In early October, the California New Car Dealers Association’s (CNCDA) 2023 Franchise Bill (AB 473) was signed into law, strengthening dealership rights in the state. Brian Maas, the President of the California New Car Dealers Association, is joining us on the latest Inside Automotive episode to determine what this means for dealers.
The California New Car Dealers Association works to advance and safeguard franchised dealers’ interests across the state. The purpose of franchise laws is to give potential franchise buyers the essential information they need to assess the advantages and disadvantages of making such an investment.
1. While putting together their AB 473 package, the CNCDA discovered a possible threat for dealers facing competition not only from Tesla, Lucid, or Rivian but also from their own business partners by selecting specific brands and models and selling directly to consumers.
2. The CNCDA drafted a centralized provision in its bill stating that manufacturers are not allowed to compete on sales or services with their own franchisees.
3. Previously, Californian regulations emphasized that manufacturers could not compete with dealers who carried the same brand or catered to the same market. However, bill AB 473, which was unanimously approved by lawmakers, replaces these rules with tighter restrictions and closing the loophole.
4. “Florida also updated their franchise law, and the net was the same,” Maas observed. He says, “You have two of the largest states in the nation that have made it obvious to OEMs like VW, Scout, Honda, Sony, and others to compete with their franchises.”
5. The California measure adds some justice to charging platforms imposed by manufacturers. For example, manufacturers that oppose a public DC fast-charging mandate must equally share the associated costs with the dealer 50/50.
“This bill puts a dent in VW Scouts' push to electrify SUVs and trucks by 2026, but the bill doesn't take effect until January 1, 2024.” – Brian Maas