N.C. bill could sink Blue Oval

Staff reporter Donna Harris can be reached at or 540-668-7295.

A bill before the North Carolina Legislature could outlaw Ford Motor Co.'s Blue Oval incentive program.

Dealer associations in 16 other states are watching Senate Bill 470's progress and could copy the legislation during the next legislative session, said Bob Glaser, executive vice president of the North Carolina Automobile Dealers Association.

Ford has discounted other attempts to attack Blue Oval with general laws banning price discrimination by arguing that because the program is available to all dealers, it is not discriminatory.

But the North Carolina bill defines price discrimination, declaring programs such as Blue Oval illegal. The legislation, which would take effect March 1, 2003:

n Bars factories from varying the price of a new vehicle based on a dealer's level of customer satisfaction.

  • Requires dealer incentives to be uniformly available to all dealers of the same make.

  • Mandates that dealer incentives be based solely on the dealer's actual sales volume or a reasonable projection of sales volume or on a uniform amount per vehicle sold.

  • Prohibits factories from rolling the cost of an unlawful dealer incentive program into vehicle price.

    Ford Division President Jim O'Connor said the company would stop making incentive payments in North Carolina if the bill passes. He said the legislation would put North Carolina Ford dealers at a competitive disadvantage with dealers in bordering states.

    In other dealer news:

  • Just 35.3 percent of dealers subscribe to a third-party online buying service, compared with 40.7 percent last year and 54 percent in 1999, according to the National Automobile Dealers Association's 2001 Dealership Internet Survey. Eighty-nine percent of dealers have their own Web sites, NADA said.

  • Sonic Automotive Inc., a publicly held dealership group based in Charlotte, N.C., ranked 15th on Fortune magazine's list of the fastest growing companies in the nation. Sonic has a three-year annual revenue growth rate of 115 percent.
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