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NADA Is Terrified of Tesla 455

Posted by samzenpus
from the not-on-our-playing-field dept.
cartechboy writes It's no secret that the National Automobile Dealers Association has been trying to block Tesla from selling cars directly from consumers, but to date, it has been defeated countless times in many states. Now NADA put out a release and promotional video touting the benefits of dealer franchises, something Tesla has shunned. NADA mentions price competition, consumer safety, local economic benefits, and added value.
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NADA Is Terrified of Tesla

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  • Speculation... (Score:5, Insightful)

    by mythosaz (572040) on Wednesday June 18, 2014 @07:14PM (#47267655)

    While possibly true, it's complete speculation to tie this to Tesla.

    But hey, Tesla gets page views.

    • Re:Speculation... (Score:5, Insightful)

      by Anonymous Coward on Wednesday June 18, 2014 @07:56PM (#47268039)

      How is it not tied to Tesla? All cars in the US are sold at dealerships, well at least all cars you don't put together yourself that you order from the back of a magazine. Tesla rolls in recently and is the ONLY one not using dealerships. Why would the NADA have to start pimping themselves if people never had an option not to use a dealer? Car dealers are SCUM. They are leaches. Their goal is nothing but to separate you from as much money as they can. Remember that the next time you are sitting at a salesmans desk that is out in the open on the sales floor with a lot of hustle and bustle around, people walking by and they are playing music over the speakers in the showroom relatively loud. There is a reason they do those two things and its not for your benefit. Ask them why that ONE car stock number 7782 that was advertised for 12,888 is not in stock and why the advertised price on another car is $15,800 but that assumes every rebate that you cant possibly get and $5000 down and then another $1000 for a doc fee plus a delivery change of $781. It's not 15,800. Why not just advertise it on your site or the paper for $1000 and add a $18,000 deliver charge? What's the difference? Again they are SCUM. People only kind of like dealers that only do most of those things, it is relative. That is sad. If you like a dealer, it is because you got ripped off and you didn't even know it.

      Helping the local jobs and economy argument is bullshit. If that was the case, let's create dealerships for everything and we will all be rich, all have jobs, and be debt free. Same as the RIAA/MPAA arguments. Money does not grow on trees and people do not have a limitless supply. People would spend the money they spent at a dealer somewhere else, possibly at another local store with local employees. Cars still need to be repaired and parts bought for them, that will still happen with or without a dealership.

      • by LifesABeach (234436) on Wednesday June 18, 2014 @08:36PM (#47268305)
        You didn't mention the plad suits; why?
      • Re:Speculation... (Score:4, Insightful)

        by Maxo-Texas (864189) on Thursday June 19, 2014 @01:58AM (#47269711)

        Look.

        Go to the "internet fleet sales" and get a bid from your local dealers.

        For example, I got 19500, 20000, 22000, and 23500.

        I went in, did the car deal in 2 hours and I was done.

        Could I have gotten the car deal for 19200? Sure. I have a friend who REVELS in doing this. He will spend 3 to 4 hours negotiating with the salesman and then the manager. They think they have him trapped in a room with them-- but actually he has THEM trapped in a room with him. After four hours, he'll still negotiate over the last 12 to 17 bucks. And usually win.

        Dealers serve a purpose. They need a reasonable profit.

        If you seriously want to buy a car amazon style and not get the support of a dealer then more power to you. You may be like my friend (only in a different way).

        Car dealers are just people and they need to earn a living too. And most car sales people earn average or slightly above average incomes.

        But seriously "Internet sales" for the win. Get a bid, no negotiating. You walk in and THAT'S the price you will get. No ripoffs... no talking to the manager.

        • Re:Speculation... (Score:5, Interesting)

          by Rich0 (548339) on Thursday June 19, 2014 @05:59AM (#47270275) Homepage

          I actually went in with a bid from Truecar, and the dealer claimed that the price they quoted included discounts I wasn't eligible for. Never mind that they asked the eligibility questions online and I answered them correctly. I'm sure they violated their agreement with Truecar and what they did was illegal, but I wasn't about to try to fight it especially since they were in another state.

          Still, I got a price much better than I probably could have negotiated. I thought the price they actually quoted was too good to be true, but I figured I was better off starting at a price 30% below sticker and having them talk me up, than starting at sticker price and having to talk them down. I got the price I figured was fair in the first place. I just felt dirty walking out all the same.

