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The Lesson In Genesis

By: Nicholas A. Bader

THE LESSON IN GENESIS

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There is strength in numbers.  When dealers and dealer associations join together to push back against unfair practices of OEMs, good things happen.  The most recent case where this was demonstrated was the separation of the Genesis line-make from Hyundai.  Over a several month process, the network strategy evolved more and more favorably for dealers due in no small part to the efforts of dealers and their advocates.

When Genesis originally announced its plans for a dealer body, it planned only 100 dealers in the entire country (with some states having no authorized dealers) and a requirement that dealers construct a new image-compliant facility.  But, after dealers organized and pushed back, plans were changed and, ultimately, all Hyundai dealers were given the opportunity to become a Genesis dealer.  Several state dealer associations and dealer advocates participated in this effort to shape the future of Genesis. The fight in one state–Florida—was extremely successful and further emphasized the benefits of organized efforts.  The Florida Automobile Dealers Association (FADA) and BSM attorneys, along with prominent individual Hyundai dealers, both worked to change the terms of the Dealer Sales and Service Agreement (DSSA) that Genesis intended to require its dealers to sign including new obligations that far exceeded those present in the Hyundai DSSA.  Both organizations met with Florida DHSMV officials, made phone calls, and wrote letters challenging the excessive requirements Genesis sought to impose aimed at achieving a “premium luxury” experience at a great cost to dealers. The result of these efforts were significant revisions to the Genesis DSSA used in Florida that rolled back the additional obligations to match those in the existing Hyundai DSSA.

The Genesis roll-out, as meandering as it was, provides a lesson to dealers and their advocates as we move into the new year in an ever-evolving industry—it is crucial that we scrutinize changes that the OEMs attempt to enact and work together to enforce laws and regulations intended to protect this industry and its consumers.  In most instances, these battles are best fought together and when that happens, great success can be achieved.