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will ohio dealers association be able to stop tesla ???

By Dan Gearino

A trade group for Ohio car dealers is asking a Franklin County court to rescind Tesla Motors’ license to sell new cars, citing what they say are violations of Ohio law.

The plaintiffs in the case also include several central Ohio dealer groups, such as Midwestern Auto Group of Dublin, Ricart Automotive of Groveport and several of the Germain family dealerships.

“If a license is not granted with proper authority, then that license should be rescinded,” said Sara Bruce, vice president of legal affairs for the Ohio Automobile Dealers Association.

The defendants are the Ohio Department of Public Safety, the Ohio Bureau of Motor Vehicles and Tesla.

In the suit, which was filed in Franklin County Common Pleas Court, the dealers say that the state agencies improperly approved Tesla’s dealer license earlier this year because the company did not provide a copy of its contract with the manufacturer of the vehicles to be sold.

In this case, the manufacturer and the retailer are the same company, but the dealers say that the law still calls for proper documentation.

Even if Tesla had provided a contract, it would not have been valid because the law requires such an agreement to be between “two separate contracting parties,” Bruce said.

Tesla did not immediately reply to a request for comment.

Earlier this month, Tesla opened a store at Easton, the automaker’s first retail outlet in Ohio.

Also this month, the auto dealers association made an unsuccessful attempt to get the Ohio General Assembly to outlaw Tesla’s business model.

The lawsuit is the next step in the dealers’ attempt to stop Tesla from gaining a foothold in the state.

Unlike most auto brands, Tesla sells its all-electric cars directly to consumers through company-owned stores.

This is different from the way established auto brands sell their products. Companies such as Ford, General Motors and Honda sell through a network of independently owned dealers.

Established dealers have raised concerns that Tesla’s model is opening the door for other automakers to open company-owned stores, which they say would undermine the concept of an independent dealer network.

The dealers say they are trying to preserve a system that employs 50,000 Ohioans, while Tesla says the dealers are monopolists who are wary of real competition.

Tesla has faced similar legislative and legal battles in other states.

dgearino@dispatch.com

fair market value pricing label now required

AB 1534 (Wieckowski)

Vehicles: dealers: used vehicle sales: labeling requirements.

Existing law regulates the accuracy of information provided to consumers during vehicle sales, including the information contained in advertising, brochures, and manuals, as specified.

Existing law also requires manufacturers, as specified, to disclose certain information regarding a vehicles engine, as specified, by affixing a label on the vehicle. A violation of these provisions is an infraction.

This bill requires a licensed dealer, as defined, to affix to and to prominently and conspicuously display a label on any used vehicle offered for retail sale that states the reasonable market value of the vehicle.

The bill requires the label to contain specified information used to determine the vehicles reasonable market value and the date the value was determined.

The bill requires a licensed dealer to provide to a prospective buyer of the used vehicle a copy of any information obtained from a nationally recognized pricing guide that the licensed dealer used to determine the reasonable market value of the vehicle.

The bill requires the label to meet all the following conditions:

 

a)   Be in writing with a heading that reads “REASONABLE

MARKET VALUE OF THIS VEHICLE” in at least 16-point bold

type and text in at least 12-point type.

 

b)   Be located adjacent to the window sticker identifying

the equipment provided with the vehicle, or if none,

located prominently and conspicuously on the vehicle.

 

c)   Contain the information used to determine the reasonable

market value, including, but not limited to, use of a

nationally recognized pricing guide for used vehicles, and

the date the reasonable market value was determined.

 

d)   Indicate that the reasonable market value is being

provided only for comparison shopping and is not the retail

sale price or the advertised price of the vehicle.

 

The bill defines “nationally recognized pricing guide” as including,

but not limited to, the Kelley Blue Book, Edmunds, the Black

Book, or the National Automobile Dealers’ Association (NADA)

Guide.

 

 

 

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The car dealer license process requires LiveScan Fingerprints

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Dmv 8016 LiveScan form:  http://dmv.ca.gov/forms/ol/dmv8016.pdf

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Established Place of Business: Posting

11709.  (a) A dealer’s established place of business, and other sites or locations as may be operated and maintained by the dealer in conjunction with his or her established place of business, shall have posted, in a place conspicuous to the public in each and every location, the license, or a true and exact copy of the license, issued by the department to the dealer and to each salesperson employed by the dealer and shall have erected or posted thereon signs or devices providing information relating to the dealer’s name and the location and address of the dealer’s established place of business to enable any person doing business with the dealer to identify him or her properly. A sign erected or posted pursuant to this subdivision, on an established place of business, shall have an area of not less than two square feet per side displayed and shall contain lettering of sufficient size to enable the sign to be read from a distance of at least 50 feet. This section shall not apply to a dealer who is a wholesaler involved for profit only in the sale of vehicles between licensed dealers.

(b) Notwithstanding Section 11704 and this section, a dealer may display vehicles at a fair, exposition, or similar exhibit without securing a branch license, if no actual sales are made at those events and the display does not exceed 30 days.

(c) A vehicle displayed displayed pursuant to subdivision (b) or (e) shall be identified by a sign or device providing information relating to the dealer’s name and the location and address of the dealer’s established place of business.

(d) This section shall not be applicable to a dealer who deals only in off-highway vehicles subject to identification, as defined in Section 38012.

(e) Notwithstanding Section 11704 and this section, a vessel dealer may display a trailer and may sell a trailer in conjunction with the sale of a vessel at a fair, exposition, or similar exhibit without securing a branch license if the display does not exceed 30 days.

