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Comment by dangus | Hacker News Reader

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/...

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

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 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).

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