N.Y. dealer sues Stellantis for diverting inventory

Dealers outside New York City have accused Stellantis of offering illegal “secret discounts” to competitors and cutting vehicle shipments in retaliation for previous legal victories against automakers.

The lawsuit, filed by Larchmont Chrysler-Jeep-Dodge-Ram, located about 20 miles northeast of Manhattan, seeks damages for alleged violations of federal antitrust and New York dealership laws, as well as Stellantis’ alleged breach of duty. I’m here. Good faith and fair dealings.

“Decades-old family-run retailers face their demise through no fault of their own,” the complaint states. Larchmont is owned by his Alfredo Gulla, and the day-to-day operations are handled by his daughter Eleanor and his Silvana Gulla.

“Stellantis’ goal is to deplete Larchmont’s inventory in retaliation for asserting its legal rights,” the lawsuit said, referring to the New York State Department of Motor Vehicles administrative proceedings in which Larchmont won.

Larchmont fought Stellantis’ predecessor Fiat Chrysler Automobiles for several years over poor sales quotas. In 2021, shortly after FCA merged with PSA Group to form Stellantis, an administrative law judge sided with dealers, and the DMV’s Board of Appeals upheld the decision.

Stellantis spokeswoman Jodi Tinson declined to comment because the lawsuit is pending. The automaker has until March 6 to file a response with the court, and has not yet done so at the time of this article’s publication.

The complaint alleges that Stellantis has engaged in various illegal activities amid the “largest inventory crisis the auto industry has ever faced” due to the coronavirus pandemic and global microchip shortages. blaming.

Among these practices, Larchmont claimed to divert promised “shippable” vehicles to other dealers, replacing them with an allocation of “not yet made” vehicles that the stores could not sell. ing.

According to the complaint, Stellantis cut Larchmont’s quota by 38 cars in summer 2021, 22 cars in fall 2021 and 16 cars in November 2021, sending them to different dealers each time. For example, in August 2021 the dealer said he received 20% fewer vehicles than expected.

“Larchmont will be given a slower than normal delivery window while competing dealers will get priority inventory,” the lawsuit states.

In a previous lawsuit filed with the New York DMV, Larchmont challenged FCA for failing to adjust its minimum sales liability standards to reflect local market conditions, including the brokerage activities of its competitors. A judge found the metric to be unreasonable, arbitrary or unfair as a sales performance criterion, and FCA said he will continue to use the metric to determine whether Larchmont is complying with its sales agreement. prohibited.

The newly filed lawsuit alleges that replacing vehicles in store quotas with inventory to be built or products further behind in the pipeline “interferes with Larchmont’s ability to obtain new quotas.” There is

It also accuses Stellantis of using a large number of “underground bargain brokers prevalent in the 3-state area.” Larchmont said dealers in far-flung Pennsylvania are selling through brokers who receive more popular cars, secret discounts, and prices below billing.

According to the complaint, former employees of two “preferred” dealers near Larchmont told the DMV about secret discounts to facilitate brokerage. “One or more” of the dealer principals at those stores negotiated with Stellantis executives to cut prices, he said. “These dealers will hold special meetings and secret deals with his Stellantis executives in Michigan to secure inventory in quantities and terms not available at other dealers.”

According to the complaint, these discounts give advantageous dealers a material and unfair price advantage that Larchmont cannot match.

The dealer’s attorney said he was not authorized to discuss the matter.

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