Sonic, Mercedes end 4-year legal spat
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Mercedes-Benz USA and Sonic Automotive Inc. have settled a nearly four-year old legal spat over dealership upgrades.
The two sides declined to provide details of the settlement announced today.
Sonic, the nation's third-largest dealership group based on 2010 new retail unit sales, sued Mercedes-Benz in 2008 in a North Carolina court.
The retailer alleged that the automaker blocked an acquisition by demanding Sonic spend tens of millions of dollars to remodel four of its nine Mercedes-Benz dealerships to meet Mercedes' Autohaus standard.
"This agreement allows both companies to wholly focus on their business goals moving forward," Mike Slagter, Mercedes-Benz USA's vice president of sales, said in a statement issued jointly with Sonic.
Jeff Dyke, Sonic's executive vice president of operations, said in the statement that the agreement "resets the relationship with Mercedes-Benz and allows Sonic to focus on our own growth and acquisition plans within the Mercedes-Benz network as well as across the industry."
When the suit was filed, Sonic had an agreement to buy a Mercedes store in Charlotte, N.C., where the retailer is based.
But Sonic said Mercedes-Benz failed to approve the purchase unless Sonic met the automaker's demands for upgrades at four of the nine Mercedes dealerships it already owned.
In its suit, Sonic asserted that the automaker could not legally tie the acquisition to renovations at other dealerships.
At the time, Sonic said it was upgrading its stores adequately for far less money than Mercedes-Benz's Autohaus plan demanded.
You can reach Ellen Mitchell at emitchell@crain.com.
