The fledgling Lynk & CO brand plans to enter the U.S. and Europe in 2018 with a distribution system that skips franchised dealers except, perhaps, for vehicle service.
It's one of several unconventional steps proposed by Lynk, a brand of China's Geely Automobile whose first U.S. vehicle is to be a compact crossover developed with Volvo Car Corp. But bypassing the franchise system may be toughest obstacle to overcome. It's certainly an avoidable one.
Lynk's plan is to use new platforms, new powertrains, new factories, unprecedented connectivity and its innovative, but untried, sales and servicing concepts.
Challenges to the franchised-dealer distribution system have occurred regularly over the years. Tesla's company-owned stores are just the latest. And even after years of legal challenges and state-by-state lobbying, Tesla's effort is far from complete. In several states, the EV-maker has benefited from compromises meant to slam the door after Tesla got in, making it harder for the next company to try factory-owned stores.
Lynk executives apparently aim to avoid repeating the litigation and regulatory battles Tesla has experienced. They say existing Volvo dealers could perform service for vehicle owners, which might make the plan more palatable to the dealers. But they say they could also outsource service to independent third parties.
A Lynk executive has said "the current car distribution model is broken."
We don't believe it is, though every automaker has the right, indeed the obligation, to explore new methods of operation in every part of the business.
Other brands that have successfully launched in the U.S. in recent decades -- notably, Lexus, Infiniti, Acura, Hyundai and Kia -- took pains to recruit the best dealers they could find.
But Lynk risks alienating dealers in the world's most-developed and most profitable auto market. And unlike other startups that entered high-margin luxury segments or specialty niches, Lynk is targeting the highly competitive middle market with an unknown China-built brand. It would be easier with a solid franchise dealership network.