Nissan dealer uses 'Chevy defense' to keep franchise
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The Sims NIssan dealership is in Warren Ohio and the GM plant is in Lordstown about six miles away. |
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NASHVILLE -- An Ohio court has upheld a Nissan dealer’s legal position that a nearby Chevrolet vehicle assembly plant is hurting his performance.
The ruling by Ohio’s Franklin County Court of Common Pleas may have implications for other auto dealerships located in uniquely challenging markets. It raises a legal question about the factory practice of comparing the performances of auto dealerships in dissimilar markets.
Warren, Ohio, Nissan dealer Bill Sims’ legal beef is not with General Motors -- it is with Nissan North America, which attempted to terminate his franchise after labeling him the worst performing Nissan store in his 13-state region.
Sims is a Buick-GMC dealer who took over the local Nissan point in 2001 after its previous owner closed.
Nissan did not accept Sims’ argument that GM’s nearby Lordstown assembly plant, with 4,500 employees producing the Chevrolet Cruze, and the Chevy Cobalt and Cavalier for years before that, needed to be viewed as a challenge limiting his Nissan market penetration. After years of warnings to Sims for failing to meet factory performance standards, Nissan moved to terminate his franchise in 2009.
Sims protested to the Ohio Motor Vehicle Dealers Board that it was not fair to measure his results against the performance of Nissan dealers in markets that did not contain a GM assembly plant.
Sims argued that because GM provides special vehicle discounts to Lordstown employees, their family members and friends, as well as to thousands of GM retirees there, the local retail market is artificially stacked against competing brands. Evidence presented in the court case showed that Chevrolet’s local market share is double its state average, while Toyota, Nissan and Honda hover at about half of their normal state average for sales effectiveness.
“We’re talking about an old steel town where they never liked imports,” Sims’ attorney, Chris DeVito of Cleveland, told Automotive News. “There are 40 years of GM retirees still getting discounts on GM cars and trucks. And my client is still managing to run a profitable dealership there.
“But how can you compare his performance against a dealer who doesn’t have to contend with all that?”
The Ohio board sided with Sims and blocked the termination last year. Nissan appealed the ruling to the local county court, which last week upheld the board’s decision.
A spokesman for Nissan said today that the company’s attorneys are evaluating the decisions and could not comment on it.
You can reach Lindsay Chappell at lchappell@crain.com.
