Chrysler agrees to pay $955,000 to settle L.A. dealer complaint
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DETROIT -- Chrysler Group, less than a year after opening a showcase factory-owned dealership in Los Angeles for Fiat and other brands, has sold the store and agreed to pay $955,000 to settle a complaint from the California Department of Motor Vehicles.
The agency, which announced the settlement Friday, said the automaker was unfairly competing by operating a factory store within 10 miles of several other Chrysler dealerships.
In September, the California DMV filed an administrative action against Chrysler’s occupational licenses and, as part of the administrative settlement, Chrysler agreed to pay the DMV $750,000 in penalties and fines; $160,000 in reimbursements of investigation and legal fees, and up to $45,000 for post-settlement audits, according to the DMV.
The automaker also confirmed that it had completed the sale of the high-profile, 189,000-square-foot dealership to New Century Automotive Group of Los Angeles at the end of October. Terms of the sale were not disclosed.
Two new dealer licenses were issued for the facility: Downtown Figueroa Motors LLC, doing business as Motor Village L.A., and Downtown Apex Motors LLC, doing business as Fiat of L.A. Both list New Century owner Dennis Lin as the business principal. Lin has not returned repeated calls seeking comment.
“We were looking for a dealer who would carry on our vision of Motor Village as a showcase for our brands and a dealer committed to experimenting with new retail techniques and heightened levels of customer care,” Peter Grady, Chrysler vice president of network development and fleet, said in a statement. “Motor Village made an immediate statement about our intentions in Los Angeles and state of California, and it will continue to do so under Lin’s private ownership.”
Motor Village LA opened in January as a high-visibility showcase for Chrysler's products, including Fiat, and new retail techniques. The dealership features a glass vehicle display tower that overlooks Interstate 110.
The factory store -- a multimillion dollar effort by Chrysler to rebuild its lagging market share in California -- quickly came under fire from neighboring dealers and the California New Car Dealers Association.
The association complained in March to the California DMV that the company was unfairly competing by operating a factory store within 10 miles of several other Chrysler dealerships.
"We wanted to get this store into private hands, and we have," Chrysler spokesman Ralph Kisiel said.
Brian Moss, director of government affairs for the California New Car Dealers Association, said the settlement should be a lesson to all manufacturers.
“We’re pleased that the DMV investigation has resulted in Chrysler being held responsible for its illegal conduct. And the fact that they were required to pay [$750,000] in fines is certainly an indication that the DMV treats manufacturer ownership of a dealership seriously,” Moss said.
“We hope other manufacturers will see what happened in this case and think twice about doing something similar.”
You can reach Larry P. Vellequette at lvellequette@crain.com.
