4 N.Y. Chrysler dealers sue to block new rival
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Four upstate New York Chrysler dealers are suing the automaker in federal court for granting a dealership to a local auto group and allegedly putting their sales at risk.
By allowing Lia Auto Group to open a Chrysler dealership in the Albany suburb of Colonie, four dealers in the Albany/ Schenectady area -- Albany Dodge, Armory Garage, Goldstein Chrysler Jeep and Saratoga Chrysler Jeep-Dodge -- contend that Chrysler is going back on its strategy of trimming dealership counts after reorganization.
The lawsuit, which aims to prevent the new Lia dealership from opening and seeks financial penalties -- states that Chrysler is moving away from a smaller, more efficient dealer network strategy similar to Toyota or Honda by adding a seventh dealership to the Albany/Schenectady area.
The plaintiffs filed the suit Aug. 15 in U.S. District Court for the northern district of New York.
Lia Auto Group, also a defendant in the case, is scheduled to open its Chrysler dealership in September at the Lia Collision Center in Colonie and plans to have a permanent showroom built just east of its Lia Toyota store in Colonie next year.
The company was formed in 1977.
"We were impressed with the direction of [Chrysler's] vehicle strategy, and we feel that they will continue to be strong players in the American automotive market," Michael Lia, co-president of the Lia Auto Group, said in a statement.
Once the dealership opens, Lia Auto Group will sell 12 brands at 17 locations in New York, Massachusetts and Connecticut, according to the Times Union newspaper in Albany.
Lia Auto Group declined to comment.
A Chrysler spokesman said the company hasn't been served the lawsuit yet, and declined comment.
The four dealers said in the suit that they believed Chrysler, after going through bankruptcy, wouldn't return to its old practice of saturating markets with "same line" dealers and creating an environment of "commercial cannibalism."
A glut of dealers in the same market forces them to compete for customers, employees and advertising space, the lawsuit states.
The dealers allege in the suit that if the new Chrysler dealership is allowed to operate, they'll lose future profits, business opportunities, "substantial" real estate equity and reputation.
The four dealers feel they stuck with Chrysler during tough times and now the company is returning to a failed strategy by over-saturating the market, said their attorney H. Todd Bullard.
"You have these long-time loyal dealers who withstood the trauma of bankruptcy and the uncertainty that you had in the bankruptcy. They invested, held tight, ordered inventory and stayed with Chrysler when times were bleak," Bullard said in an interview Wednesday.
"Now when you have all of this happen and then you start seeing that they’re starting to put dealers literally in dealer’s own backyards. And you start to go up to the same dealer count in certain areas that you had in 2008, which they said was an improper model. It’s just makes you wonder."
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