California dealer blocks new VW franchise image

A Volkswagen dealer based near Los Angeles is close to block the construction of a franchised VW store less than nine miles away.

A December 13 decision from the California New Motor Vehicle Board read that Ontario, California, VW dealer Gary Sherman’s protest of a proposed new dealership in Montclair, California, was valid.

The board’s decision overrides a previous decision by an administrative law judge that Sherman’s protest lacked merit. “It’s not very common to win these kinds of cases. In the history of the statute, probably less than 10 percent of all dealers who file a protest in a case like this win it,” Mike Flanagan, Sherman’s lawyer, was quoted by the Automotive News.

Sherman based his case on a California Motor Vehicle statute which gives the right to an existing dealership to protest when a manufacturer wants to put a dealership in within 10 miles of the existing one.
In a similar case this fall, the California DMV ordered Chrysler to sell a new company-owned store in L.A. and to pay a $955,000 fine to settle a complaint that its store was competing unfairly with several other franchised dealerships within 10 miles. VW has 45 days to appeal the ruling.