FTC Staff Urges Michigan to Consider Allowing Direct Car Sales
Staff members at the Federal Trade Commission are imploring Michigan to open the door to direct sales by Tesla Motors Inc. and other car makers, reported The WSJ. In a letter sent to Michigan state Sen. Darwin Booher by the commission staff members, the agency urges the state legislature to “consider abandoning the direct sales ... Read More »
Staff members at the Federal Trade Commission are imploring Michigan to open the door to direct sales by Tesla Motors Inc. and other car makers, reported The WSJ.
In a letter sent to Michigan state Sen. Darwin Booher by the commission staff members, the agency urges the state legislature to “consider abandoning the direct sales prohibition in Michigan’s existing law, and instead permit manufacturers and consumers to re-engage the normal competitive process that prevails in most other industries.”
In October 2014 Michigan passed a law that prohibited direct sales. There is a senate bill pending that would modify the language to allow direct sales of “autocycles” — which would presumably allow direct sales for Elio Motors, a startup planning to sell a three-wheeled carlike vehicle.
The FTC’s letter stated it was in response to a request for comments by Mr. Booher on the pending Senate bill.
Tesla has fought car dealers state by state in its efforts to sell cars directly to consumers without independent dealers. The Silicon Valley car maker has said dealers won’t understand how to market the electric vehicle. Meanwhile, independent dealers don’t want car makers to have a precedent in cutting them out of the sales channel.
Michigan, Arizona and Texas are the only states where Tesla can’t sell direct to consumers from retail outlets. People in those states can buy cars online from California and have them shipped to their homes.
At the time of the passage of the law, Gov. Rick Snyder said he hoped the legislature would address the issue again. A spokesman for the governor didn’t respond Tuesday to a request for a response to the letter.
It isn’t the first time the FTC has weighed in on the issue. The commission staff previously had written similar position pieces protesting the efforts by some states to restrict Tesla’s direct sales efforts.
In many states, Tesla has come to an accommodation with dealers by agreeing to limit the number of stores in the state.
Tesla stated in response to the letter: “We agree wholeheartedly with the FTC. States should not limit how consumers buy their cars.”
More Industry

RV Group Expands Carolina Footprint
Blue Compass RV Columbia Northeast is the 13th RV dealership owned by Blue Compass in the Carolinas.
Read More →
Agent Acumen
An Agent Summit panel of people who’ve been supporting auto dealers for years gave both timely and timeless advice for those starting out or mulling the prospect.
Read More →
Missed Maintenance Creates Opportunity
As families get back on the road and into daily school routines, service drives have an opportunity to capture customers who are behind on recommended vehicle maintenance.
Read More →
Mitsubishi Unveils U.S. Plan
The automaker announced a strategy that includes an expanded lineup and dealership presence, along with more ‘rugged’ and electric models.
Read More →
Selling to Grow
The question of whether you should sell your agency and if so, when, is up to you. But it’s a question worth asking to ensure you keep the business on the right path for yourself, employees and clients.
Read More →
Recalled Vehicles Hit 5-Year High
Though the number of events has fallen so far this year, impacted units are up significantly. Meanwhile, regulators consider consumer notification changes.
Read More →
Auto Group Acquires Top-Performing Rooftop
Car Pros sold its Kia Huntington Beach location to Sutherlin Automotive Group, marking the buyer’s third location in Southern California.
Read More →
China as Pacesetter
Automotive leaders huddled on where North America stands in the global picture and how it can strengthen its position against the Asian juggernaut’s surging industry.
Read More →
BMW Concept Car Makes Fuel to Burn
The prototype developed in concert with a South Carolina university engineering team generates more solar energy than it uses in a typical daily commute.
Read More →
South Carolina Auto Group Downsizes
Florida-based group Holler-Classic has acquired four rooftops, its first in South Carolina, from Dick Smith Automotive Group.
Read More →