According to Automotive News, Stellantis has taken legal action against Randy Marion Chrysler, Dodge, Jeep, Ram (CDJR), a dealership located in Wilkesboro, North Carolina. The aim of the lawsuit is to avoid the obligation to repurchase more than 3,800 unsold vehicles, a decision that could cost the automotive group about $180 million.
Stellantis sues dealer who asked them to repurchase over 3,800 cars
The conflict began when Randall Marion, the dealership director, notified Stellantis on June 13 of his intention to terminate the dealership’s sales and service agreement. Marion asked the company led by Carlos Tavares to repurchase the inventory of new vehicles by September 13, in accordance with North Carolina state law. This law requires automakers to repurchase all new and unsold vehicles acquired in the last 24 months from a dealership that is terminating its franchise agreement.
In his communication, Marion did not specify the reason for terminating the franchise but emphasized that the dealership expected Stellantis to comply with the repurchase obligations required by law. Stellantis’ lawsuit, filed on June 28, does not contest the termination of the franchise agreement but disputes the obligation to repurchase the fleet vehicles. The automaker argues that in the last three years, the dealership has ordered a significant number of fleet vehicles, many of which were supposed to be sold to specific customers. However, it was revealed that many of these sales were not genuine, leading to an unusually large inventory of 3,841 units.
The dealership stated it had sold 4,532 vehicles in 2023 and 770 between January and May of this year. Stellantis contends that these figures are misleading and that the dealership violated company rules by accumulating fleet vehicles to resell them at higher prices during a period of high demand. Stellantis is seeking a court ruling to clarify that North Carolina law does not require repurchasing fleet vehicles under these circumstances.
The law mandates the repurchase of new and unsold vehicles, acquired in the last 24 months, if they have not been significantly modified or driven for more than 1,000 miles. However, Stellantis argues that its policies typically do not provide for the repurchase of fleet units because dealers usually do not maintain large inventories of such vehicles without committed buyers.
The automaker also claims that the dealership used its own fleet account number and those of large corporate customers without proper authorization to order and stock vehicles. Additionally, some fleet vehicles have been modified or customized, which, according to Stellantis, should exempt them from the repurchase requirement.