To the Editor:
Regarding Elon Musk's struggles with the retail franchise system, it's my belief that most dealers are not concerned about Tesla as a competitor. That's no reflection on the company or its products, which appear to be brilliantly executed.
Dealers' fears lie in allowing any manufacturer to open factory-owned stores in their backyards, where the dealers have made massive real estate and facility investments. There is a rationale for that fear, but I doubt that established manufacturers would bother after Ford's failed experiment in owning dealerships.
There is solid logic in having Tesla's growth channeled through a retail system that can expand quickly and give the consumer a first-rate shopping and ownership experience. To get that, it would give up little. My guess would be on the order of 6 to 8 percent retail margin with a territory system like Saturn's featuring fixed pricing and superb customer handling as backbones of its DNA.
In exchange, Tesla doesn't have to build stores, with the attendant retail overhead. If the retail system were structured properly, the best and brightest dealers would flock to build stores to elevate and grow the brand. Tesla should write a strict dealer agreement.
Musk would be surprised how easy that would be for dealers to accept, provided they see territories and culture that don't allow for cannibalizing.
Think what Saturn might have been had it had a compelling product.
Willoughby Hills, Ohio