It started as dealers vs. Tesla. Now that fight has ignited a confrontation between dealers and other automakers.
Dealers' opposition to Tesla Motors' model of factory-owned stores has led state after state to propose laws defending franchised dealers. Automakers charge that the legal balance in the dealer-automaker relationship, already affected by other dealer-backed legislation, now is shifting too far in favor of dealers.
"At the request of local dealer groups, states set up a labyrinth of protectionist laws that make the car-buying experience difficult and costly for our customers," said Gloria Bergquist, a spokeswoman for the Alliance of Automobile Manufacturers, which represents 12 automakers but not Tesla.
"It's understandable why Tesla or future competitors would want a simpler sales process. When we look at the big picture, we may be at a tipping point. If dealer groups continue their push for more onerous franchise laws, we will be forced to keep an open mind about how best to serve new-car buyers in the future."
Hold on, say dealer advocates. "This is all about the manufacturers and what they want, and their sense is they are losing control over the dealer," said Jim Appleton, president of the New Jersey Coalition of Automotive Retailers. "What they call the tipping point is what we see as approaching a level playing field."
Dealers say automakers are the 800-pound gorillas in the relationship and that state laws had to be strengthened to protect retailers from factory bullying and to preserve the franchise system.
Appleton, who also is chairman of the Automotive Trade Association Executives, representing 115 state and metro dealer associations in the United States and Canada, said the alliance is suggesting the franchise system is a "lodestone around the neck of innovation or the manufacturers' ability to succeed in the marketplace.
"That message will send a chill down the spine of 19,000 business owners who have invested in a business based upon representations and commitments from the manufacturers, which the alliance is now signaling are contingent on whether they get their way in a particular statehouse or not," Appleton said. "This is a recipe for disaster, for a deterioration in the relationships between dealers and manufacturers."
A proposed bill in Pennsylvania turned up the heat in the simmering dispute.
That bill, which is supported by that state's dealer association, would allow electric-vehicle maker Tesla to operate factory-owned stores in the state without limits on store numbers or sales volume. It is worded so as to apply only to Tesla.
The Alliance of Automobile Manufacturers opposes the bill, saying it would give Tesla an unfair advantage over automakers such as General Motors, Volkswagen and Toyota.