FTC urges MI to reconsider direct auto sales ban

A Tesla Model S. (May 6, 2015)

LANSING, Mich. (AP) — The Federal Trade Commission is urging Michigan to reconsider its law that says that automakers can only sell through franchised dealers.

The ban on stores where consumers can buy vehicles directly from manufacturers has been criticized by electric car maker Tesla Motors.

In a letter Monday to Republican state Sen. Darwin Booher of Evart, three FTC staff members urged Michigan to drop its ban. The FTC says it amounts to “protectionism” for dealers and is “likely harming both competition and consumers.”

>>Online: Read the letter (pdf)

Gov. Rick Snyder in October signed a bill clarifying state law on the issue. He says he’ll take a look at the FTC letter.

The letter came after Booher asked the agency about a pending Michigan Senate bill on “autocycles,” which are enclosed three-wheelers.

Tesla announced last week that it is buying a tool and die plant in metro Grand Rapids — its first property holdings in the state.


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