Rhett Ricart has a simple answer for why direct sales keeps failing to unseat franchised dealers: history already ran this experiment, and the results came in during 2020.
Fresh off receiving Ford's Lifetime Achievement Award in Las Vegas, Ricart, now executive chairman of his family's dealership group, joined the show to talk through what decades in the business have taught him about the industry's recurring fights.
The Argument, In His Own Words
People that bought Teslas were waiting six, eight, ten, twelve weeks to get their cars worked on. Not so with the franchise auto dealers. That's the reason the franchise auto dealer model works. It works for customers. It works for the company. It's the best model for it.
His point isn't nostalgia. It's that COVID was the closest thing the industry has had to a live stress test, and the franchise network was the part of the system that held under real pressure while direct-sales service backlogs stretched into months.
Why He Thinks the Push Keeps Coming Anyway
Direct sales isn't new; Ricart's read is that manufacturers keep testing the same idea, Tesla, Rivian, Scout, Slate, and keep generating the same friction with their own dealer networks without actually improving on what the franchise model already does well.
Hopefully the manufacturers have learned how many times they got to get hit over the head with the same baseball bat before they figure out: leave the model alone. It works really, really well. Not only in good times, but in chaos. And trust me, we are going to see more chaos in the future in the automobile business.
The Threats He'd Actually Watch
Direct sales isn't the only pressure point Ricart flagged from his "80,000-foot" vantage point. Chinese vehicles and right-to-repair made his list too, with a common thread: keeping control of the customer relationship and the technical expertise that comes with factory-trained service, rather than losing it to companies with fewer ties to U.S. dealer networks.
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The lesson isn't that direct sales will never work. It's that it hasn't yet, and the reason keeps being the same reason.
Ricart's framing is worth sitting with heading into a period he expects to bring more disruption, not less. The franchise model's advantage was never that it's flashy. It's that it's been stress-tested in circumstances direct-sales companies haven't had to survive yet.