        • Dealers serve a purpose. They need a reasonable profit.

          If they serve a purpose, they deserve a reasonable profit. For the life of me, I cannot see what that purpose is. Perhaps you can enlighten us.

          • Re:Speculation... (Score:4, Insightful)

            by idontgno (624372) on Thursday June 19, 2014 @09:45AM (#47271395) Journal

            Their purpose is to earn a reasonable profit, for any definition of "reasonable" that translates to "as much as I can get away with".

            This is capitalistic economics: "What the market will bear".

          • by eth1 (94901)

            Dealers serve a purpose. They need a reasonable profit.

            If they serve a purpose, they deserve a reasonable profit. For the life of me, I cannot see what that purpose is. Perhaps you can enlighten us.

            Overcharging for maintenance, and conveniently collecting large numbers of scummy sales droids into one location where they can normally be avoided.

          • A central, local point of contact.
            A specialist in the legal issues around buying a car.
            Mechanics trained in a particular brand of car supported by a shop with the proper tools and materials.
            Live, human customer service.
            A central, local place to buy accessories for the car.
            Someone to keep track of maintenance and remind me when it's time so I don't overlook it and damage the car.
            Someone local to do recall repairs if they are needed.
            Someone I can trust more than "Rick" at the local garage to have standard pri

        • Re:Speculation... (Score:4, Interesting)

          by dcw3 (649211) on Thursday June 19, 2014 @08:06AM (#47270665) Journal

          For people who hate negotiating, your method is probably best. But, even the quotes you received were likely gamed by the dealers giving them. Dealers don't work in a vacuum...they know the other dealers, and know what numbers you'll be able to get from them. If you think about it for a moment, the dealer that quoted 23500 would go out of business if he was constantly being undercut by his brethren. So, by giving customers these quotes, they make the customer feel like a winner, and often will take turns.

          As for your negotiator friend, you need to consider the value of your own time. I'm generally in the same boat as him, but I won't try to squeeze them for the last $100...it's just not worth my time. Once the dealership has spent several hours with you, they've already made an investment in time. Walking away from a deal after hours, isn't something they ever want to do.

        • If they actually provide a service that people need, then why are they so afraid of direct sales? It seems to me that, like home realtors, car dealerships ought to be perfectly capable of functioning in a mixed market.

          • Re:Speculation... (Score:5, Insightful)

            by Maxo-Texas (864189) on Thursday June 19, 2014 @10:21AM (#47271847)

            Firstly, I don't think car dealerships should be legally protected. So we are in agreement on this point.

            However....

            Best Buy should have been perfectly able to function in a mixed market. But instead people use them as a show room- look at the products, and then buy online.

            The second is probably a better model. Customers test drive and look at the cars at a dealership and then buy them from the non-dealerships. And then probably try to get support from the dealerships.

            The same thing is true for crafting and several other fields. The biggest thing we lose is customer service. Man- you look at the shows from the 50's and customer service levels were 10x what they are now. Department stores literally had an employee at every counter.

            By squeezing out the profits- we lose customer service and employment opportunities. It's like the reverse of a virtuous cycle. The end is everything automated and online with very few humans. I don't see what's going to stop it.

            • Customers test drive and look at the cars at a dealership and then buy them from the non-dealerships. And then probably try to get support from the dealerships.

              This is not an issue with regard to Tesla. There are no dealerships, so the only company you can get test drives from is Tesla themselves.

              Likewise support and service comes from Tesla. I believe they use local third parties in some cases to deliver their service. But it's Tesla themselves that you are dealing with.

              Altogether a far better experience than scummy dealerships.

        • You could also try a car buying service, such as the free one that AAA offers. You specify what you want, and the service goes out and finds the car. And because it was bought through the conventional network, you can still get dealership service in your town after the purchase.

    • Re:Speculation... (Score:5, Interesting)

      by fuzzyfuzzyfungus (1223518) on Wednesday June 18, 2014 @08:07PM (#47268113) Journal

      While possibly true, it's complete speculation to tie this to Tesla.

      But hey, Tesla gets page views.

