Digital Dealer - October 2017 - 10

By Richard SOX
Partner,
Bass Sox Mercer PA

// Ownership

Nissan Dealers
Join Forces
Against NNA
Policies
Nissan dealers are
fed up with NNA's
abusive tactics and are
creating an alliance of
Nissan dealers in hopes
of negotiating favorable
changes to NNA policies.
These NNA practices
include:
1. Constant changes to
incentive programs;
2. Unreasonable and
unattainable objectives
under the Sales Growth
Program;
3. Efforts by Nissan to
force changes in dealer
operators;
4. Unfair distribution
of financial intervention
funds;
5. Lack of transparency in Tier 2 advertising
expenditures;
6. Arbitrary or abusive
audits of dealer activities;
and
7. Actions which depress the return-on-sales
to levels below industry
average.
Nissan dealers believe
that these practices
do harm to the brand,
devalue the franchise,
10

OCTOBER 2017

and negatively impact
dealers. Dealers believe
that actions on the part of
NNA contribute to a poor
culture for the Nissan
dealer body, as reflected
in Dealer Attitude Survey
results.

customer disclosure
related to non-GM parts
and non-GM service contracts will have the effect
of causing customers to
avoid the non-GM product
which, in many cases, is
a better product for both

DEALERS BELIEVE
THAT ACTIONS ON
THE PART OF NNA
CONTRIBUTE TO A
POOR CULTURE FOR
THE NISSAN DEALER
BODY, AS REFLECTED
IN DEALER ATTITUDE
SURVEY RESULTS."
GM TIGHTENS
THE SCREWS ON
DEALERSHIP SALE OF
NON-GM PARTS AND
SERVICE CONTRACTS

On August 10, 2017,
General Motors sent out
bulletins 17-12 and 17-13
addressing the use of
non-GM parts and nonGM service contracts.
The concerns which have
been raised by dealers include (i) that the required
D I G I TA L D E A L E R . C O M

the customer and the
dealership; and (ii) that
the penalties proposed
for violating the disclosure
requirements are significant.
The good news is
that the GM Sales and
Service Agreement does
not allow GM to require
a separate disclosure
including the type of
language GM is asking
dealers to convey to the

customer as it relates to
both the non-GM parts and
service contracts. Instead,
section 5.1.1 of the Dealer
Agreement appears to only
require that the customer
be informed "in the purchase order or bill of sale"
that the product is not a
GM product.
If the proposed new disclosures are considered to
be a unilateral expansion
of the existing franchise
requirements, dealers in
some states have a right to
protest the new procedures
as an "adverse modification" of the franchise. A
modification will be prohibited if it adversely and substantially alters the dealer's
rights, obligations and
investment in the franchise.
Dealers are required to file
a protest within a certain
period of time from receipt
of notice of the proposed
franchise modification.
The proposed modification
is then stayed until there is
a final determination by the
court.
As it relates to non-GM
parts, the required disclosure language which
states "GM reserves the
right to invalidate the
affected portions of the GM
"Bumper-to-Bumper" New
Vehicle Limited Warranty .
. . for any vehicle . . . that
is equipped with non-GM
equipment, parts or accessories" also runs contrary
to the federal Magnuson-Moss Warranty Act,
15 USC 2301 et seq. The
Act prohibits a manufacturer from voiding a vehicle
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Table of Contents for the Digital Edition of Digital Dealer - October 2017
