Tuesday, August 10, 2010

Why can't auto manufacturers sell direct over the Internet?

Currently, GM's dealer network adds about 30% to the price of a new car.   In 2008, GM experimented with a direct sales alternative, a build-to-order sales model in Brazil for its Chevrolet Celta.  This kind of experimentation is unlikely in the US:
... direct manufacturer auto sales are prohibited in almost every state by franchise laws requiring that new cars be sold only by dealers. These bans on direct manufacturer sales are part of a broad array of state laws that bar manufacturer ownership of dealers and regulate entry and exit of dealers through territorial restrictions and provisions on dealer termination. Analysis of the economic effects of these laws has led some to conclude that they harm consumers and should be eliminated.(5) ...– state laws banning direct manufacturer sales, since they may [also] be curtailing development of a more cost-effective method of auto distribution.(6)

1 comment:

  1. This is really nice. Looks very professional and has all the other links and social media networks as well. Good job.

    Direct Selling Franchise