NADA “Get The Facts” Takes Aim At Tesla – Video – Infographic

JUN 23 2014 BY ERIC LOVEDAY 38

Amidst the heated Tesla versus the National Automobile Dealers Association battle, NADA has “rolled out a new “Get The Facts” initiative to inform the media, opinion leaders and consumers about the numerous benefits of America’s franchised new-car dealer network.

Only problem is that the “facts” aren’t necessarily facts, but more like opinions.

NADA President Peter Welch states:

“Franchised new-car dealers provide the best, most efficient and most cost-effective way to sell and distribute new cars in America, and we’re proud of our businesses and business model.”

That’s an opinion, for sure.

Welch adds:

“NADA’s efforts will set the record straight about the benefits of the dealer franchise network for consumers, manufacturers and local communities everywhere.  New-car dealers provide the best and most efficient way to buy and sell cars for both consumers and manufacturers, despite the misinformation and misconceptions that have surfaced over the last several months.”

More opinion there.

Welch continues:

“Franchised new-car dealers benefit consumers through price competition, accountability on warranty and safety recall issues, and provide enormous economic benefits to local communities across the country.  The dealer franchise network is supported by automakers as the best and most efficient way to buy, sell and service cars in the marketplace.”

And even more opinion.

NADA doesn’t mention Tesla in its material, but the connection is obvious.

The “Get The Facts” initiative highlights four central benefits of franchised auto dealers, which include:

1. Price Competition – New-car dealers compete fiercely for business and drive consumer prices down;
2. Consumer Safety – New-car dealers take the side of consumers in warranty and safety recall situations;
3. Local Economic Benefits – New-car dealers create well-paying local jobs and generate significant tax revenue that have a huge impact on local economies; and
4. Added Value – New-car dealers simplify an otherwise complex car-buying experience.

Check out the NADA “Get The Facts” video above, as well as the infographic, a snippet of the consumer benefits of franchised dealers, a full press release and a link to NADA’s “Get The Facts” website below.

Now that you’ve gotten “the facts,” what’s your take or preference?  Franchised dealerships or Tesla direct sales?

NADA "Get The Facts"

NADA “Get The Facts”

Some "Facts" From NADA

Some “Facts” From NADA

Full NADA press release on “Get The Facts” –

NADA Launches Major New Initiative to Promote the Benefits of Franchised Auto Dealers

NADA rolls out new animated videos, website and other resources to promote the consumer and manufacturer benefits of new-car dealerships

McLEAN, Va. (June 16, 2014) – The National Automobile Dealers Association has rolled out a new “Get The Facts” initiative to inform the media, opinion leaders and consumers about the numerous benefits of America’s franchised new-car dealer network through a website and variety of multimedia resources available at www.nada.org/GetTheFacts.

The centerpiece of the project is a two and a half minute animated video detailing the benefits of the franchised dealer system, viewable here. Other resources include a 30-second video, a fact sheet on the consumer benefits of dealers, a longer informative FAQ, a document explaining the reasons for state franchise laws, an infographic and other materials. On June 17, NADA will release a new report by renowned auto industry analyst Maryann Keller on the consumer benefits of the dealer franchise system.

“Franchised new-car dealers provide the best, most efficient and most cost-effective way to sell and distribute new cars in America, and we’re proud of our businesses and business model,” said NADA President Peter Welch.

“NADA’s efforts will set the record straight about the benefits of the dealer franchise network for consumers, manufacturers and local communities everywhere,” Welch added. “New-car dealers provide the best and most efficient way to buy and sell cars for both consumers and manufacturers, despite the misinformation and misconceptions that have surfaced over the last several months.”

NADA has presented the materials to state and metro dealer associations as well as individual dealers across the country, and is encouraging them to co-brand the materials and present them on their own websites.

“Franchised new-car dealers benefit consumers through price competition, accountability on warranty and safety recall issues, and provide enormous economic benefits to local communities across the country,” Welch said. “The dealer franchise network is supported by automakers as the best and most efficient way to buy, sell and service cars in the marketplace.”

The “Get The Facts” initiative highlights four central benefits of franchised auto dealers, which include:

1. Price Competition – New-car dealers compete fiercely for business and drive consumer prices down;
2. Consumer Safety – New-car dealers take the side of consumers in warranty and safety recall situations;
3. Local Economic Benefits – New-car dealers create well-paying local jobs and generate significant tax revenue that have a huge impact on local economies; and
4. Added Value – New-car dealers simplify an otherwise complex car-buying experience.

There are 17,700 new-car dealerships with nearly 32,000 domestic and international franchises that employ more than 1 million people in the U.S.

