Every state in the union has its own laws regarding a manufacturer’s ability to sell cars, with some states banning the practice outright and others merely preventing OEMs from competing with their own dealer networks. California falls into this latter category, as the California New Motor Vehicle Board bans manufacturers from owning dealerships within ten miles of other same-make independently owned stores. But that apparently did not stop Chrysler from opening a dealership in Los Angeles which, according to a petition filed by the California New Car Dealers Association, is within ten miles of not one, but three independent Chrysler stores.

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From the “yeah, that will work” file comes word that Chrysler is pushing dealers to hire more salespeople in order to make its five-year plan goal of increasing US-market sales by 45% this year. Spokesman Peter Grady tells Bloomberg via a leaked memo to dealers

While it’s still early in the calendar year, now is the time to act. Hiring additional personnel in preparation for the spring market is essential for success in 2011.

But aren’t the newly updated Chryslers supposed to sell themselves? Seriously though, the real problem with this plan isn’t simply that it reeks of desperation… it’s that Chrysler is going to have to do more than just increase its number of dealers. After all, isn’t quality as important to a sales force as quantity?

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Chrysler is coming down hard on some of their Jeep dealers. The Monroe Dodge Superstore in Monroe, MI, just down the road from Toledo, wanted to celebrate the 70^th anniversary of the Jeep. The first Willys-Overland Jeep was built 1941 at their plant in Toledo. The good folks at the Monroe Dodge Superstore thought hard about a good catchphrase. Then, the lightbulb went off. Presto, 600 T-shirts were printed, emblazoned with “Imported from Toledo.” They immediately heard from Chrysler. Not in a good way. Read More >

With automakers keeping the incentive pedal pinned to the floor as they entered the new year, a price war has been brewing in the US market for a while now. Hyundai USA CEO John Krafcik has called the trend “a step backward for the industry,” pointing out that nearly every automaker had struggled to regain pricing power coming out of nearly three years of industry-wide weakness. But with GM and Detroit leading the way with high (if “targeted”) incentives, matched by uncharacteristically high incentives from import-brand rivals like Honda and Toyota, it seemed that nothing could prevent a volume-pumping, but profit-sapping price war in the US. At least until Japan was hammered by earthquakes, tsunamis and nuclear accidents. Now, with manufacturers and suppliers still struggling to understand the full impact of production shutdowns and reduced inventories, TrueCar has projected current price trends forward, and finds that supply interruptions could reduce supply to the point where prices actually start coming up again. Check out TrueCar’s spreadsheet on supply and pricing projections in XLS format here, or hit the jump for a few highlights.

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The Federal Trade Commission has announced that it will be holding a series of round table discussions aimed at investigating misleading dealer practices in the areas of sales, financing and leasing. According to the Commission’s release, the round tables will

gather information on consumers’ experiences when buying or leasing motor vehicles. The roundtables will explore consumer protection issues related to the sale, financing, and leasing of the consumer vehicles consumers most often use – cars, SUVs, and light trucks.

For many consumers, buying or leasing a car is their most expensive financial transaction aside from owning a home. With prices averaging more than $28,000 for a new vehicle and $14,000 for a used vehicle from a dealer, most consumers seek to lease or finance the purchase of a new or used car. Financing obtained at a dealership may provide benefits for many consumers, such as convenience, special manufacturer-sponsored programs, access to a variety of banks and financial entities, or access to credit otherwise unavailable to a buyer. Dealer-arranged financing, however, can be a complicated, opaque process and could potentially involve unfair or deceptive practices.

The National Auto Dealer’s Association says [via Automotive News [sub]] it will attend the round tables and represent dealers’ efforts to “increase financial literacy” and “promote regulatory compliance.” Auto dealer finance was one of the only finance sectors exempted from the Consumer Financial Protection Act, despite protests from the Pentagon.

One of the many theories for Mahindra’s absolute botching of its long-anticipated US launch is that the Indian automaker was too busy last year acquiring its diesel-4×4 soulmate, Ssangyong. Both firms got their start building Jeep CJs, both specialize diesel-powered vehicles, but while Mahindra focuses on trucks and old-school SUVs for the developing world, Ssangyong has more experience with crossovers and MPVs as well as sales in mature markets like Europe. Together, they make an Asian invasion of diesel-powered 4x4s far more likely to succeed in the US, and Automotive News [sub] reports that the plans are already in the works. According to Chairman Yoo Lee [via AN [sub]], Ssangyong sees itself selling about 20k units in the US

two-to-three years from now – but within five years at the latest.

If true, this explains why Mahindra backed out of its deal with US distributor Global Vehicles: rather than cobbling together a sales network for pickups alone, Mahindra needs to plan for an independent dealer network in the states that’s capable of selling Mahindra pickups and SUVs, Ssangyong’s brand-new Korando crossover (reviews here and here) and possibly even REVA EVs. Think of it has one-stop shopping for all your developing-world 4×4, diesel and tiny electric car needs.

Don’t get confused by news that Volkswagen formally took over the Porsche Holding. They did, but Porsche Holding Salzburg is just one of the complicated web of Porsche companies. And  quite an interesting one. Read More >

Bloomberg [via Automotive News [sub]] reports that all 130 planned Fiat USA showrooms will not be opened until September. Initial rollout plans had called for “around 165” dealers, but that number has been dialed back, possibly due to overlap. It’s not clear if the delay will affect Chrysler’s goal of selling 50k Cinquecentos this year, but it probably will considering

About a dozen Fiat franchises have started up and a total of 20 may be open by the end of February, said Laura Soave, head of the Fiat brand for Chrysler.

