Musk 'Brilliant' with Tesla Sales Concept: Nardelli

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April 1 (Bloomberg) -- Former Chairman and CEO of Chrysler Robert Nardelli discusses the auto business and his outlook for Tesla on Bloomberg Television’s “In The Loop.” (Source: Bloomberg)

Out.

What do you think about what elon musk is trying to do?

Manna i think he is brilliant.

-- i think he is brilliant.

Brilliant in his approach.

A good friend of mine in arizona travel to california.

He puts his $40,000 down payment to hold a slot, goes back to arizona.

The car is delivered to him on a flatbed.

A technician spent an hour with him going through how to read it.

Fast forward a few months later, the technician calls and says, your 12 volt battery is malfunction -- is not functioning appropriately.

We will be there to change it.

Certainly, tesla market focus, caustomer centric.

It is almost like they have built a customer for life.

You can only dream of that with a gm car.

If you think about the business models we have, jack nasser tried this with ford.

Direct sales -- why?

In manufacturing, you are looking for volume to absorb your fixed overhead.

We all would love to have the margins that you get out of parts and service in used cars.

There was always that attention to the dealer network.

If you think about the dealers and their franchise agreements, state-by-state, they are -- they have tremendous legacy and are regarded in a state that is very tough.

Very powerful.

Dealers are approaching this appropriately.

Let's not have a massive right and lose -- a massive fight and lose everything, let's compromise and see what we can get done.

Ohio just excepted.

Limited.

I am going to build a battery plant somewhere, i will do it in a federal -- a friendly state.

There is a study out that shows state-by-state where he is approved relative to limited showrooms.

Some are within the nsa.

No one else is doing it.

He could have taken another approach.

He looked at the business model and said, i have all of these dealers, i do not have to re-create a service organization, i do not have to spend a lot of capital on tools and facilities and brick-and-mortar.

I will benefit my dealers because i will draw more traffic into my dealerships.

That was the business model he elected.

This only works for elon musk and tesla because they only sell less than 30,000 cars.

If you are trying to sell 300,000 cars, you cannot do that by yourself.

The question will be, if he grows the 300 taliban -- if he grows to 300,000 cars, ken is margin -- can his margin grow to the infrastructure?

Does he have enough margin in the auto to be able to cover those forward costs.

Did you want to sell directly to customers?

Is that something that automakers would like?

We all think about that.

If you look at what fiat did, i am so sure sergio would like to have a separate dealership.

A compromise was that the dealer had to spend xmas and of dollars to create a studio -- an x mill ions of dollars to create a studio.

I try to have a great working relationship with those dealers.

They are in place.

They have invested capital.

They have tremendous loyalty within the community.

Softball team, political relationship.

It is embedded.

On a personal front, most people do not like going to dealerships in mind cars.

For most people, it is a terrible experience and they feel like they're are being bilked out of lots of dollars.

Is there something more that should be done with regulating the dealers?

There have been many attempts.

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

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