Tesla’s Focus On Online Sales Could Be Exactly What The Customer Wants

Tesla’s move to focus mostly on online sales made investors and market analysts anxious about the carmaker’s financial status and its ability to increase its market share.

However, others say that Tesla might be on the right path, giving customers exactly what they want. “What Tesla is proposing is actually consumer friendly,” said Rosemary Shahan, president of the advocacy group Consumers for Auto Reliability and Safety to CNBC. “It gives you more of an opportunity to take control of the action. and you’re not on the dealer’s turf.”

The process of buying a car has been one of the most complained about, according to the Federal Trade Commission. In fact, the auto industry is among the Top 10 most-complained-about topics over the last five years, with more than 104,000 complaints received just the last year.

While the data includes auto repair and gas prices related complaints, over 70 percent of it is about auto sales and leasing, according to the FTC.

There are plenty of studies that show an increasing amount of customers doing most of their research online before they visit a car dealership. In fact, a study from Cox Automotive found that around 85 percent of car buyers would more likely buy from a dealership that allows them to start or even complete nearly all of their car purchase online.

“We don’t like negotiating,” said Jack Gillis, Consumer Federation of America’s executive director. “We’re matching wits with a person who is trained to negotiate to get as much money from us as possible from us, who does it 24 hours and is most likely rewarded for doing so. That simply lends itself to a very uncomfortable experience.”

Tesla’s shift to online sales will most likely reignite the war between the car maker and traditional car dealerships but the industry’s switch to this model looks inevitable.

“Over the next decade, many car dealerships will close,” said Gene Munster, founder and managing partner at Loup Ventures, a venture capital firm that focuses on technology. “We will look back at some of the absurdity about the way people bought cars.”

Despite acknowledging that online sales will reduce costs for Tesla, some investors worry that store closures might hurt demand. “Salespeople have been important in up-selling Tesla customers, as well as selling Tesla solar products,” said Toni Sacconaghi, Bernstein analyst.

more photos...
  • QUITE FRANKLY THIS ARTICLE SHOULD HAVE BEEN WRITTEN YEARS AGO WHEN TESLA STARTED ON-LINE SALES NOT AFTER THE ANNOUNCEMENT THAT TO BUY THE BASE MODEL YOU HAVE TO GO TO A STORE (THAT WAS SUPPOSED TO BE CLOSED) OR GIVEN THEM A CALL.

  • Rocket

    As a general rule, it’s true that car buyers don’t like to negotiate. But there is no negotiating on any Tesla, so it’s a non-issue. If people can touch, sit, poke, prod and test drive without pressure to wheel and deal, why in earth wouldn’t they visit a local brick and mortar showroom before rolling the dice on a $50k+ purchase?

    • Six_Tymes

      spot on. the only answer to your question that I can think of is, lazy wealthy people

    • GobbleUp

      Negotiated price and content adds to my model S.
      Just like any other car purchase.

  • Six_Tymes

    *others say

    the reality is, all of them are guessing. “time will tell” who was correct.

  • lagann

    While I hate having to deal with sales persons, which in many cases doesn’t know what he’s talking about… I would never buy a car, no matter how cheap it is, without test driving it first.

Exeed E-IUV Design Concept Looks A Bit Too Far Into The Future

The electrified Exeed E-IUV aims to be more than just another conventional car.

$1.1 Million Nissan GT-R50 By Italdesign Splits Opinions In The Big Apple

The Nissan GT-R50 will be capped to just 50 units worldwide with prices starting at $1.12 million.

Cadillac Looks To Rebound With The CT5, But It Is Better Than The CTS?

Cadillac is hoping to reverse declining sales with the all-new CT5 which goes up to order this fall.

New Skoda Vision GT Concept Teased, Could Preview Kamiq GT For China

Skoda says the Vision GT study is “the modern urban car and the new sporty Skoda SUV for China”.

2020 Toyota Highlander Looks At RAV4 For Inspiration, New 34 MPG 4-Cylinder Hybrid (Live Pics)

The three-row 2020 Toyota Highlander SUV is offered with a regular V6 and a hybrid 4-cylinder.

Giulia And Stelvio QV NRing Edition Are How You Spend Nearly $100k On An Alfa

Alfa Romeo is offering U.S. buyers just 110 units in total of the Giulia and Stelvio QV NRing.

Hardcore Mercedes AMG GT Black Series To Be The Brand’s Quickest Accelerating Model Ever

First new Mercedes Black Series model in seven years will hold the title until the AMG One arrives.

Audi’s Futuristic AI:ME Is A Compact EV With A Pretty Welcoming Interior

Audi’s latest electric concept gives us a first taste of the brand’s upcoming compact EV.

Maserati’s One-Of-One Levante GTS Delivered To NBA Legend Ray Allen

The former NBA basketball player’s unique Levante has been personalized by Maserati’s One of One division.

Jaguar Design Boss Doesn’t Want Giant iPad-Like Screens In His Cars

The restyled Jaguar XE’s dual-screen setup is what design boss Ian Callum considers acceptable.