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USA: The car dealers’ racket

The New Jersey Motor Vehicle Commission last week voted to prohibit Tesla from selling its electric vehicles directly to consumers, a decision endorsed by the New Jersey Coalition of Automotive Retailers and Gov. Chris Christie. New Jersey is the third state, after Texas and Arizona, to block Tesla from direct sales, all under the guise of protecting consumers. Some free market.

Of course, auto dealers prefer an arrangement in which they have exclusive rights to sell a certain manufacturer’s product. I know because my father owned a Ford dealership for decades in Montrose, Calif., and we were proud to represent such an honorable American product. And there’s nothing wrong with a manufacturer offering to sell its products only through designated retailers. This is common practice in many industries so that manufacturers don’t compete against themselves and undercut their retailers.

But there’s also nothing wrong with a manufacturer offering to sell its products directly to consumers. This too is common practice, as evidenced by the billions of dollars that are exchanged online between manufacturers and consumers. Some bricks-and-mortar businesses have suffered as a result. But as conservatives like to say, that’s the free market at work.



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