A big part of this that I don’t see from an initial skim:

Prior to the current model the manufacturers kept their dealers on a short leash that they yanked hard and often. They’d force the dealerships to buy cars that wouldn’t sell, make them run promotions and advertising, and squeezed them as hard as they could.

And then if a dealership didn’t want to play ball the manufacturer could open up a competitor across the street and promptly bankrupt the original dealer so they could replace them with a more compliant owner.

For a dealership there was a massive power imbalance, as they’d put up a mid sized fortune to finance and open the dealership so had a huge amount riding on staying in business.

Eventually dealerships lobbies their state governments and got a series of laws passed that were intended to rein in the worst of the abuses - restrictions on proximity where the manufacturers could open up competing dealerships for the same makes, along with a legislated power rebalancing.

These days the model may seem unnecessary, but I can see why the dealerships are extremely wary of any efforts to skirt around laws that were put in mostly due to immense shitheadeddness of the manufacturers.