      Not really. Tesla doesn't really have the volume (or the low end offerings) to eat the dealerships' bread and butter(except possibly some relatively niche outfits who used to sell a lot more ~100k ICE vehicles to techies made good); but they have been extremely aggressive about 100% company-owned and operated sales locations, and have skirted the laws in various ways ("Information centers" that look sort of like a dealership except that the staff are forbidden to sell you anything, just show you stuff and you can go use that computer over there to buy online if you want...) in states where the dealerships have purchased protective legislation.

      Barring a radical overthrow of the automotive order, Tesla isn't personally going to terminate dealerships; but if their model holds up, persuades lawmakers, survives in court in more hostile states, etc. it can be copied pretty much verbatim by any manufacturer that cares to.

      And the NADA can't exactly be ignorant of how...beloved...a traditional industry it is that they represent. Merely seriously proposing that we could eliminate car dealers, in our time!, probably excites more people than fancy electric cars do. This isn't one of those "Upstart company disrupts traditional business right in the face, laughs" situations where hand-wringing moralists write books about the moral decline and inevitable decadence of our civilization occasioned by the hardships of the traditional business.

      • Re:Speculation... (Score:5, Insightful)

        by demachina (71715) on Wednesday June 18, 2014 @08:30PM (#47268277)

        Tesla's 3rd generation car is supposed to be a mass market vehicle that may disrupt the "automotive order" if Musk manages to build it. The giga battery factory he is looking for a home for is a critical component since it is critical to have enough affordable batteries for a mass market electric car.

        Tesla today wont disrupt NADA, but Tesla in a few years very well may, they know it, so they are trying to nip it in the bud.

      • Re:Speculation... (Score:5, Insightful)

        by WindBourne (631190) on Wednesday June 18, 2014 @08:40PM (#47268335) Journal

        Barring a radical overthrow of the automotive order, Tesla isn't personally going to terminate dealerships; but if their model holds up, persuades lawmakers, survives in court in more hostile states, etc. it can be copied pretty much verbatim by any manufacturer that cares to.

        In fact, the ones that they fear is not tesla, but China. If Tesla opens the door this way, then the Chinese companies will come to America in exactly the same fashion.

        • by Jeremi (14640) on Thursday June 19, 2014 @12:11AM (#47269337) Homepage

          In fact, the ones that they fear is not tesla, but China. If Tesla opens the door this way, then the Chinese companies will come to America in exactly the same fashion.

          Given the product quality and level of support provided by Chinese manufacturers -- if American dealers can't compete against that, then they really don't have any reason to exist.

      • Re:Speculation... (Score:5, Insightful)

        by hendrips (2722525) on Wednesday June 18, 2014 @08:41PM (#47268341)

        Indeed, I moderately dislike Tesla generally and Elon Musk specifically, and I'm neutral on both electric cars and luxury cars. Nevertheless, I'm cheering myself hoarse for Tesla in this fight. I'd cheer equally for just about anyone who would make a similar effort to reduce the amount of sliminess involved in car purchases.

        • by Immerman (2627577) on Wednesday June 18, 2014 @11:04PM (#47269031)

          But without the sliminess of dealerships, how will we keep the engines lubricated? Sure, we can change the oil regularly, but we all know that even many years later it's still mostly the final remnants of salesman slime that really keep your engine running smoothly. Just look at how many cars, and other goods for that matter, break down as soon as the warranty expires and the last traces of salesmanship finally evaporate. Coincidence? I think not.

          • by TWX (665546) on Thursday June 19, 2014 @12:50AM (#47269489)
            The electric car doesn't need nearly as much grease as there are no reciprocating engine parts to keep lubricated. There certainly are axle and wheel bearings, and possibly some other random bearings, so it should be a lot easier without salesmen-slime. We can reserve that long-lasting grease for the door hinges.
        • Re:Speculation... (Score:4, Informative)

          by DigiShaman (671371) on Wednesday June 18, 2014 @11:54PM (#47269271) Homepage

          Say what you will about Saturn, but I remember back in the 90s how purchasing a car from the dealership was pretty transparent. The price was hardly obfuscated.

      • by whoever57 (658626)

        Not really. Tesla doesn't really have the volume (or the low end offerings) to eat the dealerships' bread and butter(except possibly some relatively niche outfits

        If you consider BMW niche, then yes.

