GNYADA March 2017 Newsletter

New Maserati/Fiat/Alfa Romeo Dealer Agreements Stir Controversy

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In a recent opinion article featured on nyslant.com , Manhattan Borough President Gale Brewer stated her position that New York State – and New York City in particular – must welcome the testing of self-driving technology and autonomous vehicles on its streets. The primary reason why New York’s roads are currently ineligible for such tests is because it is the only state that legally requires drivers to have at least one hand on the wheel while the vehicle is in motion. Brewer believes In December, 2016, FCA issued pro- posed new Dealer Agreements to its Maserati, FIAT and Alfa Romeo deal- ers. The proposed agreements are vir- tually identical for each of the brands, and contain new provisions which are extremely onerous. Thanks to provisions in New York's Franchise Law, dealers in this state may be able to push back against these proposed new agreements. Dealers can protest any modification to their franchise which is adverse and substantially alters the rights, obligations, investment or returns on investment of the dealer. Any such protest must be made within 120 days of receipt of notice of the proposed modification. Some of the provisions of the pro- posed agreements are as follows: Sales of Through Non-Dealers – The manufacturer would have the right to sell and distribute its products

that this safe-driving law, nearly five decades old, is now ironically pre- venting the testing of potentially life- saving traffic safety technology. She further adds that the uniqueness of New York City’s streets — packed with pedestrians, cars, buses, bicy- cles, sanitation vehicles, and more — make it especially important for self- driving and vehicle autonomy tests to take place here. She asks, how will driverless systems ultimately learn how to navigate these conditions unless we do so? through any channel of distribution, including entities that are not author- ized dealers. Dealer’s Obligations – The pro- posed Agreement requires dealers to establish and maintain exclusive brand facilities. Management of Dealership – The proposed Agreement states that the Dealer Principal “shall devote full time efforts to [the brand’s] opera- tions, including his or her physical presence at the approved location and facility during normal operating hours, and active, substantial and continuing personal participation in the management of dealer’s Maserati operations.” Parts and Accessories Inventory – The Agreement states that the manu- facturer is permitted to set parts inventory levels for the dealer. Motor Vehicle Addendum – The

Motor Vehicle Addendum addresses all current product offerings in the United States. However, any future electric vehicles or hybrid electric vehicles are excluded from the list of available vehicles. Software License, Data Exchange and Electronic Commerce Agreement – Dealers would be required to grant the manufacturer (and its vendors) full and unfettered access to dealership DMS systems. Maserati, FIAT and Alfa Romeo deal- ers in receipt of the proposed new Dealer Agreement should review all provisions and determine which may adversely impact their franchise. Dealers who wish to take advantage of their right to protest are advised to contact motor vehicle legal counsel. The Association thanks Richard Sox, Esq. at Bass Sox Mercer for provid- ing this article.

11 Steering toward Embracing Autonomy Manhattan Borough President challenges “one-hand-on-the-wheel” requirement

In a likeminded effort to get New York State up-to-speed with modern driving technology, some state legis- lators are pushing to change the “one- hand-on-the-wheel” requirement. With driverless technology a key theme of the upcoming New York International Auto Show, the Association will be watching closely as this conversation unfolds, and will keep members informed about devel- opments.

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

The Newsletter • March 2017

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