The California New Car Dealers Association (CNCDA) has issued a cease-and-desist letter to American Honda Motor and Sony Honda Mobility of America (SHMA), demanding they immediately stop direct-to-consumer sales of Afeela brand vehicles in California. The association alleges the companies are violating state franchise laws by bypassing established Honda and Acura dealerships.
According to CNCDA, SHMA, and American Honda, are marketing Afeela vehicles and collecting deposits directly from California residents without involving their franchised dealer network—an act prohibited under California Vehicle Code Section 11713.3(o). The statute bars automakers and their affiliates from competing with their franchisees through direct sales.
“California law is crystal clear,” said CNCDA President Brian Maas, in the company’s press release. “Sony Honda’s rollout of selling Afeela vehicles directly to consumers is an unlawful effort to circumvent the state’s protections for franchisees, and we are fully prepared to take legal action to defend our Honda and Acura dealer members.”
SHMA and American Honda, both owned by Honda Motor, will assemble the Afeela vehicles at Honda’s facility in Ohio, alongside Honda and Acura models. Despite their involvement in opposing Assembly Bill 473, which went into effect on January 1, 2024, CNCDA says the companies are now in direct violation of it. The bill, backed by CNCDA and signed into law by Governor Gavin Newsom, reinforced prohibitions against manufacturers selling directly to consumers through affiliates.
This enforcement action follows a similar complaint filed by CNCDA against Volkswagen and Scout Motors earlier this year, accusing them of the same unlawful direct sales practices. That case includes claims of unfair competition and false advertising, with potential civil penalties exceeding $35 million.
CNCDA said it is fully prepared to take legal action against American Honda and SHMA if they do not immediately stop directly marketing and selling Afeela vehicles to California residents.
