Why AutoNation CEO Jackson calls dealer fight with Tesla hypocritical
The efforts by various auto dealer associations across the U.S. to keep Tesla Motors from selling its expensive electric cars directly to the public is hypocritical and makes dealers look bad, said Mike Jackson, chief executive of AutoNation, the biggest operator of car showrooms in the U.S.
“You have dealers, entrepreneurial, free-enterprise guys, arguing for government protection,” Jackson said while visiting the Los Angeles Auto Show on Wednesday. “I don’t get it.”
Tesla sells cars to the public through Apple Store-like “galleries” often located in high-traffic shopping areas.
Elon Musk, the electric car company’s CEO, says its vehicles are so different from conventional gasoline-engine vehicles that they require significantly more customer education and a more detailed, hand’s-on approach than is seen at a typical car dealer.
Musk also has said that car dealers, who sell electric cars by the handful while pushing gasoline cars by the millions, don’t have much interest or economic state in pushing electric technology.
At the urging of dealers, Michigan last month enacted a law that forces car manufacturers to sell their vehicles through franchised dealerships. Texas has a similar law. Tesla continues to battle for the right to sell its cars directly to the public in other states, including Massachusetts, New Jersey and Georgia.
Tesla’s direct-to-customer sales in the U.S. are almost immeasurable — just 15,500 cars while dealers have sold 13.7-million cars so far this year.
Nonetheless, the National Auto Dealers Assn. has launched a major marketing campaign to shore up its turf. It defends dealers as an important source for price competition for consumers and also as valuable economic and community pillars.
Jackson called the reaction some dealers have had to Tesla as “militant.”
“If Tesla wants to distribute its products directly to consumers it is their business,” he said. “It is a mistake to fight this.”
Jackson said it would be different if there were existing auto dealers that had invested in building Tesla franchises and Tesla decided to start competing with them for sales of its own cars. But as a new automaker, Tesla doesn’t have any franchised dealers, so it is not endangering anyone else’s business, he said.
Headquartered in Fort Lauderdale, Fla., AutoNation is America’s largest automotive retailer. It has 275 car franchises.