Wednesday, May 22, 2013
Tesla, the electric vehicle company, has a PR headache. It seems car dealers are protesting Tesla's desire to sell directly to the public. Dealers are organized, and they have political power. How do I know this? Porsche tried to do the same in the mid-1980s and enraged its dealers who were instrumental in passing laws against the company and in suing it. Porsche quickly gave up its plans while my agency worked to overcome the PR damage the German sports car maker had caused. There is no reason why Tesla should be barred from selling directly other than the tradition of dealers coming between the manufacturer and its customers. That is the way the auto business started over a hundred years ago, and it is the way it continues. Should a company be allowed to shatter precedent? Yes, but it needs market power to do that and when even majors are scared to take on their dealers, one fears for Tesla's efforts. For all that, I wish the company well in handling the PR and legal fallout from its efforts. If it should succeed, it will show a way forward that other auto companies have been too timid to take.