The Carvana-Stellantis relationship is creating concerns among franchise dealers over whether the two companies are operating on a level playing field. On today’s CBT Live segment, Len Bellavia, Founding Partner of Bellavia Cohen P.C., explains why he believes the issue could extend across the industry and why dealers need to respond collectively.
According to Bellavia, Carvana’s relationship with Stellantis could give the online retailer advantages that traditional franchise dealers don’t receive. He argues that Carvana is operating under a dealer sales and service agreement while avoiding some of the infrastructure and operational requirements traditionally placed on franchise dealers. He says the issue isn’t limited to individual Stellantis stores since sales outside a dealer’s primary market area can affect local dealers through lost sales, trade-ins and other profit opportunities.
Simultaneously, Bellavia says traditional dealers should recognize what Carvana’s growth says about consumer expectations. He points to the company’s ability to move from roughly 30 to 50 sales a month to 1,000 at one location as evidence that customers have identified pain points in the traditional buying process. Rather than simply opposing the model, Bellavia says manufacturers could bring elements of Carvana’s seamless, touchless experience into their existing franchise networks while keeping transactions tied to local dealers.
Bellavia also urges dealers to view the issue as an industry-wide concern rather than a problem for Stellantis dealers alone. He says national and state dealer associations, dealer councils and individual dealers need to take a more proactive role because similar arrangements could emerge with other automakers and online retailers. Bellavia argues that waiting for another dealer to fight the issue could leave the broader franchise system exposed.