Source: NADA via Hybrid Cars

Categories: General, Tesla

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38 Comments on "NADA “Get The Facts” Takes Aim At Tesla – Video – Infographic"

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Boris

So based on this video, the dealers have really nothing to worry about, they should boldly support Tesla in opening its own stores as Tesla will come in begging to do business with them…

kalle

+1

Surya

That was my takeaway as well

QCO
Looking at the NADA story as a whole, it really does look weak and shows they are on the wrong side of history. I can’t think of many people who say “I love my dealer, they’re so good to me”. Decades of abusive practices have left a bad impression on just about everyone. Looking at their 4 “get the facts” comments: 1) Price Competition – First, they’re adding a profit layer, then claiming benefit by competing with others adding a profit layer, which becomes an invented benefit. Eliminate the layer altogether. Secondly, they are masters at jacking up prices after the initial number by adding unwanted mandatory extras, fees and services. It’s like saying low efficiency shops are better than Amazon because they compete on their high overheads, which Amazon doesn’t even have. 2) Dealers never take your side on safety, it’s an earning opportunity. Often they are the first to say “it’s not covered by the recall, you’ll have to pay”. Sometimes consumers have to demand a manufacturers district rep to help solve a problem. 3) Local economic benefits accrue by default when you are soaking that much money from consumers. Quite often dealers are the local fat cats,… Read more »

@QCO,

Agree with everything except the Amazon analogy.

Unlike Tesla, Amazon is not the maker. They are just another form of a middleman.

It’s just that in the equation of “whom to screw”, the Amazon middleman – unlike local shops – screws the customer a little bit less in the short term, in exchange for screwing their warehouse employees and robbing local-government tax revenue (which is actually like screwing the customer, but in the elusive long-term).

Re: #1 Price Competition:
Auto dealerships are not like independent merchants selling on Amazon. If that were the case, then a consumer coud only order through a merchant listed with the Amazon association for your state.

With auto dealerships there are two levels of middle-men; the “dealership” that a vehicle is physically located and the “state-wide dealer association” that all dealerships are members if they have a contract with an automotive manufacture to sell current model-year vehicles.

In one word:

HAHAHAHAHAHAHAHA !!!

Tesla has brilliantly chosen to take on two of the most hated types of business by ordinary people: auto dealerships and oil companies.

Its foes will find little sympathy in the wide public, no matter how many millions they throw on spin campaigns.

SeattleTeslaGuy
The last point is absolutely their biggest bold faced lie. Prior to buying the Tesla, I spent on average about 3 hours at the dealership buying my other cars in a high pressure situation with the traditional salesman and manager tag team. A certain Ford dealer squeezed me so hard I decided never to buy another Ford again. I spent about 20 minutes at a PC actually selecting the Tesla. The paperwork used an e-signature so I did it all at home as well. Note that I have always paid cash for my cars (well, since 1990 anyway) so the whole loan issues didn’t come up but that would have made the dealer experience dramatically worse, not better. The most important point was I had no salesman pushing features I didn’t need. I bought exactly the options I wanted. If I had questions, the internet and Tesla Forum was there helping me figure it out. For example, I wasn’t sure if I wanted 21″ or 19″ wheels. After doing my research, I determined that the cheaper option (19″) was right for me. I am certain a sales guy would be pushing for what ever they had on the lot. Tesla,… Read more »
Nix

SeattleTeslaGuy – If your Model S were sold through dealerships, they would have slapped on a $20,000 dollar “Market Adjustment” on top of MSRP. Just like early Chevy dealerships did to the Volt. They do that with any car that has limited production and high demand.

You got a heck of a good deal compared to what you would have gotten hit with had there been a dealership involved. It isn’t like you could negotiate down the price because they had way too many Tesla’s on their lot, and they needed to clear out some inventory, like it was a Ford.

SeattleTeslaGuy

I agree that scenario could have happened. But I don’t think I got a screamingly good deal. Yeah, Tesla raised some prices after I bought but still think it was just a fair price.

Funny, when I bough my Prius in 2008, the bottom of the car market had fallen out yet the dealer still had “Market Adjustment” price (2500, iirc). I looked at the salesman and said – here is what I’m willing to pay (invoice price) and I have cash in hand. The MA went away. Still it took over 3 hrs of dicking around and multiple attempts to get me to sign up for all sorts of things. They claimed they had put “under body protection” on the car – I said find me a car that doesn’t have it. That item dropped off the bill (a quick check later showed that it was never there). It was fun playing tough guy but still took forever.

KenZ

The video sounds compelling. Unfortunately, it just isn’t true. Our recent experience leasing our Volt was unpleasant to say the least. Then the first service was a service disaster, not in what they did (and didn’t) do to the car, but how they completely mismanaged it three times, making us do the extra trips for their mistakes. Wife was pretty angry.

