OEM GROUP TARGETS FRANCHISE LAWS IN LETTER TO DOJ President’s Message By Marty Milstead, President, MADA A recent move by the Alliance for Automotive Innovation, representing most major automakers, has raised serious concerns for franchised new car dealers across the country. You may have seen the July 16, 2025, Automotive News article titled “Alliance, NADA Clash in ‘Holy War’ Over State Franchise Laws in Justice Department Review.” To read the article, scan the QR code. https://www.autonews.com/retail/an-nadaalliance-doj-franchise-laws-0716/ The Alliance, which represents nearly every major original equipment manufacturer (OEM), submitted a letter to the U.S. Department of Justice’s (DOJ) Anticompetitive Regulations Task Force challenging the very foundation of the dealer franchise system. The National Automobile Dealers Association (NADA) was blindsided by the Alliance, as our national organization was not given the courtesy of a conversation or notice that the letter was being sent. WHAT DID THE ALLIANCE SAY? In their letter, the Alliance claimed that many state-level franchise laws — including those that secure fair warranty reimbursement, protect against the forced addition of new dealers and uphold dealer territory agreements — are outdated, anti-competitive and harmful to consumers. Here’s a direct quote from the letter: “Virtually every state has enacted a series of motor vehicle franchise laws that regulate nearly every aspect of the relationship between motor vehicle manufacturers and their authorized dealers. While the stated purpose of these statutes is to protect consumers, many of these statutes also significantly restrict competition in this industry and can actually harm the consumers they purport to protect.” This action by the Alliance should be alarming to every dealer. 4
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