2022MembershipDirectory_FNLdigital

2022 MEMBERSHIP DIRECTORY + SERVICES GUIDE

FRANCHISE ISSUES

DEALERSHIP ALLOCATION CONCERNS Due to the shortage of key vehicle components such as the micro- chips needed to manufacturer vehicles, resulting from the COVID-19 pandemic, some OEMs plan to continue to limit the supply of new vehicles to dealers. This new allocation plan can be a problem for dealers if a dealership does not receive an equal proportion of each model of new motor vehicles produced. If the manufacturer sets aside its discretionary allocation improperly it could be a disadvantage to you. It is critical for dealers to institute a regular practice of sending written communication to the OEM documenting any allocation shortcomings and requesting that the lack of inventory for each model and trim-line be addressed.

Below are some pointers to keep in mind when addressing allocation problems with a written letter to the OEM: It Doesn’t Hurt to Ask Dealers should send regular communications to their OEM any time you feel there is an allocation failure even if you feel it will fall on deaf ears and won’t effectuate any actual change. Of course, this can often be the case. However, there are certainly dealers who receive vehicles from the OEM’s discretionary pool of vehicles simply because they asked. Written Letters Create a Record Documenting Allocation Failures One frustration voiced by dealers when they are getting little to no inventory is that they still continue to get OEMmessages asserting sales performance shortcomings. A regularly sent letter from you addressing allocation failures has the benefit of creating a record documenting the OEMs actions and your objections. A dealer who receives a deficiency notice or notice of termination from their OEM based on sales performance is much better positioned to defend against this claim if they have a well-documented record of the OEM’s allocation failures.

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