Hacker News Reader

Comment by margalabargala | Hacker News Reader

> Small anecdote: I visited a GM dealership this week and the salesperson told me Super Cruise was not enabled for test drives. The excuse was pretty weak, like the dealership would have to pay for the service or something. GM might have the technology but they are completely bungling the strategy.

That was a your-dealership issue, not a GM issue. GM doesn't run the dealerships (though they sure have plenty of influence).

I test drove the Silverado EV a month ago and got to try out super cruise.

View on HN

That's a "GM's business model" problem, which is again a GM problem.

The top-selling EV maker in the US doesn't have any dealerships, so clearly it's not an insurmountable problem. GM just hasn't prioritized surmounting it.

To be fair to GM, Tesla basically had to be a brand new auto company and work through a whole bunch of legal loopholes and battles just to have their direct sales model. GM and the rest of the legacy automakers are essentially bound to the dealership system and the dealerships represent a much larger lobbying base than the automakers themselves.

We are seeing this play out with VW’s attempt to direct-sell Scout vehicle's and immediately getting challenged/sued by dealerships over it. [1]

https://money.usnews.com/investing/news/articles/2024-10-25/...

GM and the other automakers should be lobbying to change the dealership laws then.

They do.

Automakers started out with direct sales. Anti-trust issues quickly arose with that business model and that’s where we got dealership laws, as imperfect as they may be.

The document is rather one-sided and slanted, but I think it’s interesting to see how a dealership association explains their perspective:

https://www.nada.org/media/3267/download?inline

Of particular interest is warranty issues. Tesla has an extra-strong interest in hiding recall-worthy issues and preventing warranty service from occurring since their service department is owned by the manufacturer.

A car dealership has the opposite incentive: every dealer-performed warranty service is a payment from the manufacturer to the dealer.

Finally, even if GM is lobbying to do direct sales, dealerships employ more Americans than the carmakers and parts manufacturers. Their lobbying group is larger and more local.

Dealerships also make most of their profit from the service departments which is why they don’t really like EVs. No longer do you need to go in every 3-6 months to get an oil change, belt replacement, spark plugs, etc.

Oil changes are a minority ofincome and the rest is far cars old enough that the owner is going to a third party mechanic.

They're a huge opportunity to upsell though. Especially to people who are likely to get out of warranty work done by the dealer.

1. There are still service items on a Tesla that are relatively frequent. Tires rotated every 6,400 miles, brake calipers cleaned and lubricated yearly for northern climates with salted roads, cabin air filter changed every 2 years, and two other service items every 4 years.

2. This is technically a tangent to the issue at hand. If Tesla was a gasoline vehicle startup they would have the same incentives to avoid dealership franchises, perhaps an even stronger incentive.

3. The fact that vehicle service is the most profitable part of the business is a great argument for the dealership model. Tesla owning their own service centers means that they are directly incentivized not to fix reliability problems in their vehicles, while all the car companies who have to pay out dealerships to handle recalls and warranty claims have a direct incentive to produce a reliable vehicle. Lo and behold, Tesla is about halfway down the vehicle reliability list according to consumer reports. At least they're better than Chrysler?

> A car dealership has the opposite incentive: every dealer-performed warranty service is a payment from the manufacturer to the dealer.

Wouldn't this be served just as well by having independent repair shops certified by the manufacturer to do recall and warranty repairs, without prohibiting direct sales of vehicles?

Sure! How many of those does Tesla have?

But now you're arguing for right-to-repair laws or similar rather than prohibiting manufacturers from making direct sales.

I would say that laws covering right-to-repair are almost entirely a different subject than laws governing retail competition.

Being forced to buy a vehicle from the manufacturer would be exactly like being forced to buy Indiana Jones and the Great Circle only from Microsoft. But it's a lot better to be able to buy it from multiple game stores, many of which compete on price.

https://www.cheapshark.com/search#q:Indiana%20Jones%20and%20...

Overall I think it's totally fine that Tesla wants to sell cars direct, and any manufacturer should be able to. But they should also be obligated to sell to dealerships at a fair price (they shouldn't be able to just pretend that their own selling process has no cost associated with it).

