A contentious lawsuit could help shape the future…
A $300 million dollar lawsuit filed by The Collection, a Miami-area dealership, against Porsche is raising some eyebrows. It’s also exposing what some allege is serious abuse at the hands of certain automakers as they try to exercise more control over dealerships.
Learn about the $1.7 billion lawsuit Ford recently lost here.
It’s alleged by The Collection that Porsche has tried forcing it into building a standalone dealership just for Porsche models. Currently, The Collection sells several premium brands under one roof in 350,000 square feet of retail space, not an unusual arrangement since quite a few six-digit vehicles are quite the niche offerings.
At the center of the legal argument is Florida franchise law which apparently prevent any automaker from requiring a dealership to accommodate demands for an exclusive facility. In other words, what The Collection alleges Porsche was pushing it to do violated state statute.
According to a report from Automotive News, the locations where Porsche wanted The Collection to establish a stand-alone Porsche dealership was far south of the dealer’s facility. In the court filing, the dealer says the areas are “remote, suburban locations” which would present “relatively zero market for Porsches” due to the local demographics. For those reasons, The Collection decided to not comply with the requests.
In response to the pushback, The Collection claims Porsche withheld its pool-car allocations from the dealership. However, Porsche claims pool cars constitute no more than 20 percent of inventory at a dealership and are 100 percent discretionary, so its decisions there weren’t discriminatory but instead reflect how it “rewards dealers.”
From there, it’s the dealership and automaker hurling accusations at each other about who’s being fair and who wants the other party to do what. Porsche ultimately seems to think it’s no fair for The Collection to have a different arrangement than other dealers and The Collection believes it’s being illegally punished, as laid out in Florida state law.
Ultimately, this is an interesting case which could have huge implications for how dealerships operate for some time. It might not be solved for some time, as these types of lawsuits can drag on for years, but we’ll definitely be keeping tabs on the ultimate outcome.
Source: Automotive News
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