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October 17, 2019Cart

Business

by Westchester County Business Journal
by WCBJ

White Plains dealership sues Mazda to stop franchise termination

Mazda White Plains has sued Mazda Motor of America to stop it from terminating its franchise agreement.

The Premier Collection, owner of the Mazda franchise, is in the process of demolishing and rebuilding showrooms for three car brands, according to the lawsuit filed last month in Westchester Supreme Court. It had asked for Mazda’s consent to move new car sales to a temporary location, but Mazda refused.

The dispute concerns The Premier Collection’s plans to build showrooms that comply with auto manufacturers’ standards.

Mazda America requires dealers to provide a “Retail Evolution 3” facility that provides a certain appearance, amenities and layout.

Premier also operates Subaru and Volvo dealerships at the same location, 258 E. Main St. in Elmsford, that also must provide “image compliant facilities.”

The East Main Street site is too small to satisfy standards for all three car companies. So Premier, the lawsuit states, is demolishing everything and setting up temporary operations elsewhere.

Premier had already been running used car sales and its Mazda parts and service operation at 235 Tarrytown Road in White Plains. The plan was to also temporarily move new car sales to that site.

Subaru and Volvo would move to 500 Tarrytown Road and then back to Main Street when their new showrooms are built. Then 500 Tarrytown Road would become the permanent site for the Mazda franchise.

Under the dealer agreement and state law, Mazda White Plains must get the automaker’s consent to relocate operations. Mazda rejected the request in June.

The dealer notified Mazda last month that it would have to temporarily halt new car sales. Mazda America responded on Oct. 12 that it was terminating the dealer agreement in 15 days.

“While Mazda previously indicated it would be amenable to White Plains moving,” the complaint states, “it suddenly backtracked and claimed that the permanent relocation premises was too small.”

The new location, previously used by a Nissan dealer, according to the complaint, is larger than the Main Street location.

Mazda White Plains said state law bars automakers from forcing dealers to build a certain type of facility, withholding consent to relocate or terminating a franchise agreement “without due cause and absent of good faith.”

By rejecting the request to relocate temporarily, the dealer claims, Mazda forced it to suspend new car sales.

Mazda White Plains also has challenged Mazda’s relocation rejection with the state Department of Motor Vehicles, claiming that the automaker violated the New York Franchised Vehicle Dealer Act. A hearing is scheduled for Nov. 16.

Mazda America has filed to move the lawsuit to federal court in White Plains.

The law firm representing Mazda did not respond to a request for comment.