GM can’t match the lobbying power of local dealers in the state houses. Every state rep has a dealer or two in their district, and they employ staff who vote.

And, to be fair to the dealers, there is a long history of the makers trying to screw them over, and the public, too.

The dealership model is an anachronism from the days when the Big 3 US automakers were basically a cartel with a lock on the market, and predates the internet. For new sales it has no real advantages over what Tesla is doing, and for service the public would be better served by strong right-to-repair laws so people can have their vehicles serviced at any independent mechanic (or do it themselves).

I could do a undergrad essay on how the dealership model is bad for the manufacturers, which would boil down to how Indian motorcycles failed (which was also due to mismanagement). However, the VW scouts are an absolute abomination that should be cleansed from the earth.

They aren't going to be any good as an off-road vehicle, the approach/departure angles are horrible. They will also be way too heavy, just as a function of being an EV. Plus, the styling is absolute garbage. I've owned a scout 80 for 18 years, it was my first vehicle. I owned an OH scout for longer than they have been collectible. This new scout doesn't have any styling cues to any prior vehicle, it just looks like if you asked an AI to generate an off-road truck. And they even had a better example, the new broncos absolutely hit it out of the park. Line I E if those up next to a mid 60s bronco and you can see the resemblance, which is why Ford did that in their marketing. These new VW scouts, if you park them next to either an 800 or a scout 2, don't even look like the same lineage. They are just an abomination, and the only car company I'd trust less with shepherding the scout brand would be stellantis2. We've seen how poor of a job they've done with the jeep.

And the stupid part is,most people don't and have never understood why the original scout was good. They were an overly heavy, underpowered, and expensive vehicle. But, they were a tremendously capable off-road vehicle, my stock scout 80 has gone places a modern Rubicon with lockers couldn't go. It's down to a very fortunate suspension design and stupidly low gearing.

Simple and rugged will beat "sophisticated" every day of the week. Underpowered is an asset because you don't break shit. Simple is an asset because you can keep it running. Steering box NLA? No problem fit one from a different vehicle. Axles? NBD just need some U-bolts, maybe some custom linkages, and any other solid axle of similar dimensions will do. Trying to make cars into some kind of disposable appliance is incredibly short sighted.

I get all that, but I want a new scout. Bad.

They're never going to make enthusiasts like you happy because the vehicle needs to sell to a mass market, not the kind of person who has owned a Scout 80 for 18 years.

I think you're not in a marketing mindset if you think that any significant amount of people are to buy a new Scout for off-roading. Premium-priced vehicles are more about image than the implied capabilities of that image.

Porsche sells more four door vehicles than two door sports cars. You might say that's not a real Porsche in the spirit of a Porsche, but it is what it is. It sells, and the average person doesn't need a two door car with no trunk or an off-road truck that is painful on the road. They usually need a family vehicle for mundane domestic life.

GM controls the profits the dealers make. They can easily incentivize quality training

Business model enforced by the government.

And for good reason. The whole point of the regulation is to assure that there is someone nearby for the owner to get a vehicle repaired and be able to buy parts.

ahem Guess what Tesla has a ton of problems with?

Edit: there are a whole lot of people replying who seem unaware that I was referring to new car customers who have a vehicle which is broken under government-mandated warranties, but also that:

- The majority of manufacturers have long required proprietary diagnostic tools (the OBD-II functions in your car are only useful for the most basic diagnostic info, cannot adjust parameters, and cannot trigger diagnostic procedures such as cycling a valve or motor.) That is why some states and countries have right-to-repair laws. Automakers responded by shifting all that stuff to work only over telematics, and then claimed that online websites were not "tools."

- At one point car companies were doing bullshit like shipping parts with electronics in them "uncoded" (not uncommon, VAG does this) and not flashed with any firmware. Volvo did this. The firmware could only be flashed by a dealer, and it required them to plug the car into their internet-connected diagnostic tool through which servers in Sweden would encrypt the firmware for that specific VIN number and module, which could only be decrypted by the main control units in that specific car - and transmit it back to the technician's diagnostic tool.

