Motor Vehicle Sales by Manufacturers' Affiliates

The bill amends the definition of a "manufacturer" of new motor vehicles to include an affiliate of a manufacturer and defines the term "affiliate". As used in the bill, an affiliate manufactures, distributes, sells, or offers for sale or lease new motor vehicles to retail consumers.

The bill clarifies that the provision in current law prohibiting a manufacturer from owning, operating, or controlling a motor vehicle dealer or used motor vehicle dealer in the state also includes competing against a motor vehicle dealer, motor vehicle dealer-operated service center, or used motor vehicle dealer in the retail sale, lease, retail service, or warranty service of motor vehicles . Further, the bill extends the prohibition to include motor vehicle dealer-operated service centers in the state.

Current law does not prohibit ownership, operation, or control of one or more motor vehicle dealers by a manufacturer if the manufacturer manufactures only electric vehicles and has no franchised dealers of the same line-make in the state. Under the bill, the ownership, operation, or control of one or more motor vehicle dealers by a manufacturer is not prohibited if the manufacturer manufactures any vehicle and has never had franchised dealers of any line-make in the state.

Further, the bill does not prohibit:

• The service or repair of motor vehicles owned by a manufacturer before delivery to a motor vehicle dealer;
• A manufacturer from offering or providing updates or repair to software that is transmitted remotely at no cost to the retail consumer; or
• Service of fleet vehicles in certain circumstances.

The bill also prohibits a powersports vehicle manufacturer from owning, operating, controlling, or competing against a powersports vehicle dealer, a powersports vehicle dealer-operated service center, or used powersports vehicle dealer in the retail sale, lease, retail service, or warranty service of powersports vehicles in the state. The prohibition does not include the service or repair of powersports vehicles owned by a manufacturer before delivery to a powersports vehicle dealer or from offering or providing updates or repairs to software that is transmitted remotely at no cost to the retail consumer.

(Note: Italicized words indicate new material added to the original summary; dashes through words indicate deletions from the original summary.)

(Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)