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News
March 2016
Legal News
inside
Legal Battle Heats Up Over
Relocation Rule
2016 Legislative Session Begins
FTC Top Fraud Complaints
Modified Installment Sales
Contracts Coming
On February 17, 2016, the Minnesota Supreme Court issued
an opinion in favor of Wayzata Nissan who challenged Nissan’s
approval of a location in Eden Prairie. The dispute arose in the
spring and summer of 2014 when
Nissan Motor Company exercised
The court ruled that an “existing dealer” is
a right of first refusal and facilitated
the person or entity operating the dealership
the sale of Feldmann’s Nissan
at the time the manufacturer develops the
franchise in Bloomington to Steve
requisite intention to relocate
McDaniels. Nissan’s approval was
conditioned on the point being
moved to Eden Prairie. The question before the Court was whether
the Eden Prairie location was a “new” point where Wayzata Nissan
upcoming events
should have been afforded a ten-mile protected radius or was it a
may
relocation of an “existing dealer” where only a five-mile protected
Certified Title
10
radius is provided by law.
Minneapolis
The court ruled that an “existing dealer” is the person or entity
operating the dealership at the time the manufacturer develops
the requisite intention to relocate. According to the court, because
McDaniels was not an “existing dealer” on the date Nissan
developed an intention to authorize the relocation, the existing
dealer exception did not apply. Wayzata Nissan was entitled to
notice of the relocation and a good cause hearing.
The case will now head back to district court where a hearing will
be held to determine if the relocation of the Bloomington dealership
to Eden Prairie was supported by good cause. The court will make
its determination based on nine factors specified in the Minnesota
Franchise Protection Law. If the district court rules that the
relocation of the dealership was supported by good cause, then the
dealership will continue to operate in its current relocated location.
may
Title Basics
Minneapolis
jun
Title Basics
Brainerd
10
15
visit
www.mada.org
for details, registration
and a complete list of
Upcoming Events and
Training
Minnesota Supreme Court... continued on page 2
Scott Lambert, Executive Vice President • 200 Lothenbach Ave. • West St. Paul, MN 55118 • (651) 291-2400 • 1-800-652-9029 • FAX (651) 291-2894
Legislative News
2016 Minnesota Legislative Session Kicks-Off
Minnesota’s 2016 Legislative Session officially
convened in St. Paul on Tuesday, March 8. On
the docket are crafting a large capital investment
(bonding) package, and two carry over issues
from the last session: transportation and taxes.
Prospects for passing both a major highway
funding bill without tax increases along with
significant and permanent tax reform dwindled
with the announcement of the state’s February
Budget Forecast. What had been estimated as a
$1.2 billion dollar surplus last November has been
downgraded to a $900 million surplus, leaving
less revenues to accomplish both tasks in 2016.
Legislators will be making these decisions in the
context of an election season. All 201 House
and Senate seats will be on the ballot in the 2016
general election, adding an increased element
of partisanship as Republicans and Democrats
work to deliver on their priorities before hitting the
campaign trail.
Two “New” Faces in St. Paul
On February 9, Special Elections were held in
Senate District 35 and House District 50B to fill
vacancies. Former State Representative Jim
Abeler (R-Anoka) handily defeated first a primary
challenger and then a DFL opponent to return
MADA will continue to engage in issues it followed to St. Paul as a state senator. The outcome
last session: preventing tax increases on the sale in 50B was more surprising, as Realtor and
of new motor vehicles, promoting an incentive
political newcomer Chad Anderson pulled off a
program for electric vehicles, encouraging
Republican victory in a heavily-DFL district over
support for vocational education, and reforming
Bloomington City Councilor Andrew Carlson.
the Met Council. Additionally, the Association
will be taking the lead to prohibit manufacturers
from unfairly penalizing dealers when vehicles are
sold for export and to discourage the practice of
insurance steering.
visit us online at
www.mada.org
Minnesota Supreme Court... continued from cover
The Minnesota Automobile Dealers Association is a
non-profit trade association dedicated to the progress of the retail auto
industry in Minnesota.
President
Mike Saxon, Inver Grove Ford Lincoln, Inver Grove Heights
President-Elect
Rick Jensen, Jensen Motors, Inc., New Ulm
Treasurer
Michael Stanzak, Key Cadillac, Inc., Edina
Secretary
Peter Kolar, Kolar Toyota Scion, Duluth
Executive Vice President
Scott Lambert, MADA Executive Vice President
200 Lothenbach Avenue • West St. Paul, MN 55118
Metro: 651-291-2400 • Toll Free: 800-652-9029
FAX: 651-291-2894 • Web site: http://www.mada.org
March 2016 / Page 2
If the district court rules that the relocation was
not supported by good cause, then the court
may order the dealership closed and/or award
monetary damages to Wayzata Nissan.
