Would it be possible for automotive manufacturers...

... to sell cars direct?

Basically cut out the middleman to bring in more profit per vehicle?

Sell cars for the same price as dealerships so the dealerships can't complain. Dealerships would still have service departments and showrooms.

Distribution could be tricky...

I think a law or regulation would have to change for that.

I think Ford tried to sell cars direct through the internet but it fell through.

I wish they could though, if for no other reason than it would bring some stability to the car market. If dealers had to compete with the factory who would be offering cars at MSRP only alot of these ADM stealerships would go away.

I know there is a law against that. Not sure what the details are or what the history of the law is but I know it exists. Albet probably fully supported by a strong dealer network.

Aside from the franchise laws that prevent it, I think overall the automakers rather like not being directly involved in the retail end. Let's face it, selling cars is a messy, sometimes slimy business. Better that a third party be the one pissing everyone off and providing a buffer to the OEM. Kinda like when the news that Bill Heard was shutting down ... lots of stories came out about people that absolutely hated him, but not too much bad stuff about GM. Had it been GM that owned those dealerships, they wouldn't have had that kind of insulation.

They would love to, but the law prohibits such sales.

Dealerships aren't so bad, you just have to be willing to walk out and find a honest one.

It's considered "Price Fixing." That's why the manufacturers can't sell direct to consumer. They have to set an "MSRP" and let their dealers decide what to actually sell the vehicle for.

It's considered "Price Fixing." That's why the manufacturers can't sell direct to consumer. They have to set an "MSRP" and let their dealers decide what to actually sell the vehicle for.

How is it that other industries (consumer electronics comes to mind) are able to do this?

It's considered "Price Fixing." That's why the manufacturers can't sell direct to consumer. They have to set an "MSRP" and let their dealers decide what to actually sell the vehicle for.
Price Fixing just means GM cant set the price. There is no general law that prevents them from selling factory direct, many industries do. Im sure their franchise contract with their dealers forbids it, though.

I'd always heard that price fixing concerns were one of the reasons, for dozens of years now. Regardless, like others have said GM doesn't have the cash for the lawsuits dealers would bring.

Well, if they did, they'd still have to have some sort of outlet available for people to test drive the cars since not many people are going to be willing to buy a car they haven't driven.

And they'd also have to still have places for people to go to get warranty work and maintenance done.

So you still need at least a partial sales force to demo cars and a service center... what's left to strip out of the equation?

I'm thinking of companies like Dell where you can order online, at a Dell store or you can do like my wife did with this laptop and just go to Wal-Mart to buy it. Naturally it is a lot easier to ship a laptop than an automobile, so there would have to be hubs or outlets that keep an inventory on hand and take regular deliveries.

If they could scrape up the cash, GM could buy out dealerships or warehouses. Then go back to the way Saturn used to sell cars. The price is on the sticker and there is no haggling. You don't haggle with Dell when you buy a computer online from them.

You would have a completely different kind of car salesman where they don't even have to know anything about the cars. They would get paid hourly whether or not a car sells.

It looks a lot like a dealership, but the only name on the building is General Motors, Chevrolet, Buick, Saturn, etc.

The closing of the Bill Heard dealerships is what gave me the idea. If there were any way possible, GM could buy those properties to start out.

GM has enough lawyers and lobbyists to figure a way around it.

How is it that other industries (consumer electronics comes to mind) are able to do this?

They can only sell at MSRP. (I believe due anti-trust laws)

However, the "dealer price" for something like an iPod is only a few bucks less than the MSRP. The retailers make nearly zero profit on an iPod, but have huge markups on the accessories like headphones and stuff.

The problem is ... how many people want to buy a GM or Ford strictly at MSRP?

They can only sell at MSRP. (I believe due anti-trust laws)

However, the "dealer price" for something like an iPod is only a few bucks less than the MSRP. The retailers make nearly zero profit on an iPod, but have huge markups on the accessories like headphones and stuff.

The problem is ... how many people want to buy a GM or Ford strictly at MSRP?
What does the M stand for in MSRP? What happens if the M changes the MSRP? :D

What kind of positive press would GM get for universally lowering MSRP on all vehicles?

I think it'd either have to be all this model, or none because otherwise people are going to go test drive at a dealership and then order online to save money... unless the online price and dealer price are no different but in that case who would ever order online? Nobody wants to buy a car without first driving it and nobody is going to go to the website and order their car after the dealer just gave them a test drive unless the pricing is better online.

You don't haggle with Dell when you buy a computer online from them.


You dont go to Slickdeals much do you... :)

The thing is, overall dealerships are a strength for a carmaker.

- Dealerships do a lot of advertising
- Dealerships invest in real estate locations, buildings and so on
- Dealerships are willing to take a hit on profits to move a car
- Dealerships hold inventory (Smooths out production and carmakers make money on this)

Now certainly there's some crap "stealerships" out there, but I think a lot of the complaints here are coming from the people who want the new hot GTO or Camaro and not those who got a great deal on a SUV which has been rotting on the lot for a year.