Ohio State Senator Michael Rulli recently introduced a bill that would allow electric vehicle-startup Lordstown Motors to sell directly to consumers. The Ohio Automobile Dealers Association (OADA) has spoken against the bill, and on today’s show Zach Doran, President of OADA, shares his thoughts on the proposed legislation.
Doran begins the conversation by clarifying that OADA isn’t against Lordstown Motors. He says that he hopes the EV startup becomes a major success story for the state of Ohio. However, dealers in the state believe the franchise system is best suited for selling vehicles. The franchise system provides appropriate checks and balances in the car buying process and provides consumers with the best experience when buying a vehicle. Doran says that dealers would like to see the franchise system stay in place.
Many consumers believe direct sales eliminate “the middleman” of the franchise dealer. Doran explains how this line of thinking is inaccurate. Dealers provide value to their products and their local communities through competitive pricing in sales, service, and parts. The franchise system also allows consumers to fix recalls quickly and efficiently.
“Some of these new manufacturers have looked at the stock price of Tesla and they see that as very attractive,” said Doran. “As a result, they feel that’s the way they should go, and it appears they’ve put the interest of Wall Street ahead of the interest of consumers on main street.”
Doran concludes the conversation by sharing what he believes dealers should do in response to the proposed bill. Doran would like OADA members to contact their legislators. State lawmakers need to hear from dealers who are working on the frontlines on this issue. Lawmakers need to understand the level of employment and investment that dealers have, and they need to understand examples of warranty and recall issues. Dorran reiterates that the dealer network provides stability for consumers to have strong price competition and convenience to have their vehicles repaired.
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