Tesla Motors Inc May Be Inspiring Some Dealer Chains

Tesla Motors Inc (NASDAQ:TSLA)’s direct sales model has been criticized and opposed by auto dealers, but at the same time they are taking lessons from the company. Despite all the criticism, it seems like the company is not alone when it comes to changing the car buying process.

Tesla Motors Inc May Be Inspiring Some Dealer Chains

Sonic to make buying process easy

A recent note from Morgan Stanley refers to Sonic Automotive as the “Tesla of dealers.” Such a comparison comes from the expectations that Sonic will have a Tesla-like impact on the automotive industry, says Green Car Reports.

The dealer chain offers the option of a 60-minute turnaround in buying a car. It is headquartered in Charlotte, NC and includes around 100 dealers in 14 states representing 25 car brands. Sonic says on its website that it is a new era in car buying.

Sonic invites buyers to connect with it in the year 1 A.D. (after dealerships), which offers a unique and much simpler buying process requiring less paperwork and haggling. Customers will get a single “Experience Guide” throughout their sales process, and various online tools will help customers in browsing before entering the dealer showroom.

AutoNation plans a Tesla-like online focus

Tesla gave more importance to its online ordering and acknowledged it as the cornerstone of life in the digital age, a lesson that has been picked up another dealer chain. AutoNation, which is the largest dealer chain in the U.S., shelled out $100 million to increase its brand awareness and promote online sales, according to The Car Connection.

On the new website, buyers can make down payments, prepare trade-ins and arrange financing online. In the beginning, around 30 AutoNation stores in Florida will be offering the services starting Dec. 11, but customers will only be given the facility to choose options and make down payments. The online shopping push will hit full throttle next year, and until then, customers have to visit a physical dealership to take delivery of their cars.

Although these dealers are taking hints from Tesla, they are not facing the angst of dealers because they are independent of car makers, hence, they are no threat to the traditional franchise model.

About the Author

Aman Jain
Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at amanjain@valuewalk.com