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Dealership Allocation Issues Continued...

Written Letters Should Address Specific Vehicle Needs for Your Market Regularly sent letters addressing allocation also have the benefit of highlighting specific product needs relevant to a dealer’s unique market. A well-prepared letter should specifically describe the models and trim-lines for which the dealer has unmet consumer demand and request additional allocation of these vehicles. OEMs will often point to a dealers’ rejection during the ordering process of vehicles that simply will not sell in a dealer’s market as evidence that the OEM has been sufficiently supplying product. A letter specifically describing the unique market circumstances making allocation of certain models and trim-lines imperative will cut against this OEM sleight of hand. New York Law Governs Vehicle Allocation Letters to your OEM should include reference to section 463(2)(jj), Article 17-a New York Vehicle and Traffic Law which prohibits a manufacturer from utilizing a discriminatory, unreasonable, arbitrary or unfair system of allocation of newmotor vehicle inventory. Likewise, pursuant to section 463(2)(kk) dealers have a right to request details from the manufacturer as to the distribution of vehicles to all same brand dealers within the State. This is a powerful tool in holding the manufacturer accountable to a fair distribution of vehicles to all same brand dealers. In conclusion, dealers should make a habit of regularly writing their OEM to address allocation failures, request specific product moving forward, and request supplemental allocation from discretionary pools. This practice serves the dealership both in maximizing the number of vehicles the dealership is allocated and in creating a written record of allocation concerns if the OEM ever attempts to conveniently “forget”its prior allocation failures.

GNYADA thanks Richard Sox, Esq., Partner, Bass Sox Mercer for contributing this article. Contact Richard at rsox@dealerlawyer.com.

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