Welcome to the Daily 5 report for Wednesday, July 16.
Our exclusive scoop today details a long-simmering "holy war" that's been decades, if not generations, in the making: factory versus dealer.
According to our story, the Alliance for Automotive Innovation asked the U.S. Department of Justice to examine whether state franchise laws restrict competition and harm consumers, provoking a battle with the National Automobile Dealers Association in an auto industry clash of the titans.
Clearly, automakers see an opportunity under the new U.S. administration to pursue national policy on automotive retail regulation — instead of the confusing patchwork of franchise laws varying from state to state.
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NADA views the alliance's actions as "a direct attack to the franchise system," the group told its board and its Automotive Trade Association Executives in a July 14 email obtained by Automotive News.
"If there is such thing as a holy war in the franchise world, it's a holy war," Don Hall, CEO of the Virginia Automobile Dealers Association, said in our story. The alliance's letter is "an affront to this industry."
In a related story, Volkswagen Group's Scout Motors asked the U.S. government to take all steps necessary to eliminate state motor vehicle franchise laws, calling them "burdensome restrictions on competition" as the VW startup unit seeks a path to sell vehicles directly to consumers.
Scout's request was submitted in an 11-page letter to the Justice Department's Anticompetitive Regulations Task Force.
You can almost hear the phones ringing on Capitol Hill with angry auto dealers calling their respective lawmakers to lobby the Trump administration to ignore these efforts.
The issue of direct auto sales cuts across the usual partisan lines, as we saw in recent years when Tesla sought to get around franchise laws in various states for direct sales of its electric vehicles. This battle created strange bedfellows between pure capitalists who support free enterprise and the progressive green lobby who want to make it easier for new emission-free vehicles to be sold directly to consumers.
Given how long it took for this "holy war" to break out, it'll take many more years for it to get resolved.
That's it for now. Have a great rest of your day. If you want to read this story in your browser, click here.
— Philip Nussel, online editor
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