We continue to see Kia Motors America issue Notices of Termination to dealers across the United States. In the last three months alone, BSM has been retained by Kia dealerships in Florida, Tennessee and Washington to assist in defending against KMA’s attempt to terminate their Kia franchise. Previously, BSM had defended Kia franchise terminates in Connecticut, Florida and Ohio. All termination actions have been based upon alleged deficient sales performance.
Like other OEM sales performance measurements, KMA’s Dealer Sales Efficiency (DSE) fails to take into account specific dealer and market circumstances which could adversely impact a dealership’s ability to sell vehicles. The DSE measurement is also inherently faulty as it is based upon the concept that all dealers in a given state should be at or above average market share which in practicality is not possible. Instead, at any given time, a large percentage of dealers are above and large percentage of dealers are below the average market share. Likewise, the DSE measurement can be inflated for some dealers as KMA does not assign all census tracts in the state to a Kia dealer. Depending upon the distance from the nearest dealership a census tract can go unassigned which can skew a dealer’s sales performance numbers.
We look forward to vigorously defending these Kia dealerships against KMA’s attempt to eliminate their franchises.