NJCAR has retained BSM to file a complaint in New Jersey federal court challenging the Lincoln Commitment Program as a violation of the New Jersey franchise protections.
The New Jersey Lincoln dealers overwhelmingly objected to the requirement in the Lincoln Commitment Program to construct an exclusive Lincoln facility in order to be eligible for very lucrative per vehicle incentives. Most Lincoln dealers do not believe that the economic circumstances surrounding the Lincoln franchise, particularly limited market share, can financially justify the expense of providing the exclusive facility. Yet, for those dealers who cannot reasonably justify the expense of an exclusive Lincoln facility, being forced to forego the per vehicle incentives places those dealers at a competitive disadvantage in vehicle retail pricing.
The New Jersey Legislature anticipated the competitive disadvantage that per vehicle incentives could cause by including a strict prohibition in New Jersey law on paying different incentive amounts to different dealers associated with the same vehicle regardless of any conditions that the OEM places on the receipt of those incentives. Accordingly, the Lincoln Commitment Program violates New Jersey law.
The lawsuit challenging the Lincoln Commitment Program is in the early stages of the case. We will update our progress as developments warrant.