Jaguar and Land Rover dealers in Europe are threatening to take the automaker to court over the automaker's new contracts that dealers says substantially reduce their margins.
Dealers are angry that the automaker plans to reduce their margins after they have invested millions in their dealerships in recent years at the automaker's request.
JLR's plunging sales in Europe are also adding to dealers' struggles. Last year, sales of Land Rover and Jaguar vehicles in the EU, EFTA and UK fell 20 percent to 119,861, according to data from industry association ACEA.
Jaguar Land Rover has terminated contracts with its European dealers and offered new terms.
If the automaker sticks to introducing the new dealer contracts as early as April 1, it could lead to a court battle from which no party would benefit, the head of JLR's European Dealer Association, Arjen de Jong, wrote in a letter to the manufacturer obtained by Automobilwoche.
A key problem from the dealer's point of view is that JLR is way off the mark with its sales forecasts.
"JLR's current volume forecasts are significantly lower and with worse margins," de Jong wrote.
In Germany, JLR's new contract will halve dealer margins to a maximum of 9 percent.
JLR also wants to curtail the influence of the dealer association in the new contracts.