Wayzata Nissan sought an injunction on March
16, 2016 to stop the Eden Prairie location from
operating the dealership pending the outcome
of the good cause hearing. The injunction was
denied and Eden Prairie will remain in operation
at least until the good cause hearing is held and a
final decision has been made.
Here’s a link to the decision.
http://bit.ly/MADA-Wnissan
Industry News
FTC Releases Top 10 Fraud Complaint Categories
The Federal Trade Commission (FTC) released its annual report of the Top 10 fraud complaint
categories for 2015. Based on over 3 million complaints, the “winners” are:
Rank/Category 1. Debt Collection 2. Identity Theft
3. Impostor Scams 4. Telephone & Mobile Services 5. Prizes, Sweepstakes & Lotteries
6. Bank and Lenders
7. Shop-at-Home & Catalog Sales
8. Auto-Related Complaints 9. Television & Electronic Media
10. Users & Reporters to Credit Bureaus
Number 897,665 490,220 353,770 275,754 140,136 131,875 96,363 93,917 47,728 43,939 Percent
29%
16%
11%
9%
5%
4%
3%
3%
2%
1%
Florida, Georgia and Michigan reported the highest per capita rates of consumer fraud complaints.
Minnesota ranked low at 39th.
Minnesota had a total of 969 auto related complaints in 2015. The “auto-related” category is broad
and includes claims about auto warranties and general dissatisfaction with service work performed by
both dealers and independent repair shops. The category also includes alleged price fixing and price
gouging by gas stations and oil companies.
Services News
Legal News
Certain retail installment sales contracts forms
that you buy from MADA Services are changing.
The “Late Fee” contracts and the “Late Fee with
Arbitration” contracts are being revised with a
number of mandatory market changes. The
current versions will not be available after May 31,
2016.
According to news reports last month, a
fraudulent website tried to solicit deposits via
prepaid debit cards by deceiving consumers into
thinking they were transacting with Import Auto
Sales - a used car dealership in St. Louis Park.
The fake website displayed a similar business
name and Import Auto Sales’ physical address.
Apparently a customer became suspicious when
asked to obtain a prepaid Visa card and use the
card to submit a $1000 deposit.
Modified Installment Sales
Contracts Coming
The new versions will require some programming
changes. Please contact MADA Services at
651-291-2400 to get samples of the new contracts
for programming.
Fake Dealer Website Tries
to Bilk Customers
Dealers may want to Google their store name and
address from time to time and see what comes
up.
March 2016 / Page 3
Legal News
U.S. Supreme Court Declines to Hear Connecticut
Warranty Reimbursement Case
For more than three years, the Alliance of
Motor Vehicle Manufacturers (Alliance) has
been challenging Connecticut’s Warranty
Reimbursement law arguing that the law violates
several provisions of the U.S. Constitution.
The Connecticut law, supported by the state’s
dealers, sets forth strict reimbursement formulas
and recoupment prohibitions in an attempt to
legislate fair compensation for dealers and has
consistently been upheld by the lower courts. On
March 7, 2016 the U.S. Supreme Court denied the
Alliance’s petition for a writ of certiorari, meaning
the Alliance has exhausted its last-chance appeal
to the highest court in the land. Connecticut’s
warranty reimbursement law will stand.
Legal News
Minnesota Dealers Eligible to Participate in Antitrust
Settlement
A Federal Court in Michigan approved the first wave of settlements in class actions dealing with
bid-rigging and price-fixing of component parts of automobiles. Dealerships in 29 states - including
Minnesota - are eligible to share approximately $35 million available for distribution to auto dealers in
various settlement classes.
Claims must be submitted by March 31, 2016. The settlement website is
www.autodealersettlement.com.
According to information received from NADA,
• The claims filing process has been simplified. Dealers are permitted to use their yearend OEM statements of automobiles sold or leased during a calendar year as a proxy for
model year purchases.
• A specific individual - Dewitt “Sparky” Lovelace, Class Counsel - has been designated as
a contact for dealers. His phone number is (850) 837-6020 and his email is
[email protected]. His office will answer any questions from dealers and help
dealers fill out a claims form at no cost to the dealer.
