A U.S. Court of Appeals says Ford Motor Co.'s used-car web site — the Pre-Owned Showroom — violates the Texas Motor Vehicle Commission Code.

A Ford spokeswoman says the court's decision is disappointing, but she noted that the appellate judges recommended the case go to the Supreme Court.

Texas limits car sales to licensed dealers, and manufacturers can't be licensed.

The cyberspace showroom lets Internet users click-and-scroll for used vehicles. They can be shipped to local dealers for test drives.

The National Automobile Dealers Association and the Texas Automobile Dealers Association opposed Ford in court.

“It is a significant victory for dealers when an appellate court upholds a state law which prohibits manufacturers from directly competing with franchised dealers,” says Bill Newman, NADA's COO of public and legal affairs.