Car Dealers Are DONE! Colorado Just SHOCKED The Auto Industry | Episode 989
About this episode
Colorado's recent decision to allow Scout Motors, a startup funded by Volkswagen, to sell directly to consumers has sent shockwaves through the auto industry. This episode explores the implications of this ruling, highlighting the lack of federal mandates on vehicle sales and the historical context of dealership networks. The hosts discuss the potential loopholes created by state laws and the reactions from traditional dealerships, emphasizing the ongoing debate about the value of direct-to-consumer sales versus franchise dealerships. Additionally, the episode touches on Ford's record number of recalls this year.
franchise dealership networks
"They needed a franchise dealer network in order to exist and sell their cars."
These are the regular car dealerships that operate as independent businesses but sell cars from a specific brand.
Franchise dealership networks are dealer systems where independent owners operate under a brand’s name and guidelines.
franchise laws
"...each state developed their own franchise laws around that."
Each U.S. state has rules about how car companies can sell cars. These rules decide if a company must use regular dealerships or can sell straight to you.
Franchise laws are state regulations that govern how car manufacturers can operate dealerships and sell vehicles. They determine whether a manufacturer must use franchised dealers or can sell directly.
dealership model
"...car dealers have been incredibly profitable for decades, over a century in some cases."
Most cars you see are sold at a car dealership. The company makes the car and then gives it to a shop that sells it to customers.
The dealership model is the traditional system where car manufacturers produce vehicles and sell them through independently owned or franchised dealerships.
direct-to-consumer sales
"...outfit called Tesla came around and said, hey, you know what? We are not a typical car manufacturer...We want to be able to sell direct to consumer."
Some car makers sell cars through their own stores or online, skipping the regular car dealerships. This means they talk directly to you when you buy a car.
Direct-to-consumer sales refer to manufacturers selling vehicles straight to buyers without using traditional dealership intermediaries. This model allows companies like Tesla to control pricing, customer experience, and inventory directly.
Rivian
"...other manufacturers such as Rivian, Sony even has gotten something with their Afila, stuff like that."
Rivian makes electric trucks and SUVs and sells them straight to buyers, not through regular car dealerships.
Rivian is an American electric vehicle manufacturer that also sells its vehicles directly to consumers, following Tesla’s model.
Sony
"...other manufacturers such as Rivian, Sony even has gotten something with their Afila, stuff like that."
Sony, known for electronics and entertainment, is also looking into making electric cars.
Sony is a Japanese electronics company that announced plans to develop electric vehicles under the brand name Afila.
Lucid
"Lucid. Lucid can sell direct to consumer. Built in Arizona."
Lucid makes electric cars, like the Lucid Air. They sell their cars straight to buyers instead of through regular car dealerships.
Lucid Motors is an American electric vehicle manufacturer best known for the Lucid Air luxury sedan. Like Tesla, it sells directly to consumers without a traditional dealership network.
Audi
"Go down dealership road. You'll see a VW dealership and an Audi dealership."
Audi is a fancy car brand that makes cars with good technology and style.
Audi is a premium automotive brand owned by Volkswagen Group, known for its high-quality vehicles and advanced technology.
Loophole in state laws for EV sales
"We've now extended or we've now found a loophole, at least in the state of Colorado..."
A loophole is a missing rule that lets some companies sell cars directly to people even if the law usually says they must use dealerships.
A loophole is a gap or ambiguity in legislation that allows certain business practices, like direct EV sales, to operate legally despite broader restrictions.
Scout
"[513.4s] Because common sense would tell you that Scout is part of Volkswagen because, I don't know, the money for Scout came from Volkswagen. [524.6s] There is a deep knitted connection there that is hard to say doesn't exist."
The Scout is a new type of SUV that Volkswagen showed to give people an idea of what cars might look like in the future.
The Volkswagen Scout is a concept SUV that was announced by Volkswagen, showcasing future design and technology directions.
Virginia Automobile Dealers Association
"I get both sides and I'm not particularly fond of the side that the head of the Virginia Automobile Dealers Association took, but I understand why he took it because they're the ones that pay his salary."
This is a group that represents car dealers in Virginia and talks to the government about rules for selling cars.
An industry group representing franchised car dealers in Virginia, often involved in lobbying and setting local sales practices.
dealership services
"For sure, Deb, but also I want to be very clear here. We're talking about sales, but dealerships provide a ton of value in parts and service."
Dealerships not only sell cars but also fix them and give you spare parts when your car needs work.
Dealerships offer parts, maintenance, and repair services in addition to selling new vehicles.
Tesla
"You're in Connecticut and you're an automaker. You cannot sell direct-to-consumer. However, the Mohegan Tribe allows Tesla direct sales."
Tesla makes electric cars and sells them directly to people, skipping traditional car dealers.
An American electric vehicle manufacturer known for its high-performance cars and direct sales model.
Scout Motors
"Everyone knows Scout Motors is owned by the German automotive giant Volkswagen Group, which relaunched the iconic American brand as an independent U.S. subsidiary focused on electric trucks and SUVs."
Scout Motors is a new electric truck company that belongs to Volkswagen. They’re making trucks and SUVs that run on batteries.
Scout Motors is a U.S.-based subsidiary of Volkswagen Group that focuses on producing electric trucks and SUVs. It operates as an independent brand within the larger VW portfolio.
Volkswagen Group
"Everyone knows Scout Motors is owned by the German automotive giant Volkswagen Group, which relaunched the iconic American brand as an independent U.S. subsidiary focused on electric trucks and SUVs."
Volkswagen Group is a big German company that makes many car brands, like VW and Audi. They’re also getting into electric trucks in the U.S.
Volkswagen Group is a German automotive conglomerate that owns multiple brands, including Volkswagen Passenger Cars, Audi, Porsche, and others. It has recently expanded into the U.S. electric vehicle market through Scout Motors.
Porsche
"So yeah, there's this carve-out, even though there is a distinct connection between Scout Motors and Volkswagen Group and between Volkswagen, Audi, Porsche, whatever."
Porsche makes high-performance cars and is part of the Volkswagen family.
Porsche is a German sports car manufacturer and another brand owned by Volkswagen Group.
National Automobile Dealers Association (NADA)
"Now, Dad, one of the biggest parts of this story would be the National Automobile Dealers Association and their lobbying efforts..."
NADA is an organization that helps car dealers by talking to lawmakers and making rules easier for them.
NADA is a trade association representing automotive dealers in the United States, lobbying on their behalf.
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