A Nissan Dealership Is Suing Nissan for Opening Another Dealer Nearby Despite Inventory Shortage

We’ve heard of competitive car dealerships before. But, usually, the manufacturer isn’t fueling the fire. One Nissan dealership is suing Nissan because the manufacturer allowed another Nissan dealership to open nearby despite not being able to supply the first dealer with enough inventory. 

Nissan badge up close
The Nissan logo | Justin Sullivan/Getty Images

Nissan dealer drama

F. James Rourke owns the Central Avenue Nissan dealership in Yonkers, NY. Rourke filed a suit in the U.S. District Court for the Southern District of New York accusing Nissan of a breach of contract and violation of state law after Nissan gave the go-ahead to a new dealership nearby despite ongoing supply problems. 

Normally, something like this wouldn’t be that big of a deal. However, given the ongoing pain dealers are feeling from the supply chain and resulting car shortage, dealers are having to fight for every car allocation. 

“When you can’t even supply the dealerships that you currently have with an ample amount of inventory, you’re going to bring in a new franchise and give him additional inventory?” said Rourke in an interview with Automotive News

Dealers have rights too

Due to the chip shortage, inventory has dwindled at dealerships, including Marin Honda in San Rafael, California, pictured
Due to the chip shortage, inventory has dwindled at dealerships | Justin Sullivan/Getty Images

Rourke is suing based on the New York Franchised Motor Vehicle Dealer Act. This guarantees dealers a six-mile buffer between dealers of the same brand. Rourke says his Nissan dealership is only 5.87 miles from the new Nissan dealership in White Plains, NY. 

The established dealership has been in business in this neighborhood for 20 years. He is clearly concerned because Nissan has struggled to provide him with adequate inventory. If this new one were to open so close to him, not only would it be competition, but it would also stretch the supply of new cars even thinner. 

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“Rogue inventory, our bread and butter SUV, is at a four-day supply,” said Rourke, whose lawsuit states that the Central Avenue garage is often selling vehicles from the lot the same day they arrive in stock. “The last thing Nissan needs right now is another dealership without sufficient inventory to meet customer demand.”

The Nissan Rogue isn’t the only model that the two dealers would be fighting over. By all indications, the new Nissan Z is shaping up to be something of a hot ticket item. The rollout of press info has drummed up plenty of excitement from customers. 

Although Rourke mentioned the Nissan Rogue by name, something tells me that if the Nissan Z is as popular as it seems to be, all Nissan dealers will be struggling to get enough supply to meet demand. 

This is a story we are tired of writing and that customers are tired of reading. The chip shortage and other supply chain issues have racked the auto supply globally. Until chip production can meet the increased demand, our friend in Yonkers will likely continue to struggle to fill his lot.

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