Duke Duchac has been a Nissan dealer in Rhinelander, Wis., for nearly three decades. But this year Nissan North America Inc. moved to eliminate his franchise because of what the company called unacceptably low sales at his dealership.
Nissan vetoed his plan to sell his dealership and refused to pay him the would-be buyer's purchase price, Duchac says. Now he's suing Nissan.
"After 30 years with Nissan, it's pretty scary to get treated like this," Duchac says.
He is not alone. Since 2002, Nissan has told more than 40 U.S. dealers that they cannot sell their dealerships, dealer sources say. Nissan ultimately plans to close those dealerships because it has concluded that the local markets cannot sustain them. Those dealers have no recourse other than expensive legal action.
According to an Automotive News survey of dealers, dealer attorneys, state dealer associations and state regulators, Nissan has generated complaints from at least 118 dealerships in 25 states. That is more than 10 percent of Nissan's U.S. dealership network.
In addition to the 40-plus franchises Nissan plans to eliminate when holders die or retire, the company is telling many other dealers to improve sales, upgrade stores and stop selling competing brands in Nissan stores. If they don't, they could face sanctions - up to the loss of their franchises.
Nissan declined to confirm the number of letters it has sent dealers to prohibit them from selling their dealerships or transferring their franchises.
Nissan's U.S. dealership network - 1,072 as of Jan. 1 - has stayed fairly constant over the past few years. But Nissan is dropping some franchises and adding others. Olga Reisler, director of market representation for the Nissan and Infiniti divisions, says potential buyers are "waiting in line" for Nissan franchises.