Monday, 8 September 2014

MPI Changes How It Enforces Rules For Auto Dealers, Garages

By Vera-Lynn Kubinec

When you buy a car at an auto dealership, you want to know whether the dealer has a good track record or a sketchy one. Likewise, if you need to get a safety inspection done on a vehicle, you want to know if you can count on the garage doing the work.

In 2010, the Manitoba government announced a new era of transparency when it said it would start naming car dealerships and garages that ran afoul of regulations.

The move followed a number of stories by the CBC News I-Team that highlighted consumers' problems with buying cars.

But after a steady stream of offending dealers and garages being sanctioned and named on Manitoba Public Insurance's website, the information abruptly stopped coming more than a year ago.

The last time there was a new sanction posted on the site was in April 2013.

So what's going on?

MPI will still publicize sanctions. It's just that it hasn't sanctioned any garages in nearly a year and a half, even though garages and dealers are continuing to run afoul of regulations.

Spokesperson Brian Smiley says the agency has changed the way it enforces the rules for dealers and inspection stations, from a "punitive, adversarial" approach to an educational one.

"That's resulted in no sanctions being listed due to the fact the mechanics, the inspections stations, have realized that education and cooperation is the best way to go. From our perspective we always want to work in partnership with the inspection stations," Smiley told CBC News.

The sanctions that were posted between November 2010 and April 2013 were for wide-ranging offences such as:
  • Inaccurate or incomplete vehicle inspections.
  • Making false statements.
  • Not disclosing a material fact on a vehicle sold.
  • Failing to act with honesty and integrity, including odometer tampering.
The mechanics and dealers had their business permits suspended for periods ranging from three months to five years, and some of them permanently.

Sensing that consumers needed better protection when doing business with garages and auto dealers, the NDP government announced in 2010 that it would amend the Drivers and Vehicles Act to allow publishing the names of offenders and the penalties against them.

The government even said at the time that its legislation had the support of the auto sales industry, including the Manitoba Used Car Dealers Association and the Manitoba Motor Dealers Association.

The minister responsible for MPI, Andrew Swan, announced the change saying, "These amendments provide transparency."

"The protection of consumers must always remain a priority and the publicizing of names and sanctions goes a long way in accomplishing this goal," Swan said in a July 2010 release.

Education the best way, says MPI

So after three years, why did MPI shift away from penalizing the offenders?

"Education is the best way to correct errors that were taking place," Smiley explained.

He said the number of training sessions provided by MPI's Vehicle Standards and Inspections branch has increased from 253 in 2012 to 442 in 2013.

There are about 1,500 authorized inspection stations in the province and nearly that many auto dealers. MPI gets complaints from the public about them.

Smiley said in 2013 there were 178 valid complaints, including 30 against dealers and 148 against garages. Warning letters were issued to 42 operators.

A spokesperson for Swan said the lack of suspensions demonstrates the legislation is working.

"Since the legislation was introduced, many of the inspection stations that weren't offering acceptable services have left voluntarily or because of sanctions," said a government statement to CBC News, noting that complaints from the public have dropped significantly.

The province said the types of infractions also are tending to be less serious.

Asked if the new approach is "softer", Smiley disagreed. He said the public can have confidence in the results.

"The consumer can take satisfaction in knowing that Manitoba Public Insurance is working very closely with the inspection stations," he said.

But what about the transparency the minister talked about in 2010?

"Well, there is transparency in the sense that if a station does receive a show-cause hearing and is suspended and receives a sanction, it is listed on the [MPI] website," Smiley said.

From the province's viewpoint, nothing has changed and the names of anyone sanctioned will continue to appear on the website when warranted.


Resource: 
MPI Changes How It Enforces Rules For Auto Dealers, Garages
MPI Changes How It Enforces Rules For Auto Dealers, Garages

Thursday, 4 September 2014

GA auto dealers want Tesla's sales license revoked for selling too many cars

By David Yirchott

Tesla Motors and their Model S electric car are becoming more popular among Atlantans. But the company is upsetting other Georgia automobile dealerships. Those dealerships are saying Tesla is not complying with a state law that regulates how many vehicles a dealership can sell. So, right now, it is a little east coast versus west coast argument with the California automaker.

