Thanks to a new sales practice put in place by Honda, the California New Car Dealers Association (CNCDA) has sent a cease-and-desist letter to the automaker. It seems trying to innovate and adapt to consumers’ shifting preferences comes at a price in the Golden State.
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What CNCDA is upset about is Honda and Sony teaming up to sell the Afeela electric car to consumers directly, not through dealers. The organization says that move violates California state law as the automaker goes around its Honda and Acura dealers.
More specifically, CNCDA cites in a press release on the issue that as Honda takes Afeela deposits directly from consumers in California instead of using dealerships to collect the money, the automaker is acting as a scofflaw.
“California law is crystal clear. Automakers and their affiliates are not allowed to compete with their own franchised dealers through direct sales,” said Brian Maas, CNCDA President. “Sony Honda’s rollout of selling Afeela vehicles directly to consumers is an unlawful effort to circumvent the state’s protections for franchisees, and we are fully prepared to take legal action to defend our Honda and Acura dealer members.”
It will be interesting to see how this issue plays out. Will Honda stand its ground or will it cave to the CNCDA demands? Will this case end up in court, and if so, what will be the outcome?
CNCDA already filed a lawsuit against Volkswagen and Scout Motors in April, so Honda might be next.
Many people are beyond tired of car dealerships and the financially damaging games they play. As technology continues to improve, a growing body of the public has openly wondered why apart from servicing vehicles are dealers needed in modern times.
We believe dealerships are aware at least to a degree of this growing sentiment. However, it seems for many of them the strategy is to use the legal system and their heavy lobbying influence in state legislatures to choke out direct competition with automakers.
Is that a good or bad thing? Everyone’s going to have their own take on that. We think for a growing section of the population, only being able to buy from dealerships is a huge negative.
Image via shmafeela/Instagram