ElI5 why do we have car dealerships?
In: 160
How would you expect to buy a car otherwise? Car dealerships are not all that different than other retail models, buying goods wholesale and selling them… just like buying some Nikes from Foot Locker or a Samsung TV from Best Buy.
The local franchise dealer model was put in place in part to insure access to repair and parts for repair, and to know that they’re meeting the manufacturers’ standards.
But the manufacturers didn’t want to own networks of 1000’s of dealerships and be in the retail business on top of manufacturing.
And the franchise dealer model creates more competition for customers, as an area might have 5 or 10 Ford dealers that customers can cross shop if they want an Explorer, vs. corporate Ford stores all selling for same price.
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