The Georgia Automobile Dealers Association filed a complaint claiming Tesla's sales out of the Marietta store violate Georgia laws. That industry group is requesting that Tesla's selling license in Georgia be revoked.

The state law allows for a maximum of 150 vehicle sales at any automaker-owned stores. According to the complaint, Tesla has apparently sold 173 Model S sedans there during the 8-month period from October 2013 to June 2014.

Tesla is not going down without a fight. They say that under their license agreement sales figures are measured by the calendar year.

I reached out to both the Marietta store and Tesla Headquarters to find out how many vehicles have been sold since the beginning of this year. Neither would answer my question.


Resource: 
GA auto dealers want Tesla's sales license revoked for selling too many cars
GA auto dealers want Tesla's sales license revoked for selling too many cars

Wednesday, 3 September 2014

Georgia dealers want Tesla store shuttered for selling too many Teslas

By Steven Lang

Imagine owning the most popular automaker in the United States. Now imagine a special ​interest group eliminating your ability to serve over 10 million Americans unless you did business with their unique cartel.

That's in essence what happened right before Labor Day weekend, when the Georgia Auto Dealer Association filed a petition with state officials seeking to cancel Tesla's license to sell its cars in the state of Georgia.

Tesla's crime? Selling 173 cars directly from a factory-owned store located 25 miles away from Atlanta, the only Tesla retail location in Georgia. The dealers say Tesla can only sell 150 cars a year from the shop under state rules, and therefore should lose its dealer license entirely.

“It’s just very simple -- we want them to comply with the law the way others are,” Bill Morie, president of the Georgia dealers association, told Automotive News.

The elimination of one store in a state of 10 million people may seem like a minor blow given that there is still a five-month waiting list for the Tesla Model S. But the long-term cost to Tesla may be far greater than most consumers and investors would imagine.

If the dealers prevail, here's where the nearest Tesla outlets would be, and their respective distances from metro Atlanta:

Nashville: 4 hours

Tampa: 6 hours

St. Louis: Over 8 hours.

How many of you would be willing to travel four hours each way just to look at one car?

As a car dealer, I have become well acquainted with the age-old saying "people buy with their eyes," and there's a lot of truth to it. The reason why car dealers pay millions of dollars for prime commercial real estate is because all those eyeballs browsing up and down the road translate into sales.

People buy as much from convenience as they do from exposure. Tesla's competitors such as the Chevy Volt and Nissan Leaf are sold at thousands of dealers throughout America, and nearly all of them are located in areas where tens of thousands of consumers go to and fro every day.

These locations give these manufacturers a huge advantage in the new-car marketplace. By fighting Tesla's ability to compete without a dealer network, these manufacturers and dealers have carved out a no-Tesla territory that now stretches through 26 states and 200 million consumers. In those states, Tesla can't sell directly to the public. Many of those states have enacted legislation that would also limit your ability to even test drive a Tesla. Meanwhile, dealers tout the benefits of the current system, such as the video above made by the National Automobile Dealers Association, which never mentions Tesla but warns that going without dealers will only hurt consumers.

This is possible becase special-interest groups in the auto industry have extremely tight relationships with statehouse legislators. These relationships are so well-honed that certain dealer-sponsored legislation can often pass unanimously —even if it will amount to a substantial tax increase for the citizens of that state.

That is exactly what took place in Georgia in 2013. Private sales of motor vehicles used to be non-taxable in the Peach State. A private-party transaction resulted in no taxes charged or collected between the parties. This law made sense, since most car owners are not car dealers. 

Unfortunately for Georgians, the state wanted more revenue. This resulted in the introduction of a "Title Added Value Tax" which meant that everyone would pay a flat 6.5% tax based on a vehicle's value. Everyone paying the same sounds like a fair deal, but in the end that's not what happened.

