The Texas retail market for new motor vehicles helps drive the state economy, making it a leading example for the nation. I am proud to be part of it.
The Texas economy prospers when consumers have competing options for a product available to them, ease of access to sales and service centers, and local businesses that employ residents and give back to Texas communities. That is what the franchised dealer network does in Texas.
The 1,309 franchised dealerships widely distributed across 284 Texas cities and towns ensures the greatest availability of new vehicle sales and service outlets and the greatest convenience for consumers.
Through the franchised dealerships throughout the state and the efforts of their 97,000 employees, Texas dealers efficiently retailed over 1.6 million new vehicles and over 1 million used vehicles last year. And these independent businesses did so in a marketplace in which competitors compete fiercely on price and service.
These businesses also provide additional services for the benefit of the public — handling trade-ins, parts sales and service, financing options, and completion of warranty and recall work. Through all these activities, franchised dealers foster a robust industry that has a direct impact on more than 40 other industries.
The franchised dealers greatly contribute to state and local communities as major employers and taxpayers. Texas dealers collect billions of dollars annually for the state, and well over half of the taxes they pay remain in Texas’ economy. And when a Texas franchised dealer makes a profit, that profit is re-invested into a Texas community.
Franchised dealers and their employees are also significant charitable contributors — donating nearly $50 million to charities each and every year. Dealership employees serve on numerous non-profit boards, including churches, rotary clubs, school boards and more. Dealer employees are neighbors, friends and peers.
Despite the fact that no other existing vehicle manufacturers are seeking to change current law, Tesla is once again attempting to overthrow the Texas franchised dealer system in favor of direct sales by manufacturers.
Direct sales by a manufacturer would mean no competition on price and service, no incentive to have a widespread retail network and profits sent back to corporate shareholders as opposed to re-invested in our communities. That’s not a good deal for either Texas or Texans.
If the franchised dealer system is upended to allow direct sales by manufacturers, one of the most stable and prosperous franchised dealer models in the country would be undermined.
Texas legislators have gotten it right time and time again. The franchised dealer system successfully promotes competition, protects consumers and benefits communities throughout Texas. Let’s keep it that way.