An Arkansas Volkswagen dealership has sued the automaker’s American department for including a brand new location solely 15 miles away.
The Fayetteville dealership, named Crain Volkswagen, argues that the brand new location in Rogers encroaches on its territory. In its lawsuit, Crain claimed that the settlement it had signed with Volkswagen made it the only franchisee for the Washington and Benton counties. Nonetheless, when the German automaker initially approached the retailer to construct one other storefront, it refused to take action, and famous that stock was too sparse to produce one other outlet. A supervisor on the Rogers dealership, which is owned by Everett Automotive Group, advised a reporter for Arkansas Enterprise that gross sales had been “completely fantastic” because it opened in December of final yr.
Volkswagen’s attorneys have already requested for the case to be dismissed, and famous that the lawsuit didn’t cite which clause within the contract had been damaged. The Fayetteville dealership additionally appealed the Arkansas Motor Car Fee’s resolution to present a license to the brand new location.
Whereas its standing remains to be in limbo, the dispute over the brand new location highlights how tensions between auto retailers and producers have develop into more and more strained during the last decade. Many dealerships have expressed considerations that automakers are in search of to undermine the franchise system by promoting on to shoppers, convincing a number of states to ban direct sale fashions. Some have additionally challenged what they see as overly-restrictive insurance policies and guidelines sure manufacturers have in place for his or her franchisees, resembling Ford, which requires a substantial funding from retailers earlier than it would permit them to promote EVs. Avoiding future disputes would require transparency and open dialogue from each side of the business, however it’s unclear if producers are prepared to return to the desk.
Did you take pleasure in this text? Please share your ideas, feedback, or questions concerning this subject by connecting with us at newsroom@cbtnews.com.
You’ll want to comply with us on Fb, LinkedIn, and TikTok to remain updated.
Whilst you’re right here, don’t overlook to subscribe to our electronic mail e-newsletter for all the most recent auto business information from CBT Information.