Georgia dealers that self-finance vehicles (buy-here, pay-here dealers) were given a 2.5% tax reduction that lowered their tax rate to only 4%. Also, trade-ins were allowed to be used as deductions, which gave dealers another edge over private sellers. The bill passed unanimously through the Senate with 95% of House members voting for it as well.

This level of complicity between dealer associations and legislators is what Tesla now has to deal with in 26 states. Every prohibition of direct sales to the general public leaves Tesla with a double-edged sword that harms the company and their consumers.

Either Tesla and Elon Musk can give in, hire dealers, pay them incentives and rebates to market their vehicles which will then be passed onto consumers, and eventually cede creative control over how it sells its product. Or it can pursue the legislative and legal fights, where the needs of common citizens often don't matter.

I'm glad that Tesla has taken the high road. I know a lot of dealers who welcome competition and work hard to earn their customers' loyalty and respect. As a car dealer myself, I just wish more of my peers would accept the tenets of free enterprise.


Resource: 
Georgia dealers want Tesla store shuttered for selling too many Teslas
Georgia dealers want Tesla store shuttered for selling too many Teslas

Tuesday, 2 September 2014

Dealers gear up for record new car registrations in September

by: John Kirwan
Dealers are gearing up for what is expected to be a record September plate-change for new car registrations.

Registrations continue to be driven by a cocktail of attractive PCP and finance deals, low interest rates and strong trade in values for used cars.

Sales in September last year were up 12% to 403,136 units, easily outstripping the 394,806 recorded in the March plate month, traditionally the strongest of the two months.

September 2013 was also the biggest sales month since March 2008, when the market was being kept afloat by the government’s Scrappage Incentive Scheme.

In the year to July, the latest figures available, the market was running 10.1% ahead with 172,907 registrations.

july saw the 29th consecutive month of growth prompting the SMMT to forecast the biggest new car market in 10 years. The rate of growth in July had slowed to 6.6%, following the very strong first half.

The August registration figures are due to be published this week.


Resource: 
Dealers gear up for record new car registrations in September
Dealers gear up for record new car registrations in September

Monday, 1 September 2014

Tesla Banned From Selling Cars By Georgia Car Dealers

By Julie S julie.s@hngn.com

Auto retailers in Georgia filed a petition to the Georgia Department of Revenue to ban Tesla Motors Inc. from selling its sedans within the state.

According to the Georgia Automobile Dealers Association, the electric carmaker is selling more than the allowed number of cars, which violates the state's rules. The group consists of 500 dealerships that want the government agency to revoke Tesla's license to sell.

"It's just very simple -- we want them to comply with the law the way others are," Bill Morie, president of the Georgia Dealers Association, told Automotive News.

Tesla's license to operate in Georgia only allows the company to sell cars manufactured using the specifications that the customer has requested on the vehicle's design. The company is also limited to selling only 150 units per year. The petition highlighted that Tesla has sold more than 173 cars from October 2013 to June 2014 in one outlet in Atlanta.

"It's difficult to find fault in the dealers association point that manufacturers should adhere to the existing laws," Eric Ibara, senior analyst for Kelley Blue Book in Irvine, California told Bloomberg. "With the success of the Model S and the prospect of future Tesla products, it's also not hard to envision a groundswell of Georgia voters petitioning their lawmakers into allowing for the sale of these cars in their state."

This is not the first time that Tesla got involved in complaints like this. The company also had the same issue in New Jersey, Ohio, and Pennsylvania. Tesla CEO Elon Musk defended that the Model S sedans are best sold by their own staff that can provide more information about the vehicle's features and utilities.

Tesla refused to comment about the petition, while the Georgia agency has confirmed that the petition was filed on Friday.


Resource: 
Tesla Banned From Selling Cars By Georgia Car Dealers
Tesla Banned From Selling Cars By Georgia Car Dealers