Many of you likely recall the fiasco that started when Chrysler was found to be operating a franchise of its own in Los Angeles, California, not far from competing privately owned dealers.
The full ramifications of the ordeal aren’t yet known, although Chrysler has been forced to sell the dealership and racked up a hefty $955,000 fine, but now a report by Automotive News is telling an all too familiar story about that sees Volkswagen playing the role Chrysler did in the previous debacle.
This time around the situation involves Volkswagen’s plans to build a dealer just under nine miles away from an existing and competing Volkswagen dealership, owned by Gary Sherman. But unlike the Chrysler case, Sherman is hoping to stop this from ever getting to the point where VW even has a physical dealership to compete with his own.
So far, a California administrative law judge did not agree with Sherman, but the California New Motor Vehicle Board did, voting four votes to none in favor of recognizing Sherman’s complaint as valid. Because the board’s vote overrules the previous decision by the judge, things now stand still as Sherman waits to see if VW will appeal the decision.
It is worth pointing out the difference in this case verses the Chrysler case: VW is not looking to own and operate the new location, it is simply looking to add a new, competing location. By contrast, Chrysler itself had been operating its own dealer, something not looked upon favorably by California law.
VW has 45 days to file an appeal if it wishes to pursue the new location.
References
1.’Calif dealer…’ view
