TITLE 31
Motor and Other vehicles

CHAPTER 31-5.1
Regulation of Business Practices Among Motor Vehicle Manufacturers, Distributors, and Dealers

SECTION 31-5.1-4.2


§ 31-5.1-4.2 Establishing new dealerships and relocating existing dealerships.

(a) In the event that a manufacturer seeks to enter into a franchise establishing an additional new motor vehicle dealership, adding an additional location for an existing new motor vehicle dealership, or relocating an existing new motor vehicle dealership within or into a relevant market area where the same line or make is then represented, except when the corporation operating the new motor vehicle dealership contains one or more officers who were also officers of a dealership operating at the same location as the new motor vehicle dealership immediately prior to the establishment of the new motor vehicle dealership, the manufacturer shall in writing by certified mail first notify the department and each new motor vehicle dealer in the same line or make in the relevant market area of the intention to establish an additional dealership to add an additional location for an existing new motor vehicle dealership, or to relocate an existing dealership within or into that market area. Within thirty (30) days of receiving notice or within thirty (30) days after the end of any appeal procedure provided by the manufacturer, any affected new motor vehicle dealership may file with the department a protest to the establishing or relocating of the new motor vehicle dealership or adding an additional location for an existing new motor vehicle dealership. When a protest is filed, the department shall inform the manufacturer that a timely protest has been filed, and that the manufacturer shall not establish or relocate the proposed new motor vehicle dealership or add the proposed additional location for an existing new motor vehicle dealership until the department has held a hearing, nor until the department has determined that there is good cause for not permitting the new motor vehicle dealership. For the purposes of this section, the reopening in a relevant market area of a new motor vehicle dealership shall be deemed the establishment of an additional new motor vehicle dealership.

(b) In determining whether good cause has been established for entering into or relocating an additional franchise for the same line or make, or adding an additional location for an existing new motor vehicle dealership, the department shall take into consideration the existing circumstances, including, but not limited to:

(1) Permanence of the investment of the existing new motor vehicle dealer(s) in the community;

(2) Whether the new motor vehicle dealers of the same line or make in that relevant market area are providing adequate consumer care for the motor vehicles of the line or make in the market area which shall include the adequacy of motor vehicle sales and service facilities, equipment, supply of motor vehicle parts, and qualified service personnel;

(3) Whether there is reasonable evidence that after the granting of the new motor vehicle dealership, that the market would support all of the dealerships of that line or make in the relevant market area;

(4) Whether it is injurious to the public welfare for an additional new motor vehicle dealership to be established;

(5) The growth or decline in population and new motor vehicle registrations during the past five (5) years in the relevant market area;

(6) Whether the manufacturer is motivated principally by good faith to establish an additional or new motor vehicle dealer and not by non-economic considerations;

(7) Whether the manufacturer has denied its existing new motor vehicle dealers of the same line or make the opportunity for reasonable growth, market expansion, or relocation;

(8) The reasonably expected or anticipated vehicle market for the relevant market area, including demographic factors such as age of population, income, size class preference, product popularity, retail lease transactions, or other factors affecting sales to consumers in the relevant market area;

(9) Growth or decline in population, density of population, and new car registrations in the relevant market area;

(10) Distance, travel time, traffic patterns, and accessibility between the existing new dealership of the same new line make and the location of the proposed new or relocated dealership;

(11) The amount of business transacted by existing new motor vehicle dealers of the line or make when compared with the amount of business available to them;

(12) Whether the existing new motor vehicle dealers of the line or make are receiving vehicles and parts in quantities promised by the manufacturer, factory branch or distributor and on which promised quantities existing new motor vehicle dealers based their investment and scope of operations.

(c) Any parties to a hearing by the department concerning the establishing or relocating of a new motor vehicle dealership or adding an additional location for an existing new motor vehicle dealership shall have a right to a review of the decision in a court of competent jurisdiction.

(d) At any hearing conducted by the department under this section, the manufacturer or dealer seeking to establish an additional new motor vehicle dealership, relocate an existing new motor vehicle dealership, or add an additional location for an existing new motor vehicle dealership shall bear the burden of proof in establishing that good cause exists for it.

(e) Every person, firm or corporation who prior to the retail sale of a motor vehicle, converts or otherwise assembles, installs or affixes a body, cab or special equipment to a chassis or who adds to, subtracts from or modifies a previously assembled or manufactured motor vehicle shall be required to comply with the requirements of this section.

History of Section.
(P.L. 1981, ch. 346, § 3; P.L. 1982, ch. 448, § 1; P.L. 1990, ch. 400, § 1; P.L. 1990, ch. 401, § 1; P.L. 1991, ch. 44, art. 14, § 3; P.L. 1991, ch. 50, § 2; P.L. 2000, ch. 428, § 1; P.L. 2000, ch. 431, § 1; P.L. 2001, ch. 27, § 1; P.L. 2001, ch. 267, § 1.)