PocketLaw | Georgia Code | Restrictions on the Ownership, Operation,

Restrictions on the Ownership, Operation, or Control of Dealerships by Manufacturers and Franchisors; Competing Unfairly With New Dealers

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It shall be unlawful for any manufacturer or franchisor or any parent, affiliate, wholly or partially owned subsidiary, officer, or representative of a manufacturer or franchisor to own, operate, or control or to participate in the ownership, operation, or control of any new motor vehicle dealer in this state within a 15 mile radius of an existing dealer of such manufacturer or franchisor; to own, operate, or control, directly or indirectly, more than a 45 percent interest in a dealer or dealership in this state; to establish in this state an additional dealer or dealership in which such person or entity has any interest; or to own, operate, or control, directly or indirectly, any interest in a dealer or dealership in this state unless such person or entity has acquired such interest from a dealer or dealership which has been in operation for at least five years prior to such acquisition; provided, however, that this subsection shall not be construed to prohibit:
1. The ownership, operation, or control by a manufacturer or franchisor of a new motor vehicle dealer for a temporary period, not to exceed one year, during the transition from one owner or operator to another;
2. The ownership, operation, or control of a new motor vehicle dealer by a manufacturer or franchisor during a period in which such new motor vehicle dealer is being sold under a bona fide contract, shareholder agreement, or purchase option to the operator of the dealership;
3. The ownership, operation, or control of a new motor vehicle dealer by a manufacturer or franchisor at the same location at which such manufacturer or franchisor has been engaged in the retail sale of new motor vehicles as the owner, operator, or controller of such dealership for a continuous two-year period of time immediately prior to April 1, 1999, where there is no prospective new motor vehicle dealer available to own or operate the dealership in a manner consistent with the public interest;
4. The ownership, operation, or control by a manufacturer which manufactures only motorcycles or motor homes of a retail sales operation engaged in the retail sale of motorcycles or motor homes;
5. The ownership, operation, or control by a manufacturer which is selling motor vehicles directly to the public at an established place of business on January 1, 1999, and which has never sold its line make of new motor vehicles in this state through a franchised new motor vehicle dealer unless and until such manufacturer is wholly or partially acquired by another manufacturer or franchisor;
6. The ownership, operation, or control by a manufacturer which manufactures trucks with a gross vehicle weight rating of 12,500 pounds or more of a new motor vehicle dealer which only sells trucks with a gross vehicle weight rating of 12,500 pounds or more at the same location at which such manufacturer has been engaged in the retail sale of such trucks as the owner, operator, or controller of such dealership for a continuous two-year period of time immediately prior to April 1, 1999, or at one additional location which is not located within the relevant market area of an existing dealer of the same line make of trucks; provided, however, this exemption shall apply to a manufacturer described in this paragraph only until such manufacturer is wholly or partially acquired by another manufacturer or distributor;
7. A manufacturer from selling new motor vehicles to customers if such vehicles are manufactured or assembled in accordance with custom design specifications of the customer and such sales are limited to no more than 150 vehicles per year; or
8. The ownership, operation, or control by a manufacturer of not more than five locations licensed as new motor vehicle dealerships for the sale of new motor vehicles and any number of locations that engage exclusively in the repair of such manufacturer's line make of motor vehicles, provided that such manufacturer was selling or otherwise distributing its motor vehicles at an established place of business in this state as of January 1, 2015, and:
  1. The manufacturer manufactures or assembles zero emissions motor vehicles exclusively and has never sold its line make of motor vehicles in this state through a franchised new motor vehicle dealer; and
  2. The manufacturer has not acquired a controlling interest in a franchisor or a subsidiary or other entity controlled by such franchisor, or sold or transferred a controlling interest in such manufacturer to a franchisor or subsidiary or other entity controlled by such franchisor.
It shall be unlawful for a manufacturer or franchisor or any parent, affiliate, wholly or partially owned subsidiary, officer, or representative of a manufacturer or franchisor to compete unfairly with a new motor vehicle dealer of the same line make, operating under a franchise, in the State of Georgia, and, except as otherwise provided in this subsection, the mere ownership, operation, or control of a new motor vehicle dealer by a manufacturer or franchisor under the conditions set forth in paragraphs (1) through (8) of subsection (a) of this Code section shall not constitute a violation of this subsection. For purposes of this Code section, a manufacturer or franchisor or any parent, affiliate, wholly or partially owned subsidiary, officer, or representative of a manufacturer or franchisor shall be conclusively presumed to be competing unfairly if it gives any preferential treatment to a dealer or dealership of which any interest is directly or indirectly owned, operated, or controlled by such manufacturer or franchisor or any partner, affiliate, wholly or partially owned subsidiary, officer, or representative of such manufacturer or franchisor, expressly including, but not limited to, preferential treatment regarding the direct or indirect cost of vehicles or parts, the availability or allocation of vehicles or parts, the availability or allocation of special or program vehicles, the provision of service and service support, the availability of or participation in special programs, the administration of warranty policy, the availability and use of after warranty adjustments, advertising, floor planning, financing or financing programs, or factory rebates.
Except as may otherwise be provided in subsection (a) and subsection (b) of this Code section, no manufacturer or franchisor shall offer to sell or sell, directly or indirectly, any new motor vehicle to a consumer in this state, except through a new motor vehicle dealer holding a franchise for the line make covering such new motor vehicle. This subsection shall not apply to manufacturer or franchisor sales of new motor vehicles to the federal government, charitable organizations, or employees of the manufacturer or franchisor.

(Code 1981, §10-1-664.1, enacted by Ga. L. 1999, p. 1194, § 11; Ga. L. 2000, p. 1175, § 3; Ga. L. 2015, p. 951, § 2/HB 393.)

The 2015 amendment, effective July 1, 2015, in subsection (a), substituted "this state" for "Georgia" in paragraph (a)(5), deleted "or" at the end of paragraph (a)(6), deleted the period and added "; or" at the end of paragraph (a)(7), and added paragraph (a)(8); and substituted "through (8)" for "through (7)" in the first sentence of subsection (b).

Law reviews.

- For article on the 2015 amendment of this Code section, see 32 Ga. St. U.L. Rev. 23 (2015).

PART 6 ENFORCEMENT OF ARTICLE BY COMMISSIONER OF MOTOR VEHICLE SAFETY

10-1-665. Definitions.

As used in this part, the term:

"Commissioner" means the state revenue commissioner.
"Department" means the Department of Revenue.

(Code 1981, §10-1-665, enacted by Ga. L. 1993, p. 1585, § 2; Ga. L. 2003, p. 445, § 2; Ga. L. 2005, p. 334, § 4-4/HB 501.)

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