Recently, NNA has issued updated facility guides to dealers across the country. As in years past, these guides are based upon projected planning volume and units in operation numbers which are not detailed in the facility guide update. NNA fails to provide the specific calculation used to arrive at these numbers which are the basis for the required facility size and employee numbers listed on the guide. All of the updated guides reviewed by BSM attorneys reflect an increase in expected planning volume and UIOs such that the dealers’ required facility size and staffing have increased, in some cases dramatically.
Dealers should be aware of their rights under state franchise laws as it relates to manufacturer-mandated facility requirements. Many states prevent a manufacturer from requiring exclusive facilities or an increase in the size of the facility unless justified based upon the specific circumstances of the dealership’s market. Nissan should be asked to support its updated facility guides, and in particular the projected planning volume and UIOs for the dealer’s market, before asking the dealer to consider whether increases in the facility size and staffing are financially viable. Considering that many industry experts are predicting a leveling off or decline in new vehicle sales and further predicting car buyers to do more of their purchasing on-line, it begs the question – how can an increase in facility size be warranted?