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Auto Retailers Offer Strong Defense of Motor Vehicle Franchise System

Mar 21, 2016

Hundreds of comments, amounting to tens of thousands of pages, have been filed with the Federal Trade Commission (FTC) in connection with the Auto Distribution Workshop hosted by the agency on January 19, 2016 in Washington, DC.

Comments run the gamut from individual Tesla owners and supporters who want the FTC to weigh in on state restrictions on direct sales, right up to the Global Automakers and lawyers who represent the Auto Alliance and individual automaker clients. There was also an impressive number of comments from dealer advocacy organizations, like NJ CAR and the National Automobile Dealers Association (NADA), as well as scores of accountants and lawyers who work closely with new car dealers across America.

To see all of the comments go to NJ CAR’s comments can be found at #47.

More from the FTC…

NADA has also responded to the FTC’s plans to conduct a qualitative survey of 40-80 consumers who recently purchased automobiles and financed their purchases through dealers. The stated purpose of the survey is to inform the FTC about “current consumer protection issues that may exist and that could be addressed through FTC action, including enforcement initiatives, rulemaking or education.”

NADA strongly criticized the planned survey, pointing out several reasons why it was unnecessary, and how the Association felt the FTC should proceed. For instance, the FTC examined the same question during the 2011-12 Motor Vehicle roundtable process, which failed to produce credible evidence of systemic problems in the retail automotive industry. NADA also expressed concern that the FTC’s actions suggest a predisposition and unbalanced approach toward the issue.

In its comments, NADA suggested the FTC consult existing quantitative surveys (which are more reliable than qualitative surveys) that have found a very high level of consumer satisfaction with the vehicle purchasing process.

The FTC notice to which the NADA comments respond is the first of two notices that the FTC is required to publish in the Federal Register concerning its consumer survey initiative. The FTC has neither announced a schedule for when it will issue its second notice, nor indicated what the next phase of this process will involve. Click on the link tosee NADA’s Survey Plan Comments. Both NADA and NJ CAR will continue to closely monitor and respond to further developments on this issue