GNYADA February 2016 Newsletter

NADA & Dealer Reps Defend Franchise System 9

The Federal Trade Commission (FTC) held a one-day public work- shop on January 19, 2016, to discuss and accept comments on various issues related to auto retailing. The workshop consisted of presenta- tions and discussions focusing on the following topics: the regulation of dealer location; laws relating to reim- bursement for warranty services; restrictions on manufacturers’ ability to engage in direct sales to con- sumers; and new developments affecting vehicle distribution, such as autonomous vehicles, connected cars, and the rise of subscription-based automobile sharing services. The workshop looked at how state laws and regulations governing car sales may affect consumers and com- petition and to what extent the need for those laws continues to exist. It also explored whether less restrictive alternatives to the current system might meet policy goals while pro- moting greater competition and inno- vation.

a balanced one. In particular, both the FTC speakers and the supposedly neutral economists the agency select- ed to speak brought preconceived attitudes to the discussion that were hostile to the franchise system. However, the dealer representatives — including GNYADA outside coun- sel, Richard Sox, Esq. of Bass Sox Mercer and ATAEs Jim Appleton (NJ) and Peter Welch (NADA) — were well prepared, presented well, and effectively rebutted the points made by the various manufacturer representatives and the economists and lawyers recruited by the FTC. After the day’s sessions ended, Peter Welch, president of the NADA issued a statement that read in part: “A lot of what we heard today was, in fact, an affirmation of the tremendous value to consumers that the independent, franchised dealer network provides. “Empirical research has demonstrated that intense competition among fran- chised dealers lowers new-car prices by hundreds of dollars. But the bene- fits to consumers don’t end there —

they extend to service, warranty work, recalls, and the hundreds of millions of dollars that’s invested in local communities.” Welch added, “The only question that wasn’t answered today is how con- sumer interests would be better served if the FTC, or another federal agency, were to upend the automobile retail sector.” The process now moves to the writ- ten comment stage. NADA will be preparing and submitting a compre- hensive set of comments. The prepa- ration will include working with ATAEs, as well as dealer lawyers, dealer accountants, and other third parties, to ensure that the record reflects the many instances of manu- facturer abuse and other factual and market realities that lead legislatures to enact these laws. The workshop can be viewed on the ftc.gov website: https://www.ftc.gov/news- events/events-calendar/2016/01/auto- distribution-current-issues-future- trends

As expected, the proceeding was not

Join NADA — Amplify Your Voice in D.C.

10

The National Automobile Dealers Association’s voice in the national arena can only be as strong as the number of dealers they represent. If you are not already an NADA mem- ber, join today to help the organiza- tion effectively lobby for your inter- ests in D.C. In 2015, NADA lead the charge to protect dealer assisted financing against CFPB overreach. They're also critical guardians of the franchise sys- tem, vigilantly contesting any pro-

posed federal regulations that would impede dealership business.

To inquire about joining, please contact Jennifer Berman at the Association, jen- nifer@gnyada.com, 718.746.5900 ext. 235, or the NADA membership line at 800.252.6232 ext. 2.

In addition to NADA’s lobbying work in D.C., membership benefits include:

Industry news alerts Access to management guides Discounts on convention registration Discounts on education and training In-dealership consulting

n

n

n

n

n

Greater New York Automobile Dealers Association • www.gnyada.com

The Newsletter • February 2016

6