Why dealerships exist for vehicles?

[Kev m]

well okay, but then the "shops" who distribute the cars would just have a garage like a standard dealership.  I think my initial question revolves mainly around 2 parts perhaps.  First, why not just distribution centers with set prices?

Again because it's too expensive and complicated a purchase which means there's too much room for competition.

And there are price fixing laws.

The OEM can't REQUIRE a set price unless they literally own all the retailers.

The OEM can't possibly own all the retailers and then see the first line.

Sony and Bose and Apple are in similar shoes but on a smaller scale with smaller margins so they can own some stores, but they still can't SET retail prices, only work within current law and retail sales agreements to encourage certain price structures.

When you see more significant price differences from one retailer to another on cheaper goods with much smaller margins that means the retailer has more clout than the manufacturer.

[Lannis]

First, why not just distribution centers with set prices?  The service/fix/garage end of things certainly seems to go a good way to answering this one.  Vehicles break and someone has to fix them and/or honor warranties.  But also second, how then did it come to be that buying one would become a kind of negotiation?

You can trace it all back to the degree of state regulation that dictates what dealer franchises can and cannot do.

First of all, to drive a car, a buyer must have a license issued by a state government agency,
and before it can even go home, the customer must have insurance that is regulated by a state
government agency (like an "Insurance Commission").

90 or so percent of car sales are done via financing, which is regulated by state and federal agencies (Fair Credit laws and all that).   More than half of car sales involve trade-ins, and some of these are  transactions that look like buying a house with a loan chain, with lenders required to pay off liens on other cars in other states.  And new cars require maintenance by technicians, licensed by state government agencies because of the safety implications of their work.  (Hasn't always been true, though; you didn't need a safety cert to work on a 1950 Buick).

So there's regulation at every step because cars are "different" from other consumer goods in so many ways, and the dealership structure reflects that.

Somewhere in there, someone is making a LOT of middleman money, and they're not going to expose themselves or give that up without a fight just because someone wants to order a car on Amazon .... like I'd like to do .... !

Lannis

[oldbike54]

 To some extent dealers provide a buffer for the manufacturers , and a good dealer understands their local market better than a large company can . Our local dealer was told by the mothership that he would sell 4 Aprilias for every Guzzi based on international sales . Except that our dealer has had exactly the opposite happen , way more Guzzis than Aprilias leave his premises . Honestly , due to a couple of horrible experiences with internet only businesses , give me a dealer , especially on big ticket items .

 Dusty

[bpreynolds]

Hey dudes.  You guys rock.  Must be the librarian in me that loves reading these threads.  Over the many years I’m not sure I’ve enjoyed the motorcycle threads here as much as I have the threads I’ve started on home, car, and finance advice.  As a member of at least several motorcycle boards, WG is always distinctively and pleasingly different

[Aaron D.]

Perhaps the fact that they're shipping it from a country where people probably get paid pennies on the hour, don't have health care insurance, and don't give two craps about our product safety standards also are factors that come into play with that price?

This argument will run into the political, so I'll just say that though it is a common stance in politics from every side of the turntable, it isn't quite so simple.

[Kev m]

This argument will run into the political, so I'll just say that though it is a common stance in politics from every side of the turntable, it isn't quite so simple.

I'm just saying there are drastic differences in overhead.

[Chuck in Indiana]

I don't think this is out of bounds..
In Indiana..

Yet, if I wanted to open a car dealership it would be nearly impossible, a fact illustrated by a brewing war between Tesla and GM at the Statehouse.

Tesla Motors Inc., which has long skirmished with auto dealers over its practice of selling cars directly to consumers, has accused General Motors Co. of being the driving force behind a bill to kick Tesla out of Indiana.

Tesla is licensed to sell directly to consumers in Indiana, and has operated a store in Indianapolis for two years. Indiana state Rep. Kevin Mahan has introduced a bill that would “provide that a dealer license issued to a manufacturer expires after 30 months and may not be renewed.” Tesla would have to find franchised dealers to sell in the state after 30 months.

The legislative battle comes as both companies prepare for a head-to-head competition to sell lower-priced electric cars that target the mass market next year. GM’s lobbying helped create the proposal, which some have dubbed the “Kill Tesla” bill because the legislation is specific to manufacturers of all-electric vehicles.

Selling cars in Indiana – or any state, really – is a regulatory nightmare. It’s a system set up to keep competition out. Tesla has other ideas, but notice that instead of asking for the same freedom Tesla has, Detroit is asking policymakers to burden them with the same shackles.

[Chuck in Indiana]

^^^^ That was certainly the "bad old days" for GM. By that time, there hadn't been an engineer at the head of GM since Bunkie Knudsen. Bean Counters from top to bottom, concerned about profit/loss 90 days down the road. 
When I was in the tool room, I thought, "I just don't see the big picture." Once I went into engineering, I realized there *wasn't* any big picture.
Fortunately, the "New GM" is much leaner and meaner.