North Carolina Is First State to Topple Chrysler Auction Ban

The North Carolina Automotive Dealers Assn. has added another controversial auto maker policy to the list of no-no's in the state's franchise law.

Priding itself on being the association most protective of its members against factory restrictions, the Raleigh-based NCADA has won from the state legislature the nation's first ban on any policy preventing attendance at factory-only auctions by dealers missing their sales targets.

Chrysler instituted the policy last spring. It withholds factory-auction privileges for any Chrysler, Dodge or Jeep dealers failing to meet at least half of their monthly “minimum sales responsibility” numbers.

NCADA President Robert Glaser says the policy affected 463 Chrysler-brand dealerships, including 13 in his state.

The North Carolina law was amended to require equal payments of incentives, regardless of dealer size, after Ford's Blue Oval awards program was initiated. The law also prevents auto makers from using new-vehicle sales targets to restrict used-vehicle sales to dealerships or deny access to any discount or incentive campaigns.

Glaser says other states are planning to introduce similar legislation. Chrysler remarketing director Peter Grady says the auto maker would comply with the North Carolina auction amendment.