There is a trend of selling cars through franchised dealerships in automakers industry but Tesla Motors Inc (NASDAQ:TSLA) sells the Model S directly to consumers through its own stores. That’s way Tesla is facing the wrath of dealers, who have succeeded in obstructing Tesla from selling directly to consumers in Texas and North Carolina.
On Thursday, Tesla Motors (TSLA) is responding about the complaint and said the complaint has no base and the Palo Alto-based company is taking market share from other brands, so car dealer associations are hindering Tesla’s growth. The state Department of Motor Vehicles get the support of a trade group representing California’s new-car dealers to investigate that Tesla is marketing its all-electric Model S sedan, blowing up the benefits of its financing option on its website.
Diarmuid O’Connell, Tesla’s vice president, said in an interview on Wednesday that state dealer associations exist in all 50 states. They should believe that there is no coordinated activity as the company is taking market shares away from other brands in the California market. In all the conference calls, there isn’t a coordinated effort to hold back company’s progress either in dealing directly with consumers or slowing our sales.
Brian Maas, president of the California New Car Dealers Association said that claims about the monthly finance payment for the Model S are both misleading and illegal. The California New Car Dealers Association asked the state DMV to check Tesla Motors Inc (NASDAQ:TSLA)’s advertising practices. A spokesman for the National Automobile Dealers Association, Charles Cyrill, said on Wednesday that this is a state issue that should be discussed in the states.
In response, a representative for the California DMV, Jan Mendoza, said that the agency has received complaints from the public and other entities about this matter and may investigate issues under its legal authority if required.