The group’s CEO, John Bozzella, mentioned in a press release offered to Automotive News that he is “never seen this many bad state bills” earlier than. He cited efforts by leaders of state and regional seller associations to push a flurry of laws that he claimed would “add a lot of extra costs to the system and, in some cases, ban the innovations that would improve a customer’s buying and ownership experience.”
“That’s not a recipe for a strong franchise system in the long term,” Bozzella mentioned within the assertion. “OEMs and dealers rely on one another to deliver and service great cars and trucks across the country. We ought to be in the same boat rowing together to update the system, but that’s evidently not a view shared by all.”
Tensions over the way forward for the franchise system have been constructing for years, partly prompted by the rise of Tesla and its direct-to-consumer gross sales mannequin that has been emulated by different startup electrical car producers, resembling Rivian.
Dealers’ issues have been influenced by the pandemic’s acceleration of on-line gross sales and the expansion in reservations and car orders ensuing from a scarcity of semiconductors that curtailed new-vehicle manufacturing. At the identical time, conventional automakers have rolled out extra EVs and — in some circumstances — new gross sales fashions to accompany them.
But the benefits franchised dealerships have gleaned throughout the provide scarcity have newer rivals cautious of the legislative efforts.
“In recent years, franchised new car dealers have benefited from supply chain disruptions that have slowed car production. Dealers have reported record profits while buyers are commonly paying above sticker prices,” Rivian mentioned in a press release. “State legislators must be mindful of these market conditions and resist pressure to pass laws that further entrench dealer protections that block competition and ultimately harm consumers.”
Dealer affiliation leaders in a number of states say their goal is to forestall automakers from competing straight with franchised retailers, thus preserving sellers’ function within the gross sales mannequin — no matter kind it takes.
“The model is always changing. It’s been changing for 100 years,” mentioned Brian Maas, president of the California New Car Dealers Association and 2023 chairman of the Automotive Trade Association Executives.
“Dealers don’t sell cars the same way they sold them 25 years ago before the Internet. They’re not going to sell them the same way they sell them now 25 years from now,” Maas mentioned. “What we want to make sure is that dealers remain central as part of the retail experience for consumers because the franchise model is the best retail model.”
That might be achieved by passing new laws and implementing current legal guidelines, a number of seller advocates mentioned.
In Florida, for example, pending laws would give a motorcar seller affiliation standing to request that the state Department of Highway Safety and Motor Vehicles overview an automaker’s practices to find out whether or not they violate franchise legislation. Currently, solely particular person sellers are allowed to make such requests.
“Dealers are very reluctant to challenge any particular practice of the OEM for the obvious reasons — it’s their business partner. It’s the entity that supplies their vehicles and handles so much of their day-to-day life,” mentioned Ted Smith, president of the Florida Automobile Dealers Association, which advocated for the change in coordination with some dealership teams within the state.
With some previous issues, Smith mentioned he discovered no seller prepared to place his or her title on a problem, even after calling dozens of shops.
“That’s a very telling need being exhibited for having the association to be able to bring something,” he mentioned.
Source: www.autonews.com