Automotive News reported last month (here) that states in the USA are strengthening laws to protect dealers. The story focuses on the cost to a Mercedes-Benz dealer of complying with the manufacturer's specification for the premises from which the dealership runs - and the dealer principal's fear that not making the huge investment will mean that he will miss out on bonuses.
How can the law protect dealers? Well, for example in Virginia the law restricts the manufacturer from requiring dealers to remodel until ten years has elapsed since the last remodelling. There are probably some fine points of definition involved in that, but the principal seems good. Moreover, dealers have the right to source the materials for the remodelling from local businesses - they aren't obliged to go to the suppliers the manufacturer nominates. Other states have similar laws: in Colorado, a dealer who's spent $250,000 doing what the manufacturer wanted can't be required to remodel for seven years.
The state of the economy doesn't seem to be stopping manufacturers from insisting on substantial investments from dealers - in the States, or in Europe. Which makes it all the stranger that state legislatures on the other side of the Atlantic are tightening their laws while over here legal protection is being removed.
How can the law protect dealers? Well, for example in Virginia the law restricts the manufacturer from requiring dealers to remodel until ten years has elapsed since the last remodelling. There are probably some fine points of definition involved in that, but the principal seems good. Moreover, dealers have the right to source the materials for the remodelling from local businesses - they aren't obliged to go to the suppliers the manufacturer nominates. Other states have similar laws: in Colorado, a dealer who's spent $250,000 doing what the manufacturer wanted can't be required to remodel for seven years.
The state of the economy doesn't seem to be stopping manufacturers from insisting on substantial investments from dealers - in the States, or in Europe. Which makes it all the stranger that state legislatures on the other side of the Atlantic are tightening their laws while over here legal protection is being removed.
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