Fisker and Tesla taking different approaches to dealerships
Both Fisker Automotive and Tesla Motors are bringing electric-powered luxury sedans and convertibles to market, but each is going about it in entirely different ways. Fisker's strategy, steered by former BMW and Volvo sales director Vic Doolan, is to license independent dealerships – some of the biggest in the country – to sell their premium green automobiles on their behalf. Tesla's approach, on the other hand, is to set up factory-owned stores which the company likens to Apple stores.Of course, each approach has its benefits and drawbacks. For Fisker, makers of the Karma sedan and upcoming Karma Sunset convertible, selling through existing dealers promises to streamline the process, tapping into professionals already savvy to the local market, capable of dealing with customers and able to exchange used cars. Tesla, on the other hand, which makes the Roadster (pictured right at the company's LA store) and upcoming Model S, wants to more directly manage the sales and service process with its own retail outlets. However, that comes at the cost of rapid expansion. So far Tesla's only got stores in California, though additional locations are planned for Chicago, New York, Seattle and Washington, London and more.
Gallery: Tesla Motors Menlo Park Store
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Reader Comments (Page 1 of 1)
Hamud 9:06AM (4/29/2009)
In this case, of low volume sales, I prefer factory-owned stores, at least in the beginning. Costumers get a better and more exclusive treatment. When the product is settled and better known then you can think on licensing new dealerships.
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koloth44 11:35AM (4/29/2009)
I would have said the opposite. Opening their own stores is a drain on Tesla's already strained finances, particularly for an unproven, expensive, niche car. Apple didn't start opening their own stores until they were already an established brand.
Fisker, on the other hand, can focus on their cars and engineering, rather than also dealing with their own stores. While this does limit their control somewhat, I don't think it will be as big of an issue. They won't be partnering with the local Chevy dealer, I'm sure they will be looking at large, premium dealerships, with experience selling expensive cars and the service that such customers expect.
Patrick 11:38AM (4/29/2009)
Stand-alone stores are good for marketing and brand image, but is very costly to do. I saw a Smart dealership and thought, wow, that is stupid. They only sell 1 car. I would have seriously considered partnering up with existing dealerships to dramatically lower the costs.
Jei 9:20AM (4/29/2009)
These separate decisions are basically a toss-up in terms of long-term success.
In the licensing option, Fisker wll have to depend on the individual dealership staff to sell their models as confidently as they sell the dealer's initial brands. And though Fisker may have their electric cars in high-end outlets, it will still have to initially compete with what's already there. While customers may come in to the dealership to shop, they may not be ready/prepared to leave with an electric vehicle.
In the directly-owned outlets option, Tesla knows that when foot-traffic walks thru the door, they have some knowledge of the brand and want to learn more & possibly buy. But the brand will have to start out interesting and continue to stay interesting enough to keep potential customers visiting their stores due to a lack of a full model line-up.
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John 9:23AM (4/29/2009)
Doesn't factory owned stores violate many state level franchise laws for car dealers?
That's always been my understanding.
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Dude 9:43AM (4/29/2009)
You are correct, but it's about time those laws were changed.
Jei 1:10PM (4/29/2009)
Those existing franchise laws are a big portion of the problems GM, Ford, & Chrysler are having with their dealer network.
skicat 9:44AM (4/29/2009)
Fisker risks its entire enterprise by going with established car dealers. In 38 years of driving and owning autos, doing business with dealers has always been the least pleasant experience. Every carmaker has lost customers for life because of poor dealer sales and service.
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letstakeawalk 11:56AM (4/29/2009)
...and many marques have won customers for life because of excellent dealer service.
I think Fisker is going to be more successful, because they are going to get wider distribution. I won't go to NY or LA to buy a car, but Florida or Atlanta are both just a few hours drive.
dukeisduke 11:01AM (4/29/2009)
Tesla is on the right track here, since they sell hideously overpriced items.
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Cray 7:01PM (4/29/2009)
I think if Tesla can survive the first 5 years, their factory-owned stores will pay off. Ultimately it could be a major marketing machine, much how Apple is today. As long as the quality of their cars are consistent with their branding, they could thrive.
I don't think Tesla is first car company to market their cars this way. I believe Saturn dealerships give the "exclusive" perception. Saturn's problem is their cars were not desirable by the demographic that is heavily "brand" influenced. They didn't do enough to separate themselves from the rest of the cars out there in the same price bracket.
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