door mats; all official addons), which meant that I walked in, signed the deal, and was out in about 30 minutes.

Still not as ideal as other countries, but cest la vie.

It's literally illegal to do D2C sales of cars in a lot the USA.

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