Apple, of course, sells directly to consumers via Apple Stores. And while they don’t manufacture the chips that go into their computers, nor do the car companies manufacture all the bits and pieces that go into their cars (e.g., BMW’s transmissions made by ZF).
Correct me if I’m wrong, but even if you elect factory pickup, you still need to negotiate the sales contract at a dealership.
Apple may be the closest example of successful direct to customer sales because you can order directly from them or visit one of their stores. However, they still rely on retailers like Best Buy for much of their sales. CompUSA used to move a lot of Apple product before their demise. The Apple store network is hardly adequate to satisfy all of their potential customers.
Which is the point I made earlier. Each business unit needs to generate a profit on its own. If customers came to you instead of you going to the customer, then a middleman isn’t needed, but most customers still want to see and test drive cars and someone needs to do this.
Another problem is that when you try to sell to the end user in competition to the dealer, you will lose the loyalty of the dealer. We see manufacturers lose future business that way.
I suppose you could do it, but have fun shipping that bad boy back to the states on your own.
It doesn’t piss the dealers off, they love it. The car is sold thru the local dealer. Car is delivered in Europe. The local dealer makes money, and never has to inventory anything. Customers love it also.
I know the details of the Volvo program. Customer buys the car from the local dealer for European delivery. Price of the car is a bit less than window sticker. Price includes:
[ul]
[li]Two round trip tickets to Sweden[/li][li]One nights stay at the SAS hotel in Sweden[/li][li]A factory tour[/li][li]Personal delivery of your car at the factory[/li][li]Temp plates on the car for driving in Europe[/li][li]Insurance on the car while driving in Europe[/li][li]Shipment of the car back to the local dealer.[/li][/ul]
About 20 years ago Porsche tried to get rid of their dealers in the US. Got their ass handed to them in court.
I don’t think so as the dealers were most unhappy about the arrangement.
Warranty claims and servicing could be a problem too, in some cases.
There was some provision made for this but I don’t know how it played out.
I work in the electronic compenent distribution world, and a lot of the reasons that our suppliers don’t want to deal with direct would also apply here.
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Sales staff - If the supplier sells parts to a distibutor/car dealer, they don’t have to have a huge sales staff. If they sell direct, suddenly they are hiring salespeople.
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Knowing the local market - Going through a dealer/distributor means the supplier doesn’t have to know the local situation. Another dealer is having A BLOW OUT SALE!!? The supplier doesn’t have to keep track of that. Let the dealer deal with it.
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Inventory - It takes both money and space to store all that inventory. Let someone else handle that
4)Post sales service - The side mirror on your new car is loose? The spare tire is missing? The factories don’t want to deal with that.
And one issue specific to cars - Trade ins. Do you think that GM is going to want to pay you for your 1980 Honda?
On the flip side, how many buyers are going to be willing to order a car on-line or over the phone, no test drive, and probably arrange their own financing. Then fly to Detroit, pick it up and drive home. Then find a buyer for their old car. How much money would you have to save, to make all that worth while?
Isn’t Dell a manufacturer that strictly sells its own goods? Or are the in non-Dell retail shops now?
Dells are available at other stores (BestBuy,Futureshop, etc.)
Do you know any of the details of that, or have a case name to Google?
ETA:
I assume it was some sort of restraint-of-trade ruling.
IIRC there were two manufacturers that would sell direct to the public: The Checker Marathon
http://www2.uol.com.br/bestcars/carros/classicos/checker-cab-2.jpg
and the Hummer H1
Prior to General Motors Securing the Marketing Rights to Hummer (and after Arnold Schwarzenegger being the first private citizen to own one) the plant would hand over the keys to anyone who showed up at the end of the assembly line with money in hand (no dealer network yet).
Dell never had retail shops, as far as I know - and it was only recently that they starting selling them in ordinary retail outlets.
However, Dell does not do much more than assemble components made by other companies, so they’re not a great example.
To everyone talking about how you can order European cars directly from the manufacturer: you can’t. You can go to Europe and pick them up right off the factory floor - but you still visit your local dealer to place the order, pick the colors, choose options, etc. And when you’re done doing 150 mph runs on the Autobahn, your car is put on a boat and shipped to the US, where you pick it up - at your local dealer.
Disclaimer: My husband is a car salesman.
I think it’s because the factory is not willing, nor is able to put up with the end customer BS involved with purchasing a vehicle. Some folks may be OK with placing an order sight unseen and buy something that costs more than their first house, but most people want to see the actual model so they can kick the tires and take a test drive.
I suspect that’s a lot of it.
On the other hand, you may be able to cut a better deal when the dealership is trying to unload a particular model that is on the lot and you don’t care what color it is.
I got my last car by contacting the fleet rep for the dealer. Told him what I want, signed the papers and drove it home.
Yep.
I sold cars for about a year when i was younger, and if you bought something we already had in stock, your bargaining position was generally much greater than if you wanted something special ordered, or if you wanted to wait for a car with particular features.
It costs money to keep inventory hanging around, and dealers need to make room for the new stuff, so we were always quicker to offer good deals if you wanted to drive away in something we already had in the lot.
Isn’t Saturn sort of sold directly? 
Psst, see post #26.
mhendo No I don’t have a case name or exact date. It was the mid to late 1980s IIRC correctly, and I recall reading about it in both the buff books, and Automotive News. Again IIRC Porsche announced that they were going to buy out all of their dealers, and open factory stores. Lawsuits were filed, penis did not ensue. Porsche lost.
The automobile dealership has become an enormous monster in the United States.
Thank Henry Ford.
The assembly line produced a lot of product, which was a lot of money out the door. Individual sales just could not keep up with the amount of production cost.
Ford used the franchise dealership model to shift the risk of sales and a lot of the cost of production to these other business people. The original agreements from Ford required the dealerships, in return for their brand and regional monopoly, to pay for the cars upfront (not when they were sold).
This gave huge relief from Ford’s production costs by shifting the unsold inventory to the dealers. The factory sold to the dealers, and the dealers were left with the ris of disposing of the inventory. Ford’s cash flow improved greatly. Ford’s competition adopted the same method.
This method has since evolved dramatically, and it’s proponents have justified it in all sorts of ways. Early on, it was justified by “competition” since Ford nearly the only manufactuer. Competing Ford dealerships would keep the price low, right? Wrong. Ford set the price. Within a decade, Ford had plenty of competition from Chevrolet. But then came the Great Depression, where, again, the monopoly of the dealership was justified to help keep the manufactuers in business. This refrain repeats over the decades.
Today the competition arguments hold even less water as there are plenty of different manufacturers. There is an argument that dealerships provide service; but, that doesn’t hold too much water either when you consider how many independent mechanics there are.
So why are we still stuck with dealerships? Because selling cars can produce big profits and the the people who make that profit fund political campaigns that create restrictive State laws to protect their interest.
I assume this thread is being revived due to articles like the following: How Tesla plans to short circuit new-car dealers.