Nissan dealers helped by Chevrolet vehicle assembly plant to keep its franchise

Article by Christian Andrei, on August 30, 2012

Ohio’s Franklin County Court of Common Pleas favored a Nissan dealer in its ruling that a Chevrolet vehicle assembly plant near the dealership is adversely affecting how it performs. The Ohio court’s ruling could set a precedence for other auto dealerships found in distinctly challenging markets. It brings to light a legal dilemma regarding the plant’s practice of comparing how auto dealerships in dissimilar markets perform.

The issue raised by Nissan dealer Bill Sims, whose showroom is in Warren, Ohio, is not against General Motors but rather, it is with Nissan North America, which tried to terminate his franchise after naming his as the owner of the worst-performing Nissan store in the 13-state region.

Sims is a Buick-GMC dealer who had taken over the local Nissan store in 2001 after its former owner left. Nissan didn’t consider Sims’ point that GM’s nearby Lordstown assembly plant, had to be perceived as a challenge that restricts his Nissan market penetration. The plant’s 4,500 workers currently assemble the Chevrolet Cruze. It also built the Chevy Cobalt and Cavalier for several years in the past.

Sims got warnings from Nissan for his failure to meet factory performance standards. Nissan then decided to terminate his franchise in 2009. Sims complained to the Ohio Motor Vehicle Dealers Board that it was not fair to compare his results against the performance of Nissan dealers in markets that didn’t have a GM assembly plant.

Sims asserted that GM offers special vehicle discounts to Lordstown employees, their family members and friends, and thousands of GM retirees in the area. Chevrolet’s local market share is double the average recorded for the state. On the other hand, Toyota, Nissan and Honda’s sales are about half of the normal state average. [source: Automotive News - sub. required]

Topics: nissan, dealer, chevrolet

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