Ford and GM Need Business Model Innovation--Look to India's Nano.

Congress just loaned $17.4 billion to Ford, General Motors and Chrysler, but it didn’t do what it should have done—seriously mandate major changes in the distribution system of the US carmakers. Thanks to heavy lobbying, some 40 states have laws prohibiting consumers from buying directly from Ford, GM and all other car-makers. These auto franchise laws force consumers to go through car dealers. This is an unnecessarily expensive way of doing business in an age of web connection. It protects a distribution system that has a great deal of local power, but makes less and less economic sense.

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