- Teslas require software/online tools only provided to Tesla service centers and technicians

- You cannot buy parts for a Tesla without providing them with the VIN number of a car you own and which they still consider roadworthy. Tesla has a very arbitrary process for declaring vehicles to not be roadworthy, with relatively minor collisions triggering it, whereas vehicles nearly totally destroyed often are not declared unroadworthy and their VIN can be used to purchase parts

- Tesla does not distribute parts via third party distributors such as Worldpac, and prohibits its OEMs from selling parts, which is extremely unusual. You (and your independent mechanic) can only get parts directly from them - if they'll sell you the part at all.

The laws requiring dealerships and that they be independently owned were created because in the early days of the auto industry, people were getting endlessly screwed by automotive manufacturers producing cars that would break within weeks or months, did not have parts available for them at all, and the company would dissolve right after a production run so that customers had nobody to go after for damages.

The reason for requiring it be an independent business is simple; the state government wants to see that a local business has judged the manufacturer to have their shit together sufficiently enough to want to do business with them, and they won't be left holding the bag.

Is the only answer subsidized nepotism to the tune of nearly 7 figures annually? Seems like the wrong cloud of regulations.

It is widely known in America that dealerships are the worst places for repairs and that c independent mechanics are generally better. I discovered this myself slowly over time.

I buy my parts online generally. Doesn't matter if there is a Chevrolet dealer in my area

Yea generally it's a slew of other laws that mandate the opening up of vehicles to aftermarket components that makes it viable, not necessarily dealers who just installed overpriced OEM parts.

> The whole point of the regulation is to assure that there is someone nearby for the owner to get a vehicle repaired and be able to buy parts.

> ahem Guess what Tesla has a ton of problems with?

If the goal is to allow people to have vehicles repaired, then mandate right-to-repair laws, mandate that all auto manufacturers must fully document how to service the vehicle.

The problem with Tesla isn't the lack of dealerships, it's that even if you go to a normal auto repair store, Tesla won't sell repair parts nor provide detailed enough repair manuals. Tesla will void your warranty for having someone else fix it.

If the regulation is meant to allow consumers to repair their vehicles, then it should say that.

People incorrectly throw around the term "rent-seeking" all the time, yet this is a case where it would be correctly applied. The dealerships petition the government to enforce the franchise model of car sales to block potential competitors. Like Tesla, but also mega-chains like CarMax.

The top-selling EV maker in the US also has:

vehicles regularly catching on fire for no reason

vehicles driving into the back of emergency vehicles, slamming on the brakes in the middle of highways - both because the CEO decreed that RADAR/LIDAR isn't necessary

Issues with its "self driving" randomly swerving at objects, pedesrtians, cyclists, other vehicles...

Enormous service/parts/bodywork backlogs

vehicles blacklisted by insurance companies becaue of high crash rates and repair costs

windows that randomly shatter

drivetrains that fail because you drive them in too heavy a rainstorm

a truck that cannot be driven in the snow (snow reflects light off the DRL bar, blinding the driver, the headlights getting blocked by snow, and the vehicle is stymied by barely a few inches of snow):

https://www.tiktok.com/@molesrcool/video/7446853436198358303...

GM doesn't have any of these problems (except for a small number of Bolts which had defective cells made by LG - all replaced now, and given extended ten year warranties.)

> drivetrains that fail because you drive them in too heavy a rainstorm

Not even that, colleague's Model 3 died because it was parked out in rather normal european heavy rain over 1 night. It just completely died.

Tesla service center just took it and replaced it without any questions - clear sign this wasn't an exception and it was well known issue at that point.

No, not really. Safeway's advertising and store layout isn't directly a Coca Cola problem business model problem. They care, they have some influence, but if the one seller goes under for being crappy another will pop up to take its place.

This is just a car dealership tying its hands behind its back and not competing well. If it isn't widespread it isn't a GM problem.

Safeway's store layout is definitely Coca Cola's problem. That's why they pay for shelf space and in store displays.

The car dealership isn't going to "go under" since they have an exclusive franchise. Presumably, GM isn't incentivizing them to sell super cruise.

An reasonable alternative would be for GM to have a "dealer license" mode for qualified dealers (for example, training), where they can get it enabled until the sale is complete.

Reply on news.ycombinator.com