This shouldn’t come as a shock, however dealerships are pretty territorial. It’s one of many causes dealership franchise possession could be a messy expertise. It’s additionally a motive why you hardly ever see the identical model seller on the town, however maybe a city over. Too shut, and also you’ll be in for a struggle, just like the seller suing Volkswagen over a brand new seller getting licensed, simply 20 miles away, Automotive News studies.
Crain Volkswagen of Fayetteville, Arkansas filed go well with in December towards Volkswagen Group of America, alleging that the current licensing of Everett Volkswagen in Rogers, Arkansas, violates its franchise settlement with the corporate because the seller “encroaches on its territory” and Arkansas state seller legal guidelines. But 20 miles must be greater than sufficient area between two dealerships in a spot like Arkansas, proper? Well, based on Crain Volkswagen, it’s not.
Crain is asking out VWs lack of market penetration right here within the U.S., saying VW lacks sufficient gross sales quantity to help each dealerships, making two sellers inside 20 miles of one another redundant, and problematic to each sellers surviving. From Automotive News:
The go well with additionally alleges that VW of America has been unable to attain “the industry standard of 600,000 units per year to support its existing dealer network” and because of this would seemingly not be adequately capable of help and provide each dealerships, a failure the criticism claims can be in violation of state franchise regulation.
The go well with additionally outlines Crain’s seller investments because it moved to its present location in 2017. Crain is in search of $5 million in damages.
VW is in search of to have the entire thing dismissed. According to representatives of the German automaker, Everett VW was rightfully established in mid-2021 and obtained correct licensing and approval by the Arkansas Motor Vehicle Commission—one thing Crain claims Volkswagen didn’t do.
Source: jalopnik.com