While the court’s decision could have huge ramifications for current state motor vehicle laws, it could also decide whether auto manufacturers will face resistance throughout the United States. Joseph Marino, an analyst for Sterling, Virginia-based Current Analysis, told the E-Commerce Times that no matter how the court rules, automakers like Ford will not be eliminating dealers anytime soon. “Old habits won’t change, because there are no incentives or dynamics to change them,” Marino explained. “People still need to see a car before they buy it.” Meanwhile, Texas officials contend that Ford breached state regulations when it decided 18 months ago to sell used cars directly to consumers through www.fordpreowned.com, its used car Web site. Ford trucks and cars with expired leases are listed for sale on the site. Dealers Handled Sale However, Ford claims that it did not violate Texas regulations, because it sent cars directly to a local dealer to close deals. Once the sale was consummated, Ford then paid the participating dealer a percentage of the purchase price of the vehicle sold. Still, the Texas Motor Vehicle Division maintains that even though the local dealer got a piece of the action, Ford was acting as a car dealer by soliciting consumers via the Internet. Dealers Told To Stop Ford sent a letter to its dealers in November, informing them that participating in the online program was illegal. Dealers were told to stop immediately or face a possible penalty of as much as $10,000 (US$) per day. Ford has shut down the site, but is seeking an injunction in the U.S. district court in Austin to overturn the agency’s edict. According to Automotive News, Ford’s request is scheduled for a January 6th hearing. Earlier this year, a Texas law designed to keep manufacturers out of the retail car business forced Ford to nix a plan it had to consolidate dealerships in the Fort Worth area. While the court’s decision could have huge ramifications for current state motor vehicle laws, it could also decide whether auto manufacturers will face resistance throughout the United States.
Joseph Marino, an analyst for Sterling, Virginia-based Current Analysis, told the E-Commerce Times that no matter how the court rules, automakers like Ford will not be eliminating dealers anytime soon.
“Old habits won’t change, because there are no incentives or dynamics to change them,” Marino explained. “People still need to see a car before they buy it.”
Meanwhile, Texas officials contend that Ford breached state regulations when it decided 18 months ago to sell used cars directly to consumers through www.fordpreowned.com, its used car Web site. Ford trucks and cars with expired leases are listed for sale on the site.
Dealers Handled Sale
However, Ford claims that it did not violate Texas regulations, because it sent cars directly to a local dealer to close deals. Once the sale was consummated, Ford then paid the participating dealer a percentage of the purchase price of the vehicle sold.
Still, the Texas Motor Vehicle Division maintains that even though the local dealer got a piece of the action, Ford was acting as a car dealer by soliciting consumers via the Internet.
Dealers Told To Stop
Ford sent a letter to its dealers in November, informing them that participating in the online program was illegal. Dealers were told to stop immediately or face a possible penalty of as much as $10,000 (US$) per day.
Ford has shut down the site, but is seeking an injunction in the U.S. district court in Austin to overturn the agency’s edict. According to Automotive News, Ford’s request is scheduled for a January 6th hearing.
Earlier this year, a Texas law designed to keep manufacturers out of the retail car business forced Ford to nix a plan it had to consolidate dealerships in the Fort Worth area.
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I have been in the auto industry for over 7 years.
I AM currently a Finance manager at a Ford store and have worked for ford dealers since I have been in the business. Ford’s preowned website is just an easy way for a customer from home to choose a vehicle. Ford is not selling them, they are providing a service. You still have to go to the dealership to buy the vehicle (finance, buying extended warranty), the dealerships still make the profit. The store I work at loves the program. The sale process is smooth, and the customers are very at ease. They feel no pressure from salesman or anyone. If Texas thinks Ford is selling cars illegally, then they should ban all vehicle websites, because they all are trying to sell the car, such as Auto Brokers. Auto brokers buy the vehicles, and the customer never goes to the dealerships. For financing you can go on any website vehix.com and get financed without even going to a dealership. Texas is just trying to put themselves on the map by suing a big-name company with no basis other than it being the big bad FORD MOTOR COMPANY!!!!!!!!
If there is a state law, is it in place to PROTECT the Ford dealers in the state of Texas that is regulate who can sell automobiles?? What the law sounds like to me is the Texas auto dealerships have a law on the books to prevent a major auto manufacture from selling cars and truck to the publc in the state of Texas. Well I can understand that to a degree but the problem I have is the excess mark up of so many of the dealers and the false and miss leading advertisement that dealers use to take advantage of the Texas comsumers. Sounds like I need to write my state representive in Texas to see if they are more concerned for my rights as a consumer or the big auto dealership bottom line. what about free trade and how about the dealers getting in line with what the actual MSRP is as opposed to trying to put the consumer at a disadvantage. Sounds to me like the Texas auto dealerships what their cake and eat too. Hope the internet makes them become more honest. I do belive Ford has the right and should be allowed to advertise and sell there automoblie to who ever and how ever they chose. Can I not fly to Detroit and buy a car there from Ford direct? I know in Europe you can go to a auto manufacture and by an auto direct, you stil pay the taxes and licenses on the vechile. I sure hope Ford wins the case in federal court because as I understand it it would be more closer to what the real MSRP should be.