MADA News
MADA Submits Comments Supporting Franchise Laws
As reported here last month, the Federal Trade Commission (FTC) held a one-day public workshop in
January to explore the pros and cons of state laws which regulate the treatment of new vehicle dealers
by motor vehicle manufacturers.
In response to the FTC’s request for additional written comments, Scott Lambert, MADA executive
vice president, submitted a letter on behalf of MADA members strongly supporting the public policy
objectives of the Minnesota Motor Vehicle Franchise Protection Law “to protect consumers and
promote a free and competitive marketplace.” The letter can be found on the website at
http://bit.ly/MADAftcws
March 2016 / Page 4
Minnesota Auto Outlook
Covering the Minnesota automotive market
Released by:
Minnesota Automobile
Dealers Association
Data thru January 2016
Minnesota New Retail Car and Light Truck Registrations
Most Recent Two Months
12/14 &
12/15 &
1/15
1/16*
34,757
31,608
11,362
9,118
23,395
22,490
Industry Total
Cars
Light Trucks
Annual Totals
Annual Market Share
%
change
-9.1%
-19.8%
-3.9%
2014
213,557
77,875
135,682
2015
211,079
70,157
140,922
%
change
-1.2%
-9.9%
3.9%
2014
2015
change
36.5
63.5
33.2
66.8
-3.3
3.3
Japanese Brands
Toyota
Honda
Nissan
Other
11,507
3,924
2,880
1,868
2,835
10,804
3,839
2,793
1,526
2,646
-6.1%
-2.2%
-3.0%
-18.3%
-6.7%
74,448
26,551
19,790
11,401
16,706
72,301
25,677
18,877
11,078
16,669
-2.9%
-3.3%
-4.6%
-2.8%
-0.2%
34.9
12.4
9.3
5.3
7.8
34.3
12.2
8.9
5.2
7.9
-0.6
-0.2
-0.4
-0.1
0.1
Domestic Brands
General Motors
Ford
Chrysler
Other
19,168
8,350
6,269
4,505
44
17,211
7,789
5,462
3,922
38
-10.2%
-6.7%
-12.9%
-12.9%
-13.6%
112,747
45,973
38,556
28,028
190
113,592
48,366
38,068
26,911
247
0.7%
5.2%
-1.3%
-4.0%
30.0%
52.8
21.5
18.1
13.1
0.1
53.8
22.9
18.0
12.7
0.1
1.0
1.4
-0.1
-0.4
0.0
European Brands
Volkswagen
BMW
Mercedes
Other
2,111
907
591
348
265
1,906
802
514
307
283
-9.7%
-11.6%
-13.0%
-11.8%
6.8%
13,088
6,258
3,234
2,181
1,415
12,553
5,988
2,810
2,067
1,688
-4.1%
-4.3%
-13.1%
-5.2%
19.3%
6.1
2.9
1.5
1.0
0.7
5.9
2.8
1.3
1.0
0.8
-0.2
-0.1
-0.2
0.0
0.1
Korean Brands
1,971
1,687
-14.4%
13,274
12,633
-4.8%
6.2
6.0
-0.2
Brands included above: Domestic Brands: GM (Buick, Cadillac, Chevrolet, and GMC), Ford (Ford and Lincoln), Chrysler (Chrysler, Dodge, Jeep, and Ram). Japanese: Toyota (Toyota,
Lexus, and Scion), Honda (Honda and Acura), Nissan (Nissan and Infiniti), Other (Mazda, Mitsubishi, and Subaru). European: VW (Audi, Bentley, Porsche, and Volkswagen), BMW
(BMW, Rolls Royce, and MINI), MB (Mercedes Benz and smart), Other (Alfa Romeo, Aston Martin, Ferrari, Fiat, Jaguar, Land Rover, Lotus, Maserati, and Volvo). Korean: Hyundai and Kia.
*Figures for January 2016 were estimated by Auto Outlook. Data Source: IHS Automotive.
Percent Change in Three Month Moving Average of
New Retail Registrations versus Same Period Year Earlier
% change vs. year earlier
10.0%
5.0%
7.2%
7.2%
3.4%
3.2%
-9.9%
State
0.5%
0.0%
-5.0%
3.9%
-1.2%
-2.1%
-2.8%
-5.5%
-10.0%
Percent Change in State and U.S.
