I'm not describing a zero-sum economy. It's possible that NJ suffers a net local loss, even if that's more than outweighed by a net benefit in NJ + CA. And even if NJ enjoys a net local benefit, you still have a bunch of people out of work in return for everyone paying slightly lower prices for cars. In a place like NJ, where unemployment is the #1, #2, and #3 concern, you can see why legislators would be gun-shy about getting rid of local protections in the name of economic idealism.
The standard arguments for free trade apply as much to individual states as to countries. Just as the US enjoys a net benefit from buying goods from China instead of making them, so does New Jersey enjoy a net gain from its residents buying California cars without any New Jersey middleman.
I'd probably suggest that if a direct-from-manufacturer store would open in NJ the people most likely to be able to find employment at such an establishment would be those who used to work at a dealership.
