One-Sided Bill Runs Contrary to New Hampshire’s ‘Live Free or Die’ Tradition
By Matthew Godlewski, Vice President of State Affairs
Alliance of Automobile Manufacturers
Think back to 1998. Remember your hairstyle? Your clothes?
A lot changes in 15 years. Not only do styles and trends change, but most things need a refresh from normal wear and tear. The same is true for auto showrooms.
That’s partly why automakers are so strongly opposed to legislation crafted by car dealer lobbyists in Concord that would restrict automakers from requiring New Hampshire’s franchised auto dealers from improving or upgrading facilities for a full 15 years. Automakers are asking for a reasonable 7 years, the industry standard.
And when they do upgrade and refresh their showrooms and waiting areas, dealers want full freedom to do whatever they want without input or oversight from automakers. But like with any retail product, brand consistency is important in the ultra-competitive auto industry and manufacturers deserve to be part of the renovation process.
The truth is franchise agreements serve a very real and necessary purpose when it comes to retail sales. They ensure like quality, style, and design that reflects on the value and character of the product sold. That’s why a McDonalds looks like a McDonalds or a Jiffy Lube like a Jiffy Lube. The same is true for selling cars and trucks.
And the illogical changes dealers want in New Hampshire law that regulates their business relationships with manufacturers doesn’t end there. Their changes hurt consumers. They will cost consumers.
Dealers insist on changes that would raise retail rates for service and repairs for everyone. Why should New Hampshire motorists pay more than drivers in other states so dealers can increase their own profits? They shouldn’t.
Dealers want to eliminate checks and balances built into today’s accounting practices. Five years ago, automakers could ensure the reimbursements they were paying for warranty and recall work were accurate by auditing those invoices up to 24 months back. In 2009, that review period shrank to 12 months. Dealers now insist on 6 months. What are they hiding?
And, in their bill, dealer lobbyists included first-of-its-kind language in the country that would make it easier for dealers to secure automakers’ proprietary and confidential information and sue, thereby increasing litigation, clogging up the courts, and passing on those increased costs of doing business to consumers. Good for dealers and their lawyers, but again not for you.
The fact is Senate Bill 126 is poor public policy that lets government pick business winners and losers and sets a dangerous precedent in New Hampshire law. It benefits car dealer interests, not yours. And it runs contrary to New Hampshire’s “Live Free or Die” tradition of encouraging a competitive marketplace for commerce while also protecting the interests of consumers.
The auto industry is in rebirth, and that’s good for New Hampshire. Close to 24,000 New Hampshire families rely on jobs in the greater auto industry. And auto-related taxes and fees generate $295 million annually to state coffers, totaling 14 percent of total state tax revenue.
According to the National Automobile Dealers Association, last year dealers enjoyed record pretax profits of nearly $850,000 per store on average. The ship has been righted. Automakers want to share that success with dealers, but not at the expense of New Hampshire families who will ultimately be left footing the bill if SB 126 becomes law.
Automakers stand ready to work with both legislators and dealers to find a balanced solution that addresses the needs of all parties and protects consumer interests as well.
The Alliance of Automobile Manufacturers, the leading advocacy group for the auto industry, represents 77% of all car and light truck sales in the United States, including the BMW Group, Chrysler Group LLC, Ford Motor Company, General Motors Corporation, Jaguar Land Rover, Mazda, Mercedes-Benz USA, Mitsubishi Motors, Porsche, Toyota, Volkswagen Group of America and Volvo Cars North America.