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tesla seeking to break new ground for car sales nationwide

Automaker Tesla looks to bypass car dealers

The Tesla showroom at the Natick Mall has an electric car on display.

WENDY MAEDA/GLOBE STAFF

The Tesla showroom at the Natick Mall has an electric car on display.

Across from the Victoria’s Secret at the upscale Natick Mall is the kind of stylish storefront where you would expect to buy designer jeans, boutique jewelry, and chic accessories.

But the expensive bauble on sale in this storefront is a car — the super-sleek, super-fast Tesla electric vehicle. And the Natick outpost may just be the car showroom of the future, as Tesla plans to soon introduce a midpriced model intended to broaden its appeal among car buyers.

That is, if Tesla wins its pitched battle with Massachusetts auto dealers over the right to sell its vehicles directly to the public from a comfy store, or over the Internet, rather than through a traditional car dealership, as usually required.

On Tuesday, the fight landed the two sides before the state Legislature, where Tesla and local auto dealers, through their state association, asked lawmakers to legislate the terms of car buying in Massachusetts in their respective favors.

The hearing Tuesday on Beacon Hill featured polar policies: one bill that would expressly outlaw Tesla’s direct-to-consumer sales model, and another that would legalize it.

“It really comes down to consumer choice,” said Natick state Representative David Linsky, who is sponsoring the pro-Tesla bill. “What delivers the best deal, the best service for the consumer? Let’s let the market determine it.”

Elon Musk is chief executive of Tesla, which is fighting battles in other states that have franchise laws like the one in Massachusetts.

PAUL SAKUMA/ASSOCIATED PRESS

Elon Musk is chief executive of Tesla, which is fighting battles in other states that have franchise laws like the one in Massachusetts.

The outcome of the case could help shape how consumers go about buying cars, holding out the prospect that it someday may be as easy as, say, going to the Apple store to order a new laptop.

The dealer franchise law was adopted to protect local car sellers from undue pressure from the major automakers by, for example, preventing manufacturers from opening their own nearby car lots and underselling their own dealers.

Robert F. O’Koniewski, executive vice president of the Massachusetts State Auto Dealers Association, said the law protects consumers because it encourages car sellers to compete with each other; allowing a carmaker to act as its own dealer would eliminate the dynamic of competition within the brand.

And all Tesla has to do, O’Koniewski said, is join the crowd and sell its cars through the independent dealer system.

“This has nothing to do with trying to prevent them from doing business in the Commonwealth,” O’Koniewski said. “It has everything to do with following the law, like the other 412 dealers have to do and the other 25 manufacturers have to do.”

But Tesla counters that independently owned dealers are in effect exerting a monopoly on car sales in Massachusetts. James C. Chen, the company’s vice president of regulatory affairs, told lawmakers Tuesday that Tesla might shift to a franchised dealership model in the future, but for now the 10-year-old company only makes 21,000 cars per year — not nearly enough to support a network of dealerships selling Teslas exclusively.

That means a dealer would have to sell Teslas alongside gas-powered vehicles, which sets up a conflict of interest, Chen argued.

“There is a financial disincentive for them to sell electric vehicles, versus their internal combustion engine vehicles,” he said. “To tout the benefits of an electric car would naturally denigrate the incumbent technology.”

This is the second major debate in the past year in Massachusetts about competition in the auto industry. The “right to repair” battle pitted auto manufacturers against independent mechanics over access to diagnostic and repair information, which now must be made available through a universal system by 2018. Proponents argued it was unfair for carmakers to monopolize that information and force consumers to bring their vehicles to auto dealers, where manufacturers would receive a slice of the repair bill.

Tesla, meanwhile, is fighting similar battles in many other states that have franchise laws like the one in Massachusetts. The company is also dealing with a troublesome setback, as federal safety inspectors on Tuesday launched an investigation into whether Tesla’s Model S electric car is vulnerable to fires because roadway debris can pierce the car’s underbody and battery — igniting fires in two Model S cars recently.

The lower-powered Tesla begins at around $70,000 and can top $120,000 with a larger battery and the kind of luxury amenities found in cars made by Jaguar and BMW.

Despite its price tag, the Tesla Model S has wowed car aficionados and industry reviewers with its super-fast performance, super-sleek design, and high-tech interior. No less a gimlet eye than Consumer Reports earlier this year gave the Model S a near-perfect rating — 99 out of 100 — and described the car’s performance as “a silent yet potent surge of power that will make many sports cars weep with envy.”

The higher-powered version can travel about 265 miles on a single charge and recovers about 30 miles for every hour of charging with a traditional plug.

Supercharging stations, which Tesla is building at highway rest stops across the country — with two in Connecticut — can provide a simple repower in less than an hour.

The company plans within the next few years to unveil a more affordable car that it expects will start at about $35,000, though a firm release date has not been set. More immediately, Tesla will again try to push the futuristic envelope with its Model X SUV, scheduled for next year at a similar price as the Model S. The Model X will feature “falcon wing” doors that open vertically.

The Tesla’s performance is one of the reasons Hingham resident Laura Burns bought the Model S. But she said the best part was the direct-buying experience.

“There may be people who like to haggle with dealers, but I don’t know any,” she said. “Most people hate it. The experience was night and day.”

Callum Borchers can be reached at callum.borchers@globe.com. Follow him on Twitter @callumborchers.

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