        If I walk round my office car park, I see more Teslas parked here than BMWs. Considering the number of years that BMW has been selling cars, that' s pretty amazing. In all fairness, I should mention that the Tesla factory is just a few miles up the road, so I live in prime territory for Tesla.

    • Re:Speculation... (Score:5, Insightful)

      by Anonymous Coward on Wednesday June 18, 2014 @11:07PM (#47269055)

      I have heard Elon Musk speak on this. His basic proposition is that he has never had a positive dealership experience and he has rarely met anyone that has had a positive dealership experience.

      It is a fairly compelling argument.

      • I have boughten a total of 3 cars in my life. First was a brand new car and the salesman was your typical slimeball. 2nd car was from a used car salesman fairly slimy. Third guy was fantastic. But he wasn't a salesman, he was more of a general manager. I only got to him by word of mouth. But I was in and out of the dealership in less than 45 minutes and saved a bunch of money

      • by torkus (1133985)

        How dare he spend time and effort and money to resolve a problem he's personally experienced?

        I'm sure there are millions of customers satisfied by their experiences at dealerships. They did just fine so it's clearly just him having an unreasonable expectation. maybe it's a childhood trauma manifesting itself and causing him not to properly appreciate the dealerships. It's totally unreasonable - and obviously should be explicitly illegal - that Elon dare make a change to this. I mean...think of the child

    • Re: (Score:3, Insightful)

      Never buy from a man in a suit. A large portion of what you are paying for is the suit.

  • by Anonymous Coward on Wednesday June 18, 2014 @07:17PM (#47267679)

    There will always be a need for car dealerships, but there is no good reason to ban direct sales. This is pure rent-seeking behavior. The dealerships should position themselves as Tesla's partners in buying/selling used Teslas and in repairs.

    • by metac0rtex (3682733) on Wednesday June 18, 2014 @07:22PM (#47267725)
      They are only crying because this a market they don't have cornered. Actual competition is terrifying to "free market capitalists". NADA can fuck right off.
      • by Trailer Trash (60756) on Wednesday June 18, 2014 @08:55PM (#47268439) Homepage

        They are only crying because this a market they don't have cornered.

        Actual competition is terrifying to "free market capitalists".

        No it's not. It's terrifying to cronies who use crony capitalism to keep a grip on their markets through government "regulation".

    • by nospam007 (722110) * on Wednesday June 18, 2014 @07:37PM (#47267879)

      "There will always be a need for car dealerships,..."

      Yes, because we just love to give cuts to as many people as possible for our purchases.

      I remember fondly the days when we couldn't buy computers, hairdryers, video recorders and even luggage containers in a supermarket, because those needed 'special' vendors with 'secret' knowledge.

      • by epine (68316) on Wednesday June 18, 2014 @08:06PM (#47268101)

        "There will always be a need for car dealerships,..."

        But everyone knows what that conveys, even the dealers themselves:

        We've been printing money for a long time by bilking our customers for costly extras, and even though they often know this and resent it deeply, until now there hasn't been a credible alternative, so they just squeal to silently to themselves, then come back for more. With recent developments, that's going to change real darn fast if we don't (A) somehow force the competition out of business, or (B) do a prompt about-face in our shifty business practices, or (C) both at the same time with the intent of achieving the first option ASAP.

        Of course, this divides ranks with the dealership community itself, as the old guys close to retirement are going to continuing milking their cash cow by any means available, as the younger guys start to worry about their long term futures when the backlash strikes, which the old guys are doing nothing whatsoever to abate sooner rather than later.

        They say that society is "only" three square meals from anarchy. That's a lot, actually. I estimate that the fraternal order of the car dealership is only two snifters of brandy and one Cuban cigar's worth of suggested forbearance away from king-sized flop house crossfire.

      • If anything, given the rather limited distribution of spare parts, maintenance expertise, and the like, Tesla is actually the outfit where the 'dealer' would largely be the holder of the secret knowledge. They've just made the decision that the 'dealer' is always going to be a direct extension of their customer service apparatus, rather than an independent operator.

        From my (admittedly quick and unscientific) sampling of the owner forums, stories involving technical trouble almost always end with some Tes
      • by Tom (822)

        I remember fondly the days when we couldn't buy computers, hairdryers, video recorders and even luggage containers in a supermarket, because those needed 'special' vendors with 'secret' knowledge.