Automotive dealers are in the same category as health insurance companies, life insurance companies,and title insurance for us. They extract as much money for as little service as they can get away with. Don’t get me wrong, I’m all about capitalism, but I want the ability to opt out. @Boris above notes this well.

Nix

Title Insurance is the worst. You pay a title insurance broker $2,000 for title insurance on a house.

The Title Insurance Broker buys you a $500 dollar policy from one Big 3 insurers (Fidelity National Financial, First American, or Old Republic) who actually provide the insurance policy.

The Title Insurance Broker pockets $500 bucks themselves.

The Title Insurance Broker then gives $1,000 dollars to the “Affiliate” (AKA your Closing Company who handles your closing). They call it an “Affiliated Business Arrangement”, but it is really just a kick-back.

Meanwhile, the actual insurance only pays back less than 10% of the policy dollars they collect in actual claims. The rest is pocketed as overhead and profits. One of the worst deals in insurance you can get.

The whole thing is a sham. Title insurance should be a fraction of what it costs.

Mikael

This makes me glad once again to live in a “socialistic” country (which also is more of a free market since direct sales aren’t and never would be banned) ‘cos I don’t need to have an health insurance at all and don’t even know what a title insurance is.
Last time I went to the dentist they almost payed me when I was done.
Dealers are much more friendly and honest here too, but it’s still one of the most annyoing things to spend time there.

Scott Franco

Its is good example of the economic principle that each party deals for its own good.

So based on the logic in the video, why not ban factory direct stores for everything? Clothing, furniture, etc. In fact we could move to a model where nobody can sell anything without a local partner. Outlaw amazon. Shut down the internet, since most transactions there bypass dealers of any kind, etc.

ffbj

Bottom Line: Cars cost more through dealerships.
That is an indisputable fact no matter how much lipstick you try to put on that pig.
Type in: “Ways auto dealers rip you off” and hit search. If auto dealers were such good guys, as portrayed in this cartoon, then why do you get hundreds of thousands of hits on how they cheat people? Auto dealers get a bad rap, but everyone knows, or should know, that it is well deserved.

FFY

Well, in fact we don’t know that they cost more, since there is no significant car company that uses both direct and dealership sales, or is there?

BTW, does Tesla allow dealers to resell their cars? Why not offer both and let the market decide?

Regarding service and maintenance, I think a main concern is if the Tesla model scales. They offer fantastic direct service now, but will they be able to keep doing this with their existing logistics once they sell ten times as many cars as they do now?

realdb2

It should be up to the consumers and manufacturer to determine whether or not the dealer channel adds enough value to be worthwhile.

Tell me again why some governments mandate it for this industry?

qwerty

“simplify an otherwise complex car-buying experience”

So why does it take 3-4 hours to buy a damn car??????
Even when you have cash on hand!

Yup, when we leased our Leaf we came in with a pre-conceived decision after negotiating the price via phone. Ok, took a test drive, that was nice as well as the guy who went with us. But then the paperwork to sign the lease… oh my Goodness!… It never ended… and we have clean credit and were putting down a relatively sizable down payment too. They dragged it out over 3 hours and towards the end tried to sell me various add-ons and riders, some of them completely redundant… I did end up signing to pre-pay the service visits for $30/month mostly just to vent out some of the pressure they put on me. And that’s with a customer who’s already 100% willing to buy the damn thing. My wife ended up leaving before me to pick up the kids from our friends before it becomes late night. And don’t get me started on the time I came in for a periodic service to our 2001 Santa Fe, got dinged with a >$3k bill for all kinds of stuff they “found” and was absolutely “criminal” not to do, and – under the disorientation of that immense sticker shock on a… Read more »
Thomas j. Thias

Sorry Assaf, You said, ” I did end up signing to pre-pay the service visits for $30/month~.” A Nissan LEAF EV, right?

What service costs that much besides rotating tires every 7,500 miles?

Thanks for our reply in advance.

Best-

Thomas J. Thias

Twitter.com/AmazingChevVolt

Andrei

I am from Europe and I can see only the propaganda behind this…

Jesse Gurr

Oh that is great that the Fisker dealers are still around to service all those cars they sold. Oh, wait.

MDEV

They refuse to service Fisker Karma even with the owner paying for services.

GoBlue88

Yeah, citing Fisker in the video probably wasn’t one of the better examples they could have used.

Jesse Gurr

Well they didn’t say Fisker. They just said that if a manufacturer goes out of business, the dealers will still be there to support the customer. That obviously wasn’t the case with Fisker, whose dealers closed up shop not long after Fisker did.

