Porsche dealer in Florida seeks $300 million in factory fight

A luxury vehicle dealership in the Miami area is suing Porsche for $300 million, alleging the German sports-car maker is withholding inventory because the dealership has not built a new standalone store.

The Collection, a multibrand dealership in Coral Gables, Fla., alleges that Porsche is violating the state's dealer franchise law by restricting the allocation of "pool cars" after the retailer refused to build an exclusive brand store.

Porsche said the pool cars, which typically account for no more than 20 percent of available inventory, are assigned to dealers at the factory's discretion. To qualify, dealers must operate exclusive Porsche stores and meet facility design standards, the company said.

Sean Burstyn, the Miami attorney representing The Collection, said Florida franchise law prohibits an automaker from requiring dealers to establish exclusive facilities.

"Where exclusivity is a requirement, the manufacturer has run afoul of our state's statute," said Burstyn, founder of Burstyn Law PLLC.

A spokesman for Porsche Cars North America declined to comment on the suit, which was filed Sept. 22 in Miami-Dade County's 11th Judicial Circuit. The Collection claims that its Porsche franchise could be "completely worthless" if it continues to be denied pool allocations.

The Collection notes in the suit that Porsche's "coercive, retaliatory and malicious conduct" has already cost it "millions of dollars" and, if left unchecked, will cause more than $100 million in damages.

The lawsuit against Porsche and its subsidiaries, including Porsche Latin America Inc. and Porsche Cars North America Inc., seeks to prevent the automaker from establishing a new franchise in Florida while the litigation is ongoing.

"This is an unfortunate and hopefully short chapter in what has been a nearly 30-year strong relationship between The Collection and Porsche," The Collection CEO Ken Gorin said in an e-mail. "We did not make this decision lightly."

The Collection is a 350,000-square-foot store in Coral Gables representing nine brands, including Porsche, Audi, Ferrari, Jaguar and McLaren.

According to the suit, Porsche asked The Collection to develop an exclusive brand store in Kendall or Cutler Bay, south of Coral Gables.

Burstyn described those cities as "remote, suburban locations" that have "relatively zero market for Porsches."

When The Collection declined to comply, the suit alleges, the automaker resorted to its "most powerful strong-arm tactic" — withholding all pool-car allocations.

In a letter addressed to The Collection's Gorin and filed with the lawsuit, Porsche Cars North America COO Joe Lawrence said Florida law does not prohibit the automaker from assigning pool cars at its business discretion.

Lawrence also noted that dealers are expected to meet facility requirements to qualify for pool-car allocations.

The Collection's decision not to build a standalone Porsche store demonstrates its "unwillingness to meaningfully engage in best business practices and promote the Porsche brand," Lawrence said. "As a result, it should come as no surprise that we continue to withhold discretionary assignment of pool cars to The Collection."

Pool cars give Porsche the flexibility to "reward dealers who are doing a great job and to curtail people that don't want to do what the manufacturer wants," a Porsche retailer who asked not to be identified told Automotive News.

The source also said making an exception for Gorin, the only U.S. Porsche dealer without an exclusive brand store, would be unfair.

"Now that Porsche has convinced all the other dealers to build these beautiful stores, it would be unfair to allow [Gorin] to operate in a void at a different cost structure," the retailer said. "They can't make 194 [dealers] build and then let one guy off for some reason."

In its suit, The Collection warns that Porsche's decision to withhold pool-car allocations could put the dealership's future business into a "death spiral."

That is because under Porsche's "turn and earn" allocation system, dealers receive vehicles based on the previous year's sales as a percentage of total sales in the nation. So, an under-allocation in one year will make it harder for a dealer to reach its sales target the following year.

Since Porsche began withholding pool-car allocations, The Collection has fallen "precipitously" in national sales ranking — from third in 2018 to 32nd as of June, the suit notes.

By the end of 2026, the dealership projects its annual allocation of new Porsche inventory to decrease to a "mere 352 vehicles."

When a manufacturer raises the sales target and under-allocates vehicles to a dealer, the suit notes, "it puts that dealer into ... a death spiral — an impossible cycle of increasing demands with fewer resources to meet those demands, until the dealer's franchise collapses."

Porsche's Lawrence argued that The Collection's declining market share is partly due to the brand's retail network expansion. U.S. rooftops have increased to 195 from 191 in 2019.

The executive said that The Collection's year-over-year sales could reflect the nationwide decrease in Porsche sales. The brand's first-half sales slumped 10.5 percent.

"Florida Porsche dealers are generally experiencing a steeper decline than the national trend," Lawrence said.