Sunday, April 5, 2009

Indiana Franchising Law - New Bills Dies in General Assembly

So reported The Indianapolis Business Journal in Dealers seek brand security - Auto sellers want refuge from industry fallout, but trio of bills have fallen flat at Statehouse

The bills backed by the Automobile Dealers Association of Indiana would have required automakers to buy back cars and parts when terminating dealers and to pay their rent for up to two years.

One measure would have made it an unfair business practice for an automaker to prohibit a dealer from representing more than one brand of vehicles at a site.

As for whether the language could yet be inserted in other bills still on the roll, “We’re looking,” said State Sen. Randy Head, R-Logansport, who sponsored Senate Bills 497, 447 and 432. He said ADAI lobbyist and former Indiana House Speaker Nelson Becker was trying to work out a deal with manufacturing interests. - Indianapolis Business Journal - Story Detail
SB 497 would have required automakers that terminate a dealer to buy back new vehicles with fewer than 300 miles on the odometer.

Automakers also would’ve had to buy back parts still in original packages and in some cases repurchase for fair-market value special tools, equipment, required computer systems and software.

The bill would have helped dealers recover facilities costs. Dealers who lease a building from someone other than the automaker would be entitled to the lesser of the amount of rent for the unexpired lease term, or two years’ rent.

Dealers owning the facility would be entitled to an amount equal to the reasonable rental value of the dealership facilities for two years.

Manufacturers, predictably, are less than enthusiastic about such legislation, which also has been introduced in other states, such as Colorado, Maryland, Montana, New Hampshire, Utah, Vermont and Virginia.
The politics between the franchisees (the dealers) and the manufacturers (the franchisors) arouses my curiosity a bit but I think the outcome was dictated by the current economy and the state of the Big Three American automakers. If anyone has any background, it might be good to add it as a comment below.

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