About 30 to 40 will be open by the middle of March, she said. Chrysler said in September that it wanted Fiat showrooms running by the end of February, adding that it would allow some dealers to open later.

“It’s a tiny bit behind,” Soave said today.

The Barcelona Reporter, er, reports that a new law passed by Spain’s parliament

allows dealerships a full refund from manufacturers for unsold cars and, in some cases, to charge carmakers for sales teams’ labour and other related expenses… Car manufacturers will have to repay dealerships for any cars they fail to sell after three months, under the new law.

In the event carmakers’ contracts with distributors expire or are cancelled, they must also pay for layoffs at salesrooms and compensate them for lost custom.

Proponents argue that the law, which was bundled with a number of economic measures, would protect Spain’s 150k dealer jobs which, they argue, exist “at the whim” of manufacturers. Needless to say, the OEMs are not amused, and the association of foreign automakers who build cars in Spain (ANFAC) hints that investments by members like Ford, Nissan and Volkswagen will have to be reconsidered in light of these new rules. And even within Spain, the measure is drawing controversy. Industry minister Miguel Sebastian complains

How will a German, Japonese or French (car manufacturer) understand this law if I do not even understand it myself?

In other “Spain hates cars” news, Auto Motor und Sport reports that the country has also approved a new urban speed limit of 30 km/hour (about 18.6 MPH) in order to reduce pedestrian deaths.

Wards Auto reports that Ford now has more dealerships than Chevrolet “for the first time in years.” Not that this is a sign of growth on Ford’s part… it simply cut fewer dealerships (62) last year than Chevy, which wiped out some 372 at the behest of the government and its consultants. Chevy, meanwhile, has struck back at Ford by offering its version of Ford’s SYNC system… some 3 years after Ford built the only real brand in what is now the crowded field of in-car connectivity options. Of course, Chevy hasn’t released a date or price for MyLink sales, but at this point, what’s the rush? Besides, Ray LaHood is going to really roll up his sleeves and take on the “epidemic” of distracted driving any minute now… right?

Automotive News [sub] reports:

Sixty-four dealerships that were terminated during Chrysler’s 2009 bankruptcy reorganization sued the U.S. Treasury Department today, seeking at least $130 million.

The suit, filed in the U.S. Court of Federal Claims here, alleges the government violated the Constitution by taking the stores’ franchises and their state legal rights without adequate compensation.

Lawyers for the plaintiffs say that more dealers could come on board, as the 64 suing dealers represent only eight percent of Chrysler’s cull. Neither Treasury nor Chrysler (which is not named in the suit) have commented. The suit, which can be read in its entirety in PDF format here, claims violation of Fifth Amendment rights, arguing that:

[the dealer cull] served the public purpose of promoting stability to the financial system of the United States… This is a loss that should not, however, be borne by a few individual dealers but, by reason of its broad and salutary public purpose, must in fairness and justice be borne by the public as a whole.

Automotive News [sub] reports that Global Vehicles, a firm with a contract to distribute Mahindra pickup trucks in the US, has dropped its lawsuit in US court in an apparent attempt to rescue its distribution deal. The contract between Mahindra and GV called for British arbitration of disputes, and apparently the British arbitration panel required that all claims be handled through it rather than in US courts. The dropped suit would have required Mahindra to press forward with its US launch regardless of pending arbitration. Mahindra, meanwhile, has said it is looking outside of its deal with GV for a US distributor, so it’s not clear if GV’s olive branch will even make a difference.

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Automotive News [sub] reports that Mercedes-Benz has agreed to take over Smart car distribution in the United States from Penske Automotive Group after about three years of operating as a Penske-run distribution channel. Beginning in July, Mercedes will take over all of Smart’s US-based operations because

1. It needs the small-car volume to meet new corporate average fuel economy standards that take effect in the United States in the 2016 model year.

2. Daimler AG integrated Smart into the Mercedes-Benz car unit September. The United States is the only market where Smart and Mercedes operate separately.

But the impact of this deal isn’t limited to ownership and operations, as AN [sub] reports that the four-door car being developed by Nissan for Smart USA has been canceled.

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Ford’s been fixing Lincoln for so long now, it’s almost surprising that things on the dealership level are still so broken. But, as Ford told its dealers at last weekend’s NADA convention [via Automotive News [sub]], it’s time to put up or become a former Lincoln dealership. By the end of this year, every Lincoln dealer must comply with a few of Ford’s “more than reasonable” expectations, to wit:

• Offering what Lincoln calls “owner privileges.” That includes providing a free car wash and loaner vehicle to owners who come in for service
• Having a dedicated service manager and dedicated sales staff for Lincoln, Bokich said. That applies specifically to Lincoln dealers paired with Ford stores.
• Having only the word “Lincoln” appear on all franchise signage, not Mercury. Ford discontinued the Mercury brand as of Dec. 31.
• Having at least 30 percent of used-vehicle inventory be certified pre-owned vehicles.

You know, those do sound like reasonable standards for a luxury brand dealer network… and if a Lincoln dealer doesn’t like them, well, Ford is looking to trim the network by 100 stores or so anyway. Still, isn’t Lincoln’s problem pretty conclusively product-related? There’s no word from Ford’s boffins on that front, which means some dealers may be happy to leave the Mercury sign up and become one of those used car lots that still has an Oldsmobile sign up. Yes, Lincoln needs a top-notch dealer experience (and an own-brand sales manager to keep marks away from the Taurus) to make Lincoln viable, but demanding it without even hinting at future product is to ask Lincoln dealers to make an incredible leap of faith.

Ford brought two pieces of good news for their dealers at this year’s NADA meeting: The dealers will get more cars. And they will get more cash. But wait, there will be less … Read More >