Tesla Motors Inc. Gets Leg Up From FTC On Direct Sales

The Federal Trade Commission reiterated its low-key opposition Monday to state laws that ban direct sales of motor vehicles. https://www.ftc.gov/news-events/blogs/competition-matters/2015/05/direct-consumer-auto-sales-its-not-just-about-tesla Tesla Motors Inc. TSLA has faced legislative obstacles in at least several states to its plan to cut out third-party dealers used by other auto manufacturers. "States should allow consumers to choose not only the cars they buy, but also how they buy them," according to an FTC blog signed by three of its bureau directors. The writers noted that their views don't necessarily reflect the opinion of FTC members, and that the blog doesn't solely concern Tesla's business plan. Michigan legislators recently sought to carve out an exception to a ban on the practice enacted last year, in order to enable sales of three-wheeled vehicles made by startup automaker Elio Motors. http://www.eliomotors.com/ In response to a request for comment from Michigan legislator Darwin L. Booher, the FTC's Office of Policy Planning said last week that manufacturers should be free choose their distribution method to be "responsive to the desires of motor vehicle buyers." https://www.ftc.gov/system/files/documents/advocacy_documents/ftc-staff-comment-regarding-michigan-senate-bill-268-which-would-create-limited-exception-current/150511michiganautocycle.pdf The office made similar comments a year ago concerning restrictions in Missouri and New Jersey, and noted that the FTC found in 1986 that state restrictions on the sale of motor vehicles harm consumers by causing prices to rise. New Jersey has recently modified its ban on direct sales, but at least three other states have specifically passed laws to prohibit Tesla sales: West Virginia, Texas and Arizona, according to the Detroit News. http://www.detroitnews.com/story/business/autos/2015/05/11/ftc-michigan-tesla/27122673/ The National Automobile Dealers Association has said that car dealers drive prices down through competition, and make autos safer by taking the side of consumers in warranty and safety recalls. There are 17,700 new-car dealerships with nearly 32,000 domestic and international franchises that employ more than 1 million people in the U.S., according to the association. http://www.nadafrontpage.com/NADA_Get_The_Facts.xml