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Comment by Shivetya | Hacker News Reader

You do understand that the dealer model came about to allow the manufactures to maintain production without having to directly deal with changing of sales patterns throughout the year don't you?

The Faustian bargain if you will was dealerships were given certain deals by the manufacturers to protect their ability to profit. States got involved later, where there was money to license such as well as to keep manufacturers from stepping into a solid market to brush aside the dealers who forged it.

It was a solution fit for its time and still is in many cases. When Tesla's support falters who you going to yell at? Fellow disgruntled owners on a message board? Not saying it will, but you who goes to bat for you when sales are direct?

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We can have distributors without having them protected by extensive federal and state law, though in such a case distributors would be fewer. Protections originated in the 1920s, when dealers invested in the manufacturers and could be yanked by carmakers into buying cars they couldn't sell. Dealers began lobbying governments to maintain and increase protective laws, and have done so successfully ever since even though carmakers have long stopped seeking investment from their dealers.

> However, theory and evidence suggest that the protection that automobile dealers have obtained from local legislatures has been to the detriment not only of manufacturers, but also of consumers, resulting in higher cost of retailing and higher prices for cars, inflexibility of the dealer network, and a lack of innovation in car distribution.

http://faculty.som.yale.edu/FionaScottMorton/documents/State...

Fisker failed, and you don't see dealerships reverse engineering the electrical system or building battery packs.

Quite frankly, if the company fails, you are out of luck, dealerships or no dealerships.

"You do understand that the dealer model came about to allow the manufactures to maintain production without having to directly deal with changing of sales patterns throughout the year don't you?"

I do, and it is entirely irrelevant to my point. You asked for an explanation of how sales can be good, even when the dealership experience is bad. I provided an explanation that depended on the existence of legislation to protect dealers. I wasn't debating the merits of the legislation to protect dealers, just noting that it exists.

This is quite silly. Car manufacturers sell directly throughout the rest of the world. It's working for them quite well.

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