When Art Linares wanted to buy a Tesla, it wasn’t as easy as walking into a store and taking a test drive. Instead, he had to go to New York — because in Connecticut, it’s illegal for a car manufacturer to sell directly to a customer.
“It prevents companies like Mercedes and BMW from creating their own stores, so they have to go through a dealership,” said Linares, who’s no ordinary customer — he’s a state senator for the 33rd District.
Linares wants to change those dealership laws for at least for one company, Tesla, which has a world-wide policy of selling directly to customers. “What we’re trying to do here in Connecticut is make an exemption for Tesla to be able to open up their own stores and sell their cars,” Linares said.
It’s an idea that’s getting resistance from traditional car dealerships. James Fleming is president of the Connecticut Automotive Retailers Association, which represents about 270 new car stores in the state. He said franchise laws exist, in part, to protect locally-owned “Mom and Pop” dealerships.
“There’s a disparity between manufacturers and small businesses, which are franchise dealerships,” Fleming said. “Initially, manufacturers, which are so large — there was no fair bargaining position between the two.”
Put another way, if a car manufacturer didn’t like how a small business was operating, they could just stop selling them cars.
Fleming said requiring car manufacturers to sell through a franchise dealership is in the best interest of consumers. He said dealerships often service multiple types of cars, so if a new company goes out of business, there’s still a support network for customers when their car breaks down.
“A good example would be when Saab went out of business, there were lots of Saab dealers who had other franchises besides Saab,” Fleming said, “They were here. They continued to take care of those customers.”
So why does Tesla want to sell directly to customers?
“It’s essentially a consumer issue,” said….
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