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Although Elon Musk, Tesla's chief executive, has said that he's open to playing within the confines of the dealership model once sales pick up, Diarmuid O'Connell, Tesla's vice president of business development, indicated that the company would likely seek a federal solution if state-by-state dealer association disputes took up too much of its resources.
The stark reality is that by 2025 the dealership model as it exists today does not exist.
On the manufacturer side, new players like Tesla have challenged the traditional retail dealership model with direct sales and no franchise stores.
The lawsuit follows the rejection of an application for a dealership license earlier this month, and lines up with Tesla's stated goal of pursuing the right to sell its vehicles directly to customers across the U.S. Vehicle sales in the U.S. still primarily depend on a franchise dealership model, wherein licensed third-parties handle the actual sales of cars from auto manufacturers.
The Silicon Valley entrepreneur also shed light on why he chose to pursue Tesla-owned stores, rather than the traditional franchise dealership model.
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The on-demand, sharing economy and direct to consumer model will continue to impact traditional franchise dealership models as consumers increasingly have other options to fulfill their need to get from one place to another cost effectively.
The time has come when the well-established dealership models get expired becoming inconsistent with the new realm of overall connectivity and intricate leasing rules.
Given how testy the traditional dealerships have been about Tesla's direct-from-the-manufacturer retail model of sales, a multi-maker non-dealership model is going to be a challenge here.
While Tesla is right in attempting to disrupt the antiquated dealership business model, BMW will be able to leverage its extensive dealer network to deliver to consumers worldwide, and consumers can use web services like TrueCar and Beepi to bypass the hassle of negotiating with dealers on the price of a new car and trade-in amount.
Many dealerships sell models from several companies.
The Gilmore Car Museum in Hickory Corners, Mich., is now recreating a vintage Ford dealership to display Model A's.
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