Car manufacturers and dealerships operate under strict agreements that define their business relationship.
Dealers are expected to represent the brand, maintain the company's image, and promote the vehicles they sell.
When a dealer directs customers to a competing brand, it can create tension and lead to serious disputes.
Mitsubishi Motors has filed a lawsuit against a dealership owner in Burlington, Washington, after discovering that he had been recommending customers visit a Volkswagen dealership instead.
Directing Costumers to Neighbor Shop
The company alleges that the dealer, who owns Karmart Mitsubishi, violated several terms of their agreement by failing to follow branding requirements and failing to display proper signage and employee uniforms, according to Boosted.
More significantly, Mitsubishi claims that the dealer has been directing potential buyers to a neighboring Volkswagen dealership, which he also owns.
The company argues that this action damages the brand's reputation and creates confusion for customers.
Mitsubishi stated that it is taking legal action to protect its business and maintain integrity in its dealership network.
The company argues that allowing a dealer to promote a competing brand while still representing Mitsubishi undermines the trust between manufacturers and their retail partners.
Disputes between automakers and their dealerships are not uncommon.
In recent years, several car brands have taken legal action against dealers over various contract violations.
In some cases, dealers have been removed from franchise agreements for failing to meet sales targets or for not following corporate guidelines.
