The Virginia state house recently passed legislation that aims to protect franchised dealers from automakers attempting to negotiate directly with consumers or declare dealers as delivery agents. The bill, which passed unanimously in both the House and Senate, prohibits automakers from negotiating binding sale or lease terms with customers, including online; retaining ownership of new vehicles until they’re sold rather than selling them to dealers to hold in inventory; and declaring that dealers are delivery agents. It also bars automakers from unilaterally changing franchise agreements without also getting an agreement from the dealer. The legislation was created in response to growing concerns among franchised dealers that legacy automakers may try to take steps towards an agency model or sell directly to consumers. Don Hall, CEO of the Virginia Automobile Dealers Association, said the bill language was amended to clarify some provisions at the request of GM and the Alliance for Automotive Innovation, the trade association that represents most major automakers in the U.S. He noted that the trade association does not oppose the legislation.
The Virginia state house’s recent legislation is a major step forward for franchised dealers in the state, as it ensures their ability to sell vehicles to consumers and prevents automakers from attempting to circumvent dealers. The bill language is some of the first in the country to reference growing concerns among franchised dealers that legacy automakers may try to take steps towards an agency model or sell directly to consumers. The legislation was created in response to the Ford Motor Company’s Model e program, which was rolled out last year and required dealers to invest up to $1.2 million on chargers and other equipment to sell the brand’s future EVs. It is intended to bar automakers from attempting certain practices that circumvent dealers, and to send the message that the franchise system will stay intact and that car dealers will have the option and the right to sell cars.
The Virginia state house’s legislation is a significant step forward for franchised dealers in the state, as it ensures their ability to sell vehicles to consumers and prevents automakers from attempting to circumvent dealers. It is also a reminder of the importance of protecting the franchise system and recognizing the value that franchised dealers bring to the automotive industry. The legislation is a clear indication that Virginia is committed to protecting the rights of franchised dealers and ensuring that they remain a vital part of the automotive industry. It is a reminder to automakers that the franchise system is the cornerstone of the automotive industry, and that any attempts to circumvent dealers will not be tolerated. It is also a reminder to dealers that their rights are protected and that they are an integral part of the automotive industry.
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