'Pimp My Ride' Dealer Takes on Elon Musk

REPLAY VIDEO
Your next video will start in
Pause

Recommended Videos

  • Info

  • Comments

  • VIDEO TEXT

March 11 (Bloomberg) -- Galpin Auto's Beau Boeckmann and Bloomberg's Matt Miller discuss how U.S. dealers view direct Tesla sales. They speak with Pimm Fox on Bloomberg Television's "Taking Stock." (Source: Bloomberg)

Maybe you could describe the importance of this decision in new jersey.

It has to do with how you buy or sell an automobile.

I think it is another case of overregulation.

Tell us what happened.

Basically, you are not allowed to buy a car directly from a company in this country.

Tesla has been recently flouting those rules and going out and putting stores and showrooms into malls and other places where consumers walk around and look at things.

They are selling directly to consumers.

Why wouldn't they?

Ford and general motors and every large, major automaker in this country for years has not been able to do that.

Dealers need some way to keep their businesses viable.

They have politicians create regulation that forces you to deal with a middleman.

Weight.

Weight.

-- wait.

Wait.

Let's ring" -- bring in beau b oeckmann.

If i was elon musk and tesla, i would be tempted to go along with these name model.

You get a chance to control the process.

I think it would be a tempting model.

The laws are set up to protect existing businesses.

We have invested our life savings so that manufacturers cannot come in and put us out of business.

What you get by controlling the whole process is limiting competition.

Among dealerships, we compete to bring the lowest price to the consumer.

We operate on extremely thin margins.

Typically 1% or 2%. many dealerships lose money selling a new car to gain a service business.

When you do not have that sort of competition, the customers are going to pay more.

It would like -- it would be like saying, what if every four dealership can price fix?

That is bad for consumers.

Tesla is approaching the model in the same way.

The customer would not have to pay the delivery charge.

If the customer dealt directly with the manufacturer -- the delivery charge is a pass-through.

That is something that they have to pay anyway.

The vehicle has to be transported.

How many people will go to the factory?

I will get my truck built up for.

Can i buy it now and drive it home?

Not possible.

How long does it take them to ship my truck from detroit to new york?

Several manufacturers do allow you to pick up the carton factory.

It is possible.

Because of the way the current dealership model works, is it possible for there to be no regulations -- new regulations that would allow or tesla to go ahead and sell it directly.

That is an exception to the general rule.

I was in california.

Tesla sells directly to consumers.

We welcome the competition.

For us, it is more about manufacturing.

It is coming after the fact and trying to disrupt our business.

We have created an invested in it.

This is a brand-new car company.

We have not had the same hangups as in other states.

Can i just say, to everyone and to you, i have talked automakers all the time.

I cover card for bloomberg.

Big and established companies like toyota and ford, they love their dealership networks.

They want their dealership networks to arrive.

Without their dealership networks, they would not do the kind of business that they are able to do.

It is a different story with a company like tesla.

That is the case.

There may be a time when tesla wants to franchise.

Eventually, it could get to that model.

You talk about the complexity and handling thousands of customers that we handle on a monthly basis.

When you are servicing, renting cars, parts departments, it is a very complicated business that we are in.

We may reach the point where tesla says, look, i would rather have an entrepreneur take on the building a facility and service department.

We are not just talking about sales, we are talking about servicing the vehicle as well.

You need a physical facility and unique need people to work on the cars.

That part of the business cannot be done online.

Ford count on people to do the business for them.

They want people like beau to do it for them.

As an american, i should be able to decide whether i buy my company -- a car from a company that wants to sell it to me or a middleman.

What about the idea of you adopting a different selling model.

For example, tesla has set up stores in malls and nontraditional locations.

Is that an opportunity?

Sure.

They are doing nothing new.

Saturn had actually started doing that with one price model.

Now they work through dealerships.

The dealer themselves can set the price.

There was saturn dealerships that would open up in malls.

They were introducing the brand.

There may be opportunities in the future.

I think it is fascinating.

I would love to learn what tesla is doing.

If they have things that work, great, let's adopt the method dealership.

Would one of those involved installing a starbucks?

We have a restaurant at our dealership.

We have great food and our own in-house starbucks.

We tried to make it a fun shopping experience when people come here.

We don't want it to be antagonistic.

We have very high customer satisfaction.

People do enjoy buying cars if

This text has been automatically generated. It may not be 100% accurate.

Advertisement

BTV Channel Finder

Channel_finder_loader

ZIP is required for U.S. locations

Bloomberg Television in   change