Hardly a week goes by without some development related to Musk’s car company, Tesla Motors. And that’s two years after the first deliveries of Tesla’s revolutionary electric vehicle, the Model S.
The founder and CEO of Tesla, Musk “is exerting an inordinate influence over the auto industry,” according to Automotive News. His cars have altered the perception of electric vehicles, and sales success in the premium segment is “reshaping the conversation about the customer experience.”
“But he is creating the biggest waves in the area of factory-dealer relations,” reported Automotive News a few days ago in a story headlined, “Musk makes auto industry rethink basic assumptions.”
AutoTrader suggested simply, “Tesla is turning the car sales model on its head.”
In state after state, said the Automotive News article, Tesla’s attempt to sell cars from its factory-owned stores and online directly to consumers has generated debate over the merits of the dealer franchise system and the laws that protect dealers from automakers.
Two recent examples are Tesla’s victory in New York State that allows it to continue selling from its five stores there, and the turning tide in New Jersey, where Tesla wants to open stores.
But dealerships also are coming to understand the new sales environment in which customer experience and service are at or near the top of vehicle purchaser’s priorities when choosing where to buy.
The National Automobile Dealers Association (NADA) approached the discussion head on with results of a recent study suggesting several benefits franchised auto dealers deliver:
Fiercely competing for shoppers’ business and drive consumer prices down.
Taking the side of consumers in warranty and safety recalls.
Creating good-paying local jobs and significant tax revenue for communities in which they’re located.
Simplifying the complex car-buying experience for shoppers.
Of course, Santander Consumer USA and our brands Santander Auto Finance and RoadLoans have an interest in any significant development in the vehicle sales arena, because the ripples could affect our business with around 14,000 auto dealerships nationwide.
But the main lesson from Tesla’s activities is that the automotive industry – any industry, really – cannot afford to stand still in a rapidly evolving marketplace.
And, right or wrong, thinking such as Musk’s is notable for pushing the envelope.