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Dealer associations prepare suit to fight manufacturer direct selling

March 19, 2021
The Chicago Automobile Trade Association has joined with the Illinois Automobile Dealers Association — and with the strong support of each of their Boards of Directors — in preparing a lawsuit to fight the issuance of dealers’ licenses to motor vehicle manufacturers and to protect the state's franchised motor vehicle dealer system.  
Several new-vehicle manufacturers, including Rivian and Lucid, have announced plans to begin building and selling motor vehicles directly to the public later this year and in the coming years.  
State law requires manufacturers to contract with franchised dealers to sell new vehicles at retail, but Illinois Secretary of State Jesse White’s office said it will issue direct sale dealer licenses to those new manufacturers.  
 
The lawsuit will seek a ruling that Illinois laws requiring vehicle sales through franchised dealers apply to all motor vehicle manufacturers entering the market in the same way that they apply to existing manufacturers. The suit also seeks to prevent White’s office from issuing dealer licenses to motor vehicle manufacturers which would allow them to not have franchised dealers.
When the legal complaint is finalized, the dealer associations will ask their members to join as plaintiffs to protect the integrity of the franchised dealer system.  
In asking every dealer to put his or her name on the lawsuit, to add to the impact of the case, the CATA and the IADA would not be asking for funding; the dealer associations would pay the legal costs to defend the franchise system for the good of all Illinois dealers and their customers.
Additional information, including a form for dealers to join as a plaintiff and a copy of the complaint, will be released soon.
 
 

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