New Retail Light Vehicle Markets
2015 vs. 2014
-6.8% -6.2%
-7.7%
Cars
-3.8%
-15.0%
Trucks
U.S.
13.2%
-20.0%
Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16*
Last month in period
-15.0%
The graph above provides a clear picture of the trending direction of the state market. It shows the year-overyear percent change in the three month moving average of new retail light vehicle registrations. The three
month moving average is less erratic than monthly registrations, which can fluctuate due to such factors as
the timing of manufacturer incentive programs, weather and title processing delays by governmental agencies.
*Figures for January 2016 were estimated by Auto Outlook. Data Source: IHS Automotive.
-5.0%
5.0%
15.0%
25.0%
The graph above compares the change in new retail car and light
truck registrations in both the state and U.S. markets.
Data Source: IHS Automotive.
Data Information
All data represents new vehicle retail registrations in Minnesota and excludes fleet and wholesale transactions. Please keep in mind that monthly registration figures can occasionally
be subject to fluctuations, resulting in over or under estimation of actual results. This usually occurs due to processing delays by governmental agencies. For this reason, the yearto-date figures will typically be more reflective of market results.
Data Source: IHS Automotive.
March 2016 / Page 5
Minnesota Auto Outlook
Data thru January 2016
Minnesota
New Retail Light Vehicle Registrations
Registrations
TOTAL
Acura
Audi
BMW
Buick
Cadillac
Chevrolet
Chrysler
Dodge
FIAT
Ford
GMC
Honda
Hyundai
Infiniti
Jaguar
Jeep
Kia
Land Rover
Lexus
Lincoln
Mazda
Mercedes
MINI
Mitsubishi
Nissan
Other
Porsche
Ram
Subaru
Tesla
Toyota
Volkswagen
Volvo
2014
213,557
1,657
1,759
2,700
4,120
1,443
32,139
3,637
6,970
252
37,410
8,271
18,133
6,115
877
70
9,504
7,159
345
2,359
1,146
4,429
2,154
534
2,154
10,524
196
285
7,917
10,113
98
24,192
4,214
681
2015 % change
211,079
-1%
1,435
-13%
1,669
-5%
2,353
-13%
3,911
-5%
1,331
-8%
34,303
7%
3,775
4%
5,509
-21%
232
-8%
36,966
-1%
8,821
7%
17,442
-4%
5,729
-6%
769
-12%
63
-10%
9,729
2%
6,904
-4%
535
55%
2,536
8%
1,102
-4%
4,482
1%
2,044
-5%
457
-14%
1,876
-13%
10,309
-2%
185
-6%
284
0%
7,898
0%
10,302
2%
193
97%
23,141
-4%
4,035
-4%
759
11%
State Market Share for Top 15 Selling Brands
2015 vs. 2014
Market share
2014
2015
0.8%
0.8%
1.3%
1.9%
0.7%
15.0%
1.7%
3.3%
0.1%
17.5%
3.9%
8.5%
2.9%
0.4%
0.0%
4.5%
3.4%
0.2%
1.1%
0.5%
2.1%
1.0%
0.3%
1.0%
4.9%
0.1%
0.1%
3.7%
4.7%
0.0%
11.3%
2.0%
0.3%
0.7%
0.8%
1.1%
1.9%
0.6%
16.3%
1.8%
2.6%
0.1%
17.5%
4.2%
8.3%
2.7%
0.4%
0.0%
4.6%
3.3%
0.3%
1.2%
0.5%
2.1%
1.0%
0.2%
0.9%
4.9%
0.1%
0.1%
3.7%
4.9%
0.1%
11.0%
1.9%
0.4%
17.5
17.5
Ford
16.3
Chevrolet
15.0
11.0
11.3
Toyota
8.3
8.5
Honda
Subaru
4.9
4.7
Nissan
4.9
4.9
4.6
4.5
Jeep
GMC
4.2
3.9
Ram
3.7
3.7
3.3
3.4
Kia
Data source: IHS Automotive.
Top ten ranked brands in each percent change category are shaded green.
Hyundai
2.7
2.9
Dodge
2.6
3.3
2015
2014
This report is sponsored by the Minnesota Automobile Dealers Association
and produced by Auto Outlook (800-206-0102).
Auto Outlook, Inc. is not responsible for management decisions based on
the content of Minnesota Auto Outlook. Copyright Auto Outlook, February
2016.
Reproduction, including photocopying of this publication in whole or in
part, is prohibited without the express permission of Auto Outlook, Inc.