        As a matter of fact, yes I do fondly remember my first computer dealer because they actually knew shit and helped me put together as well as upgrade several of my first PCs. I spent a ton of my money there and didn't regret one cent of it.

        Dealers absolutely can add value to the system. It's just that most don't, and sadly too many consumers shoot for the cheapest price so aggressively that good dealers go out of business and the scum survives, and it's getting ridiculous. Have you bought crap online recentl

    • by iggymanz (596061)

      no need at all for them.

      order your electric car online with drivers license and insurance policy number taken during checkout, delivery person drives to your home, takes video of you and them checking out the condition of everything, and then they take taxi or shuttle or whatever back to warehouse.

  • by suso (153703) * on Wednesday June 18, 2014 @07:21PM (#47267721) Homepage Journal

    Wow, local dealerships sound AWESOME!

  • by Anonymous Coward

    So far it seems that NADA has happen.

  • by sasparillascott (1267058) on Wednesday June 18, 2014 @07:25PM (#47267753)
    Not specifically Tesla, but electric cars don't have alot of things that car dealers make money with (oil changes, engine work, transmission work and on and on). Alot of dealerships make much of their profits from such things, so what Tesla represents is scary change - of course that change is coming whether driven by Tesla or someone else.

    So the dealers have alot of money, alot of friends and will do what they can to gum up the works for (or kill) Tesla and what it represents if they can. JMHO...
    • by fisted (2295862) on Wednesday June 18, 2014 @07:34PM (#47267851)
      a lot
    • "Not specifically Tesla, but electric cars don't have alot of things that car dealers make money"

      Electric cars need tires. Electric cars need brakes. Electric cars will have safety recalls. Electric cars can be in accidents. Electric cars can be broken into.

      I don't claim to know much about electric cars, but if it has moving parts it will be need to be serviced at some point.

      I don't think you thought your post through.
    • by FridayBob (619244)

      ...electric cars don't have alot of things that car dealers make money with ... . Alot of dealerships make much of their profits from such things, ... . So the dealers have alot of money, alot of friends ...

      Just between you and me, "alot" is not a word, although it could be a misspelling of the verb "allot". In this case, you mean "a lot" (two words), as in many. As for style, it may have been deliberate, but generally it's distracting when a word or phrase is needlessly repeated so often in just a few sentences, especially when there is so much else to choose from, e.g. "many", "plenty of", "large numbers of", "(is/are) flush with (cash)", "lots of", etc.

      But, now that you have my attention, I agree with y

  • by hsmith (818216) on Wednesday June 18, 2014 @07:25PM (#47267757)
    They are great, they protect the consumer, ensure fair prices, charge fair prices for repairs, ensure you don't get ripped off, the list goes on! Good for them, Tesla deserves a beat down for trying to get rid of these middle men.

    Oh, jk.
  • Benefits (Score:5, Funny)

    by Dega704 (1454673) on Wednesday June 18, 2014 @07:30PM (#47267809)
    They forgot to mention the free leg massages from leg-humping auto salesmen.
  • by DriedClexler (814907) on Wednesday June 18, 2014 @07:31PM (#47267823)

    Imagine being the marketing team that had to make car dealers seem like a good thing to have!

  • Cool science fiction opportunity here is that when we colonize Mars we get to have a Mars vs Earth civil war. My bet is on Mars winning. Time for a hollywood movie deal!!

    Another multiverse version of Elon Musk develops a slew of super-viruses under his manufacturing plants in a deep-core Earth super lab. His 2020-ish journey to Mars assembles a team of top candidates for population of Mars now that he has perfected his global terraforming technology. Musk detonates super-virus technology as soon as his crew

  • by AK Marc (707885)

    NADA mentions price competition, consumer safety, local economic benefits, and added value.

    Yes, the "added value" of $500 for a $2 3M spray on the seats, and $1500 for an underbody treatment that often isn't even applied.

    Yes, those dealers sure know how to extract value. I almost bought a Toyota once. But I couldn't get one that didn't have $5000 or more of unwanted markup for such scams. Gulf States Toyota Distributors should have been taken down for fraud and such. But NADA and others support such unethical and borderline illegal practices. And demonize Tesla.

