Fri Aug 9, 2019
Author: RV News Staff
RVIA State Legislative Priorities, Part 1
Business Relationship Between RV Manufacturers and Dealers
More than half the states lump RV dealers with automobile dealers under state franchise laws and that, according to the RV Industry Association, can interfere in the business relationship between dealers and manufacturers.
In the association’s 2019 State Legislative Policy Agenda released this week, RVIA’s state government affairs staff highlight seven key issues that the association has identified as priorities. Today, we look at the importance of consistent, RV-specific laws covering dealer-manufacturer agreements. Other issues will be covered in the days to come.
Twenty-one states do not include RVs in their existing automobile dealer franchise laws while two states, North Dakota and Iowa, do not include towable RVs in auto franchise laws. In the other states, RVIA supports enactment of consistent, RV-specific laws governing the relationship between RV manufacturers and dealers in all states.
In those states, the business relationship between RV manufacturers and dealers are covered by automobile franchise laws “even though auto dealers and RV dealers operate under very different business models,” RVIA says.
Unlike the automobile industry, there are no true franchises in the RV industry, it says.
The RV sales and distribution model is significantly different than that of the auto industry, RVIA says. The auto industry typically operates with a one-dealer-to-one-manufacturer relationship. In the RV industry, the relationship is more typically one-dealer-to-many-manufacturers.
Also, the RV industry is not vertically integrated among manufacturers, parts and suppliers as in the auto industry. This creates a fundamental difference between the two industries in warranty obligations.
When the business relationship between the RV dealer and manufacturer is captured and included, often unintentionally, in auto franchise laws “the result is a misfit,” RVIA says.
To avoid operating outside state auto franchise laws that do not apply to the RV industry, enactment of RV-specific laws is crucial, RVIA says. RV-specific laws allow the industry to pursue its unique business model without interfering with laws that apply to the auto industry.
RV-specific laws do not disrupt state business licensing laws nor prevent state agency oversight of RV dealer and manufacturer interactions. They do provide consistency with reciprocal advantages for RV dealers and they allow manufacturers to develop and manage dealer agreements across the states.
Copies of the RVIA State Legislative Policy Agenda are available here.
Next, Part 2: Why Auto Lemon Laws Should Not Be Applied to RVs.