Bill Would Allow Carmakers to Sell New Cars Directly to Customers

A measure introduced in the Legislature would shake up the time-honored way new cars are sold to consumers in Texas, News Radio 1200 WOAI reports.

Through laws that date back to the 1930s, new cars are only allowed to be sold by independently owned dealerships.

But the proposal would change that, and allow the auto manufacturers to own the dealerships or sell cars directly to consumers in other ways.

Even though Tesla was not mentioned by name in the proposal, the measure is mainly to support the California-based electric vehicle maker, which does not have a dealer network, and sells its cars directly to customers like Best Buy sells TVs, through retail centers, often in shopping malls.

Currently, Tesla gets around the state law by opening 'showrooms, like one it is in the process of opening in Leon Springs near the Dominion.

While customers can look at the cars there, they cannot be test driven, the showroom employee cannot even quote the price or do anything that could be considered 'selling.'Dealers say their network is necessary for several reasons.  They say the dealership assures that mechanics familiar with particular nameplates will be avaialble to service vehicles, and that replacement parts will be available.  The dealerships also say that, were it up to the car maker, sales outlets would only be located in major cities, where most of the customers are, depriving small towns and rural areas with major economic centers.

This measure is seen as facing a very steep climb in the Legislature.  

Auto dealers, especially in small towns, are generally the leading citizens of the communities, where they do everything from support local charities to building youth sports parks, with the name of their dealership painted prominently on the outfield wall.

Dealers are also a potent force in the Legislature, where they frequently contribute to campaigns and are often leaders in political parties and think tanks.

Tesla has been fighting hard for access to the huge Texas market, and has indicated it may be willing to open a dealer network if necessary.

But Tesla says, due to the unique construction and operation of electric vehicles, traditional dealerships selling internal combustion cars, cannot properly tell customers about EVs.

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