Pub. 11 2012-2013 Issue 3

N E W J E R S E Y C O A L I T I O N O F A U T O M O T I V E R E T A I L E R S F A L L 2 0 1 2 4 new jersey auto retailer Chairman’s MESSAGE | BY MARK PELLEGRINO The New Jersey Franchise Practices Act is one of the strongest, if not THE strongest, franchise law in the nation. NJ CAR is constantly evaluating the statute to ensure it meets the ever-changing needs of the retail automotive marketplace and the increasingly complex relationship between dealership and manufacturer. In fact, just last year, NJ CAR lobbied for an extensive set of amendments to the law that addressed stair step and facilities programs, as well as a whole host of amendments to strengthen the law. While New Jersey dealers enjoy extensive protection under the law, some of these protections cut both ways. Sometimes, these tough provisions in the law can be turned against dealers. While most dealers are in agreement that stair-step and two-tier pricing incentives are unfair, many manufacturers continue to rely on such programs to drive sales. New Jersey has enacted strict new prohibitions against these kinds of programs. Many automakers, however, simply ignore the prohibi- tion or comply with it in New Jersey but continue the practice in neigh- boring states, like New York and Pennsylvania, which do not have the same legal protections for dealers. This leaves some New Jersey dealers at a com- petitive disadvantage. Border dealers are caught between a rock and a hard place; they enjoy the protection of New Jersey law, but see that law turned against them by manufacturer incentive programs that provide money to com- peting dealers in neighboring States. So far, this issue has come up with Honda, Toyota and Land Rover, but there is no doubt that other manufacturers may also exploit this protection in the future. NJ CAR is committed to the law we’ve been working on for decades, but the Coalition also remains vigilant in its efforts to ensure the spirit of the law is not twisted to punish dealers in the process. To that end, the NJ CAR Executive Committee will be re-establishing the Franchise Practices Act Committee, which will look at areas of the current Franchise Practices Act to determine what is and isn’t working and to determine if further amendments are needed. We will also pull together various line-makes of deal- ers to address manufacturer-specific issues regarding their pro- grams that may create an un-even playing field for dealers. Be Careful What You Ask For…