  • Isn't price competition based on who has the lowest dealer markup?

    Doesn't eliminating the dealer franchise also eliminate dealer markup?

    Wouldn't we all be buying the same wholesale price?

    That being the case, how is price competition (in this case!) a good thing?

    • p>Wouldn't we all be buying the same wholesale price?

      No, we'd be buying at retail, so the price is by definition the retail price.

      As to whether it's the same price for everyone depends on whether the manufacturer wants to haggle like dealers do or go with a fixed price a la Saturn. A fixed price is more likely though. Otherwise you'd end up paying for what amounts to an in-house dealership employing the people who did the haggling.

      • by roc97007 (608802)

        Yes, in this case it would be retail, by definition. I think we're getting tied up in terminology. It's only called wholesale with other car companies because consumers can't buy from the company directly -- the purchase must be done from a middleman, at a brick and mortar store, with usually a pretty large number of employees. All that ultimately adds overhead costs plus dealer profit margin, which is why the car costs more than if you (could) buy it from the manufacturer.

        In the case of Tesla, you *are*

  • but I would love their business model to be used by all auto manufacturers.
  • PDF.js is being dog slow at rendering the PDF. So first I had a look at the article on The Car Connection. "Fiercely compete for your business" just means that Chevy, Ford, and the like have failed to compete with Tesla. "Create good-paying local jobs" sounds like a broken window fallacy [wikipedia.org]. "and significant tax revenue for local communities" is true whether or not the factory owns the dealer, as the local branch of a factory-owned dealer likewise pays property, income, and sales tax. "If automakers themselve

  • Buying a car (Score:5, Interesting)

    by MpVpRb (1423381) on Wednesday June 18, 2014 @07:53PM (#47268003)

    ..in the traditional sales system is not a thing that most people enjoy

    Some people falsely believe they are "players" but they still get screwed

    Most people are "sheep" and they get screwed faster and harder

    I am not a master negotiator..I just want a car at a fair price

    I always feel like a lamb in a roomful of tigers when I deal with a traditional car dealer

    I'm a really good engineer, and I have many other talents..but cutthroat negotiation is not one of them

    I really, really want a better system

  • Won't there still be a need for dealers, and aren't all the video's arguments still valid, for used cars?

  • by Eravnrekaree (467752) on Wednesday June 18, 2014 @10:22PM (#47268893)

    Most things are not sold directly by the manufacturer but by retailers. The variety of things that can be bought is too large to have a seperate store for each manufacturer out there, its nice to have product catagories in one place. With smaller objects of lower value, it seems this is strongly preferred. Cars are a very large, expensive item so there is more of a tendancy to have stores that specialize in just them. This sort of reduces the natural retailer/manufacturer seperation.

    The fact is dealers do provide added value, however. The value comes from of course, the lot, of being able to actually see a car before you buy it. The cost of running this will be there whether the manufacturer runs the lot, or whether an independent dealer does. The market does operate to regulate prices for dealers, since its a part of the car price, it can be argued that having independent dealers may give people more choice regarding who has a more efficient lot operation.

    Many aspects of the dealership people find unpleasant will still be there with a manufacturer run dealership. One of them is the credit checks for the loans. Bargaining is not necessarily exclusive to independent dealers but could also occur at a manufacturer dealer. A lot of the qualities of the independent dealer will still be there with a manufacturer dealer, therefore. Since you have no choice of dealers to work with, it could even be worse.

    Maybe people should have the option of a direct buy from a manufacturer, but, a manufacturer locking out independant dealers from providing an alternative is also not a great idea. The vertical integration could be anti-competive and lead to overly monopolistic qualities.

  • by DrXym (126579) on Thursday June 19, 2014 @08:17AM (#47270707)
    People hate car dealers for a reason. They are generally deceitful, money grubbing scum who conjure all kind of fees and charges, who "negotiate" merely to upsell customers with expensive upgrades, financing and insurance policies. And then when the car needs to be serviced they'll rape the customer again for the time & parts.

    That isn't to say Tesla will solve all these problems (I'd be especially worried about the cost of servicing what's essentially a computer on wheels), but at least they charge a price and you know what you're getting. No negotiations. No oily salesman pitching stuff you don't need.

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