GoBlue88

Actually, they did. Right at about 1:29 in the video: “even if manufacturers stop doing business like Saab, Suzuki, or Fisker…”

Thomas j. Thias

Actually folks, Fisker is coming back imho.

Here is a direct quote from the foumder of Wanxiang

05-18-2014

I’ll point out, that this statement was the most stunning I have seen coming from the Global Automotive Industry in a long time, topped only by Tesla Motors CEO Elon Musk a week ago.

“I’ll put every cent that Wanxiang earns into making Electric vehicles,” he said.

“I’ll burn as much cash as It Takes To succeed, or until Wanxiang Goes Bust.”
Wanxiang – Lu Guanqiu, Chairman And Founder

This guy sounds serious!

And now, the new website.

Link Goes To The New Fisker Website-

http://thenewfisker.com/

Best-

Thomas J. Thias

Twitter.com/AmazingChevVolt

Jesse Gurr

The fact they are coming back is besides the point. What if Fisker didn’t get any buyers? Would they still come back? Doubt it. If they go bankrupt again do you think the dealers will still be around to service the car? Highly doubt that since that didn’t happen the first time.

MDEV

NADA for congress AMAZING!!!

Nix
1. Price Competition – This works both ways. When a car like the Tesla Model S is in high demand and supplies are limited, dealerships slap on outrageous “Market Adjustments” that add thousands or even tens of thousands to the prices consumers pay. GM dealers did this with early Volts. 2. Consumer Safety – New-car dealers take the side of THE DEALERSHIP in warranty and safety recall situations. If the Service Dept. can make money on what the factory is offering to dealers, then they will aggressively go after doing safety recalls and warranty work. If they are backed up in the Service Dept. with other work that is more profitable, or if the factory isn’t paying enough for the warranty/recall work, then they will avoid doing that work. You don’t matter, what makes the Service Dept. money is what matters. 3. Local Economic Benefits – New-car dealers create well-paying local jobs, but Tesla also hires local people to sell and service cars. That’s a wash. As for keeping the money local, that is quickly becoming a thing of the past too. Huge national Dealership Franchises like Penske, AutoNation, Group 1, CarMax, etc are quickly taking over the mom-and-pop dealerships.… Read more »
Mark C

I waxs so angry at Bill Heard Chevrolet after we spent 6 hours buying a pickup truck, I decided to NEVER go back. More than 2 hours was spent waiting for the business office to go to dinner and come back. When I had a warranty issue, after spending nearly an hour on the telephone, I got permission from the Zone Office to get it repaired at a GMC dealer somewhat close to me. The zone office kept sayiing “We want to make you happy,” and I kept saying Bill Heard Chevrolet will go out of business before I go back on that lot.” I couldn’t have been more pleased when Bill Heard went under.

As long as I have a place to see and drive the car before I buy it, I’d prefer to do the purchase and paperwork over the internet, or from someone who is not paid a commision to sell me the vehicle.

Spec9

If they are so efficient then how do the have the extra money to put together this advertising campaign and lobbying? Seems like they are just protecting their profits.

Anon

Sit and spin NADA, sit and spin…

Oh Peter Welch. Where would the American consumer be with out the auto dealership (to gouge them? PARASITIC MIDDLEMEN

Jeff D

Benefits you get from a dealership that you don’t get buying direct – zip, zero, zilch, NADA.

Thomas j. Thias
NO BUT THERE’S A FREIGHT TRAIN COMING! GLOBAL OEMs! “[…] State Franchise Laws, Sparked By Tesla, Go Too Far, Other Automakers Charge[…]” Via – Automotive News / http://www.autonews.com/ “[…] Amy Wilson Automotive News June 16, 2014 – 12:01 am ET It started as dealers vs. Tesla. Now that fight has ignited a confrontation between dealers and other automakers. Dealers’ opposition to Tesla Motors’ model of factory-owned stores has led state after state to propose laws defending franchised dealers. Automakers charge that the legal balance in the dealer-automaker relationship, already affected by other dealer-backed legislation, now is shifting too far in favor of dealers. “At the request of local dealer groups, states set up a labyrinth of protectionist laws that make the car-buying experience difficult and costly for our customers,” said Gloria Bergquist, a spokeswoman for the Alliance of Automobile Manufacturers(1), which represents 12 automakers but not Tesla. “It’s understandable why Tesla or future competitors would want a simpler sales process. When we look at the big picture, we may be at a tipping point. If dealer groups continue their push for more onerous franchise laws, we will be forced to keep an open mind about how best to serve new-car… Read more »
Brandon

ROFL

If Tesla is no threat then why are they even replying

scurrrrrrred sharks

Breezy

Someone uploaded this video to YouTube. It’s, uh, getting a bit of a rough ride there….:)