§ 46.2-1572.4 — Manufacturer or distributor use of performance standards

Virginia § 46.2-1572.4

• Jurisdiction: Virginia
• Title 46.2: MOTOR VEHICLES
• Subtitle IV: DEALERS AND DRIVER TRAINING SCHOOLS
• Ch. 15: MOTOR VEHICLE DEALERS
• Art. 7: FRANCHISES

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A. Any performance standard or program that is used by a manufacturer or distributor for measuring dealership performance and may have a material effect on a dealer, and the application of any such standard or program by a manufacturer or distributor, shall be fair, reasonable and equitable, and if based upon a survey, shall be based upon a statistically valid sample. Upon the request of any dealer, a manufacturer or distributor shall disclose in writing to the dealer a description of how a performance standard or program is designed and all relevant information used in the application of the performance standard or program to that dealer.

B. A manufacturer or distributor shall not use any data, calculations, or statistical determinations of the sales performance of a dealer for any purpose, including (i) loss of incentive payments or other benefits, (ii) claim of breach or threats thereof, or (iii) notice of termination or threats thereof for the period of time the manufacturer, factory branch, distributor, or distributor branch has established an agreement, program, incentive program, or provision for loss of incentive payments or other benefits that causes a dealer to refrain from selling any used motor vehicle subject to (a) recall, (b) stop sale directive, (c) technical service bulletin, or (d) other manufacturer, factory branch, distributor, or distributor branch notification to perform work on a dealer's used motor vehicles in its inventory when there is no remedy or there are no parts to remediate each such affected used motor vehicle from the manufacturer, factory branch, distributor, or distributor branch and for 90 days after the termination of such agreement, program, incentive program, or provision for loss of incentive payments or other benefits.

The data on which the manufacturer or distributor seeks to rely under this subsection shall only be for a period or periods not excluded under this subsection. For any performance standard or program that is used by a manufacturer or distributor for measuring dealership performance during the period or periods excluded under this subsection, a dealer shall be deemed in compliance with any such program requirements related to sales performance or sales or service customer satisfaction performance of a dealer.

This subsection shall not prevent a manufacturer, factory branch, distributor, or distributor branch from (1) requiring that a motor vehicle not be subject to an open recall or stop sale directive in order to be qualified, remain qualified, or be sold as a certified pre-owned vehicle or similar designation; (2) paying incentives for selling used vehicles with no unremedied recalls; (3) paying incentives for performing recall repairs on a vehicle in the dealer's inventory; or (4) instructing that a dealer repair used vehicles of the line-make for which the dealer holds a franchise with an open recall, provided that the instruction does not involve coercion that imposes a penalty or provision of loss of benefits on the dealer.

C. A dealer may apply to the manufacturer, factory branch, distributor, or distributor branch for adjustment to data, calculations, or statistical determinations of sales performance or sales and service customer satisfaction performance for any period of time that such dealer has at least five percent of its new motor vehicle inventory subject to a recall or stop sale directive and for 90 days after the end of such period of time. Within 30 days of application for adjustment, the manufacturer, factory branch, distributor, or distributor branch shall use reasonable efforts to review and adjust the data, calculations, or other statistical determinations back to the date that the dealer was prevented from selling the new motor vehicles. A dealer applying for adjustment shall have the burden of showing that the prevention of sale had a material, adverse impact on such dealer's new vehicle sales performance or sales and service customer satisfaction performance, and the adjustments by the manufacturer, factory branch, distributor, or distributor branch shall use reasonable efforts to remediate the effect of the impact shown on the data, calculations, or statistical determinations of sales performance or sales and service customer satisfaction performance.

The manufacturer shall take into consideration any adjustments to a dealer's new vehicle sales performance or sales and service customer satisfaction performance made by the manufacturer under this subsection in determining a dealer's compliance with a manufacturer performance standard or program.

Legislative History

2001, cc. 165, 173; 2016, cc. 432, 534.