The late Steve Jobs’ legacy lives on not only in making Apple a leading company in its sector but also in establishing a wholly new customer approach that has been widely acknowledged as a huge success.
It’s a practice that many companies try to emulate; automakers are not an exception, with GM having already said that its wants “to become the ‘Apple’ of the automotive industry”.
Tesla, though, is one-step ahead, eschewing the traditional auto dealership model in favor of stores within shopping malls. Elon Musk’s company has opened 17 factory-owned stores in 10 states and the District of Columbia, with another 6 to follow soon.
Surely it’s no coincidence that its vice president of sales, George Blakenship, is a former Apple executive who developed Apple’s retail stores.
Dealer associations in many states, though, are attacking Tesla over this practice, claiming that its factory own-stores violate franchise laws that don’t allow factory-owned dealerships.
They also claim that this strategy constitutes unfair competition for rivals, is not convenient for car servicing and has the potential to undo the whole franchise system; with the latter, presumably, being the biggest threat to the association.
“If a manufacturer sees that Tesla is successful with this kind of business model, who’s to say they don’t break out their own EV product lines and create a separate system that bypasses dealers?”, said the Massachusetts State Automobile Association executive vice president Bob O’Koniewski.
Tesla isn’t the only carmaker that’s emulating Apple’s strategy: the New York State Automobile Dealers Association fears that BMW will bypass its dealers and sell its new “i” sub-brand models directly to customers, despite the company having said that it will be sold through selected dealerships.
Stuart Rosenthal, general counsel for the Greater New York Automobile Dealers Association, had his 2010 lawsuit against Tesla’s Manhattan store dismissed on a technicality.
Nevertheless, Rosenthal and the association believe that Tesla’s three New York stores that are currently operational violate state law and are looking for ways to challenge their legality in court.
The National Automotive Dealers Association (NADA) says that 48 states prohibit or restrict factory-owned auto dealerships.
Blakenship commented on Tesla’s behalf: “We do what we’re capable of doing, and we do whatever they let us do. It’s unique for each location. If we can’t be a dealer in a mall, we won’t do reservations on-site. We tell people where to go on our web site to make a reservation.”
By Andrew Tsaousis
Story References: Automotive News
PHOTO GALLERY
VIDEO