This is not surprising, but the dealer is quite territorial. That’s one of the reasons franchise ownership can be a chaotic experience. It’s also one reason why you rarely see the same brand dealership in town, but perhaps a different town. Too close, and you’ll get into a fight, like a dealer suing Volkswagen over a newly licensed dealer, just 20 miles away, auto news report.
Crain Volkswagen of Fayetteville, Arkansas filed suit in December against Volkswagen Group of America, alleging that the recent licensing of Everett Volkswagen in Rogers, Arkansas, violated a franchise agreement with the company when the dealership “infringed upon its territory” and agent law of the state of Arkansas. But 20 miles is more than enough space between two dealerships in a place like Arkansas, right? According to Crain Volkswagen, it is not.
Crain is calling for VWs lack of market penetration in the US, says VW doesn’t have enough sales to support both dealers, makes two dealers within 20 miles of each other redundant, and makes it difficult for both dealers to survive. The words Automotive News:
The lawsuit also alleges that VW of the United States was unable to meet the “industry standard of 600,000 units per year to support its existing dealer network” and as a result may not be able to fully support and supply the vehicle. enough for both agents, a setback in the lawsuit. claim would violate state franchise laws.
The lawsuit also outlines Crain’s agency investments since it moved to its current location in 2017. Crain is seeking $5 million in damages.
VW is looking to get rid of the whole thing. According to the German automaker’s representative, Everett VW was legally incorporated in mid-2021 and has been properly licensed and approved through the Arkansas Motor Vehicle Commission — something Crain claims Volkswagen did not. do.
