Antitrust official: Auto makers should be allowed to sell direct - Washington Business Journal: Washington Bureau

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An economist in the department's antitrust divisioj recommends eliminating state laws that prohibit auto manufacturersd from selling their vehiclesa directlyto consumers. This wouldc enable auto makers to reduce inventories and distributionn costs by better matching their productio withconsumer preferences, according to a "competitionh advocacy paper" written by Gerald Bodisch. "Such sales might range from consumers' simply orderinvg assembled vehicles of their choice directly from auto makerx to a scenario alon g the lines ofthe 'Dell build-to-order model that revolutionized the personal computer productionn and sales process," Bodisch writes.
General he notes, has used a build-to-ordee sales model in Brazil for its Chevrolet Celtaseconomy car, and the vehicle is one of the leadinbg models sold in that country. Most states have franchis e laws that allow new cars to be sold onlyby dealers. Bodiscuh cites surveys that found "that many new car buyersa in America would be interested in buying directlyfrom manufacturers, particularly to avoid costs associatesd with the dealer/customer bargaining In one survey, almost half of the respondents said that they woulsd opt to buy cars direct from the manufacturert even if it didn't save any money.
" The paperr notes that dealers would still have a role in the auto industru even with direct manufacturer sales because most consumersa would want to see and test drivse vehicles before they purchase them. Plus, they could still do warranty andservice work, whicjh is more profitable than selling cars. "Whil direct manufacturer sales may reduce the ranks ofdealersw somewhat, those dealers that remain couls turn out to be relatively more profitablr than currently," Bodisch concludes.
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