This isn’t unique to cars. I remember once doing a local tradeshow and my boss wanted a “collapsing stainless steel magazine rack” to provide a place for us to put all our brochures, and that we could pack up for out-of-town shows. As it turned out, we put off getting the rack until the day before the show, and one of the largest manufacturers of exactly what we wanted was down the street from where I lived, so I called them up and told them I wanted to buy one.
Boy what a pain in the ass that was. They insisted I had to buy from a dealer in San Francisco, even though the factory was two miles from my house in San Diego. The San Francisco place wanted an outrageous amount for next day shipping and even then, they couldn’t get it to us by the next morning when our show started. I finally negotiated something with them where I would pay full retail and the cost of regular shipping through their website with an agreement I could just pick it up at the factory, but it took numerous approvals and signatures to make that happen on their end.
It used to be possible to buy a car from a dealer, and pick it up at the factory, saving the price of the shipping. Car carriers objected and they got it fixed that you still had to pay the shipping. Don’t know what the situation is now. By the way, how can dealers afford the large inventories? Dealer near me just added an acre to his parking lot, quarter mile of pickups in it. Don’t they have to pay interest on inventory?
Ferarri markets (or used to market) new top-of-the-line models directly to end-users. At least with the Enzo, buying was initially on-invitation, mainly to celebrities and top athletes. If you’re just the usual rich guy, it’s a long wait; made easier by the fact that you’re a proven Ferarri lover (already owns one or two earlier models.)
To elaborate on this (4 years on), Checker would only sell “civilian” versions of their cars to folks directly at the plant. You’d pick your car out of a catalog and they’d send you a bus ticket to Kalamazoo when it was done. The maintenance and parts issues were pretty much moot because most of the Checker mechanical bits were off-the-shelf GM parts that could be found and serviced anywhere.
Yes the dealers pay interest on their inventory. The term is flooring or floor plan. I guess it comes from how the cars on the sales floor are paid for.
As far as your local dealer goes if sales support it, having the right vehicle on the lot means a sale, not having it means a lost sale.
The could, but unless we’re talking a boutique item like a high demand luxury or sports car where people are coming to the seller cash in in hand the automobile sales process, to be concluded successfully, often takes a lot of personal attention, dealing with trade ins and financial qualifications etc.
In theory a manufacturer could do this, but it would require a huge infrastructure and the cost savings over using a a dealer would (IMO) be easily gobbled up by having to perform the same functions in a less efficient top down fashion. I spent a year selling cars at a dealership in 1987. There may be a few easy sales to high credit customers with no trade ins, but many other sales scenarios require the salesperson and the dealer to do backflips to get a person into a vehicle.
Plus car dealer salespeople and service retail workers are often paid substantially less than any unionized employee. Thinking that huge manufacturers can do the same thing as dealers re sales and distribution at less cost is a huge fantasy.
I think this is the key factor. Car sales require a system of dealerships to sell the product. If car manufacturers didn’t have an independent system of dealerships to sell their products, they’d have to invent such a system.
They could do it of course, but why bother? The car companies have a steady customer base - the dealers. It’s the dealers who have to deal with the hassles of selling the cars to the fickle public. Why would the manufacturers want those problems?
And the dealers are motivated to sell cars because that’s where their money comes from. If the car salesmen were company employees they would presumably be on salary and would have less incentive to move cars. Or the car manufacturer could run their sales centers on a commission basis but you’re reaching the point where you’ve got the same system you have now.
The car companies could try to have it both ways - sell cars to dealers and offer to sell cars directly to the public. But the dealers would go nuts if the manufacturers started competing against them like that. The dealers are going to insist on a no-compete clause when they buy their cars or they’ll buy from another company (which is probably what Yarster ran into when he was trying to buy that rack).
Boeing Commercial Aircraft sell their commercial aircraft directly to customers. In addition to the obvious Airliner sales, they also deliver a good deal of private aircraft directly to final customers as well (though this is more often than not involving a stop to a pre-delivery center where the interior can be fitted out, as these are not completed at the factory, except in the case of some passenger Airliners and most freighters).
Whether or not the customer picks up the aircraft in Seattle (there are delivery centers at KBFI & KPAE), or are delivered to the customer, or delivered directly into service is dependant on a number of factors and terms, but it is fairly common for customers to hire third parties (that both mnf & customer are typically very familiar with) to complete the actual deliveries. But there is no “middleman” dealer involved whatsoever; all prices and delivery slots, options, etc are negotiated directly between BCA and the customer.
I know late last year, I personally delivered a 737-BBJ2 (the personalized variant of the 737-800 series) from the Delivery Center at BFI directly to a personal residence in Southwestern Asia. So while there are all manner of options for all that, there is only one place to buy a Boeing.
Even better, one cannot purchase a used Boeing without BCA making a sort of “commission” (if one wishes to think of it cynically) of that as well.
According to Wiki since 1968 there have been about 7,283 737s built.
That is less than a weeks production for a very small car factory and probably about a days work for a big factory.
Hell my dealership will sell more cars cars than that in 18 months.
What I’m trying to say there a huge difference in scale here. To put it another way Volvo, a very small car company, introduced the 140 series the same year the 737 came out. They only built them for 6 years. Total production was 412,986. Easily two orders of magnitude greater than the 737 over the same period.
I don’t see why an assembly plant can’t have a basic dealership attached…an automotive factory outlet store.
The lot would have a random assortment of vehicles not ordered from customers at dealerships far away…savings from transportation and destination charges.