Any material quoted must be attributed to Minnesota Auto Outlook, published by Auto Outlook, Inc. on behalf of the Minnesota Automobile Dealers Association and must also include the statement: “Data Source: IHS
Automotive.”
March 2016 / Page 6
Mazda
2.1
2.1
Volkswagen
1.9
2.0
Buick
1.9
1.9
0.0
2.0
4.0
6.0
8.0
10.0
Market Share
Data source: IHS Automotive.
12.0
14.0
16.0
18.0
Member News
We regret that the address for Lupient Automotive Group in the
Multi-Dealership listing in the 2016 Yearbook & Buyer’s Guide was
listed incorrectly. The address of the Lupient Automotive Group is
7100 Wayzata Blvd, Suite 200, Golden Valley, MN 55426. We are
sorry for this error.
Ronald Erickson, who owned Erickson Chevrolet in Dawson,
has passed away.
Endorsed Service & Vendors
Check Guarantee/Credit Card Processing
FIS / Certegy
Collections
Springer Collections
Computerized Vehicle Registration
CVR
Dealer Bond Program
Ensure Agency
visit us online at
www.mada.org
Disability Income Insurance & Section 125
Cafeteria Plans
American Fidelity Assurance
F&I Products
Protective
Fleet Fueling Program
SuperAmerica
Group Health Insurance
Blue Cross Blue Shield of MN
Delta Dental
ReliaStar Life
Hole-In-One Insurance
Hole-In-One-USA
Lighting
LED Supply Company
Office Supplies
Innovative Office Solutions
OSHA, EPA & DOT Compliance/Training
ComplyNet Corporation
Pre-Paid Legal, Jim Gavin
Identity Theft Shield &
Pre-Paid Legal Services
Uniforms and Linen Services
AmeriPride Linen & Apparel
Services
Workers Compensation
Ensure Agency
MADA Services sells a wide variety of
products directly to the dealers including
business forms, clothing and promotional
items. For a full review of options, contact
your sales representative at 651-291-2400
or go to www.mada.org
March 2016 / Page 7
200 Lothenbach Avenue
West St. Paul, MN 55118
ADVOCACY • EXPERTISE • EDUCATION • COMMUNICATION
MADA NEWS • March 2016
MADA News
Reception at NADA
Start out your NADA Convention experience
by joining your Minnesota peers at the premier
“Ultra-lounge” at the Bellagio. This is a change of
pace for our member gathering at the Convention.
Due to NADA’s reformatting of the Convention
schedule, MADA’s usual Sunday brunch is now
an evening celebration. Please put this event on
your calendar and join us for an unique evening
at this beautiful location.
You’re Invited
to
COCKTAIL RECEPTION
THURSDAY, MARCH 31, 2016
7pm-9pm at the
B A R
Thank you to our sponsor:
’s
&
L O U N G E
in the
BELLAGIO
LAS VEGAS
Scott Lambert, Executive Vice President • 200 Lothenbach Ave. • West St. Paul, MN 55118 • (651) 291-2400 • 1-800-652-9029 • FAX (651) 291-2894
Education
Fax Registration
FAX REGISTRATION TO: 651-291-2894
Denise Anderson [email protected]
The Certified
Title &
Registration
Program*
Title Basics
Title Basics
Class Options
Sales Tax
9:00 a.m. - 10:00 a.m. $129
New to Fleet
10:30 a.m. - 12:30 p.m. $129
Circle Preferred Date
May 10, 2016
May 10, 2016
Minnesota Titles and Transfers May 10, 2016
1:00 p.m. – 3:00 p.m. $129
Class Options
Circle Preferred Date
Title Basics – Minneapolis
May 10, 2016
Class Options
Title Basics – Brainerd
Circle Preferred Date
9:30 a.m. - 11:30 a.m. $199
9:30 a.m. - 11:30 a.m. $199
Jun 15, 2016
Location
Doubletree by Hilton Park Place
1500 Park Place Blvd
Minneapolis, MN 55416
Location
Doubletree by Hilton Park Place
1500 Park Place Blvd
Minneapolis, MN 55416
Location
To Be Determined
Name__________________________________________ Title____________________________
Name__________________________________________ Title____________________________
Dealership______________________________________ Customer ID #____________________
Address________________________________________________________________________
Phone______________________________ E-mail______________________________________
*Lunch is included, sponsored by CVR.
For Information on these classes or to register online go to www.mada.org/training