Mazda North American Operations is illegally canceling its dealer agreements to force dealers to sign new contracts, the Virginia Automobile Dealers Association claims. The company counters that it is complying with state franchise law.
Mazda says it will end its current dealer agreements Dec. 22 and replace them with the revised contracts. Under the change, Mazda dealers nationwide will take title to new vehicles at the point of shipment instead of when the vehicles arrive at dealerships. Vehicles in transit remain covered by Mazda's insurance.
The Virginia dealer association says state law prohibits automakers from terminating a franchise without good cause. The group is asking the Virginia Department of Motor Vehicles to investigate the dispute.
Mazda says the change has not generated formal complaints in other states.
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