Michigan governor signs legislation banning direct sales
Michigan Governor Rick Snyder has signed into law a bill banning direct sales by automakers to consumers in the state. The action ended a high-stakes faceoff between the dealers and General Motors, which announced its support of the bill. In signing the legislation,
Gov. Snyder insisted that the new law simply clarifies existing law that already bans such sales. Tesla, which initiated the direct sales controversy in Michigan, as they have in other states across the country, was relegated to the sidelines, grumbling that the bill was rammed through without public debate.
Maryland, Arizona, and Texas also ban direct sales. In Virginia, Tesla has a showroom in Tysons Corner, from which no sales or test drives are permitted. The company has been granted permission to operate a single dealership in Virginia, and the Washington Post has reported that it is eyeing a spot on Tyco Road in Tysons.
The Michigan Automobile Dealers Association told the Detroit News that it had a hand in adding a direct sales amendment to the bill, the paper reports. The legislation was originally introduced to address documentary fees, requiring dealers to charge all customers the same rate or no fees at all. Previously, documentary fees in the state were capped at $200, or 5 percent of the carês price, whichever is less. The Michigan bill was obviously very much broadened.
In Massachusetts, the state Supreme Court last month ruled in favor of Tesla, saying that only dealers of that make in this case, Tesla dealers could challenge a manufacturerês right to sell directly to consumers. That means another automaker, such as a Chinese one, that does not have dealers in the state could open a direct sales store there, attorney Louis Chronowski of Dykema wrote in WardsAuto. Of course, Chronowski said, the court decision would no longer apply if the Massachusetts legislature passed a law banning direct sales.Download Bulletin PDF