It’s probably not a good idea to be opening a new dealership right now, let alone near an existing location of the same brand. That’s the issue behind a lawsuit one Nissan dealer owner has filed, claiming the automaker is making the inventory situation worse, as Automotive News reports.
F. James Rourke is co-owner and general manager of Central Avenue Nissan in Yonkers, New York. The dealer has been at its location for close to 20 years. But problems arose recently when Central learned that a new Nissan dealer was opening nearby. According to the suit filed in January, Nissan sent Central a notice on January 10th saying that a competing dealership would be opening soon in Central’s market. In any other area, this may not be much of a problem. But according to New York state franchise laws, a dealer’s defined market area is within six miles. The new dealer plans to open just under that radius. From Automotive News:
The new Nissan dealership, at 450-460 Tarrytown Road in White Plains, N.Y., is 5.87 miles from Rourke’s Central Avenue store, according to the lawsuit, which named Nissan North America Inc. and its finance captive, Nissan Motor Acceptance Co. as defendants.
Aside from potentially violating franchise laws, Rourke says that there is no need for another dealership in the area since Central has been a staple there for customers. They’re particularly known for their vehicle service, so much that Nissan will send difficult repairs specifically to Central for a fix. From the suit:
Central Avenue also provides outstanding repairs and vehicle servicing, such that Central Avenue is considered a premier vehicle service provider in the region. In fact, Nissan regularly directs customers to bring vehicles in need of complicated or unique repairs to Central Avenue.
The bigger issue though is the inventory shortage, the core of the suit. To make up for all the costs associated with a new dealer opening, automakers will usually pull inventory from an existing dealer and give it to the new one to sell. You can see why, in addition to pretty much having another mouth to feed when there isn’t enough to go around, where that would be a problem.
Rourke called what Nissan is doing a deliberate effort to undermine his dealership. “When you can’t even supply the dealerships that you currently have with an ample amount of inventory, you’re going to bring in a new franchise and give him additional inventory?” he stated in an interview with Automotive News. The dealer currently has a 23 day supply of vehicles, with big sellers like the Rogue sitting at a four-day supply. Central is in dire straits. The suit aims to block Nissan from opening the new store nearby. Central is also seeking an undisclosed amount in damages and legal fees.