Automakers have traditionally had little luck owning car dealerships, but that hasn't stopped them from trying. A recent effort by Chrysler led to the creation of Motor Village in downtown Los Angeles, but the local dealer association is none too pleased about the facility's location.
Back in 2008, Chrysler purchased La Brea Avenue Motors and in January, the automaker moved the operation to its current downtown LA location. The $30 million facility is now home to Chrysler, Dodge, Ram, Jeep and Fiat stores. Unfortunately, it resides within 10 miles of three other Chrysler dealers, which is a violation of California franchising laws. The local dealer association brought the matter to the attention of the California New Motor Vehicle Board back in March, and the agency has since voted unanimously to have the California DMV open an investigation.

California makes one-year exceptions to the franchise law-for example, if the automaker partners with a local dealership that invests in operational improvements and plans to buy out the OEM stake-but in the case of the Motor Village, Chrysler doesn't qualify. Lawyers for the automaker tell Automotive News that the Chrysler has attempted to find such an investor but has been unsuccessful so far. The search for a partner continues, but for now, Chrysler says the store "a test bed for new retail and marketing ideas."

If the DMV finds Chrysler to be in violation of the franchise agreement, California could pull its business license.


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  • 29 Comments
      Alex Rodriguez MacFa
      • 3 Years Ago
      It would be awesome to get rid of the middle man. I always wanted dealers to be directly owned by the manufactures. All incentives and holdbacks would greatly reduce the MSRP and instead of having two salesperson fighting each other and harassing you (and then calling the manager before you go), they should have product representatives who actually know the product inside/out and have them pay decent salaries with no commission. This would make the car buying experience much pleasant. I know many people who hate car shopping. In order to get the best price, they have o visit like 3 to 4 dealers at least around the county to get the better price. I think this system is exhausting and tedious.
        • 3 Years Ago
        @Alex Rodriguez MacFa
        [blocked]
      Shiftright
      • 3 Years Ago
      This company store is much more about being a showcase for the various brands than trying to be competition for existing dealerships, and in that regard they've done a fantastic job. I've been there and every brand has its own separate environment designed specifically with that brand's values. It's the best effort I've ever seen from Chrysler. The Fiat Studio is particularly nice. I can't imagine Chrysler would spend a ton of money on a multi story retail space without having its lawyers cover their collective asses. It's a great showcase for the company and hope it remains.
      P
      • 3 Years Ago
      Yeah, because nobody should be able to make and retail something at the same time. That's like, wrong. These laws essentially keep a broken system in place for wealthy dealers. We have jacked up prices, terrible service, constant scams, all for what benefit? I'm sorry, but until manufacturers start selling their wares directly, the car buying system will always be a broken model.
      SenorMitchSpence
      • 3 Years Ago
      Make it a Fiat Corporation store that sells Chrysler's "on the side". Or choose the following; tell the dealers to relocate their shitty dealerships that cannot possibly match this 30 mil facility. If they choose to be ******* dumbfucks as current (who the **** rats out the hand that feeds them to the government???), then suddenly, BOOMFLASH!!!, you cannot sell cars to those dealerships, because they "do not adhere to the image that the new Chrysler is trying to present to California", and that "if they are able to match the new dealership in terms of 'image' within 1 years time, then they can continue to receive cars from Chrysler." Now, this puts the dealerships in a bit of a squeeze. Not for these 3 dealerships-these 3 dealerships bit the hand that feeds them, and seeing that they cannot manage to put $30 million on their businesses in 1 years time (the investigation), they are in every essence, ******. You do not try to force your company to loose a brand new $30 million dollar investment. They will get mad, and will try to use a anti-trust law, saying that Fiat-Corp is trying to muscle their small business out with profits from other enterprises. This would be easy for Fiat to squash, they advertise everywhere. They are visibly to redefine their image, and are choosing to further do so through a new thought-line of showrooms. Fiat needs to make a strong image here- all of those wimpy ass dealerships that got bailed out must follow Fiat's lead, or find a different company to buy from. Those first 3 are a necessary loss.
      Rastislav Toth
      • 3 Years Ago
      Most car dealerships should be factory stores. For the benefits of having direct contact with their customers and for the fair treatment of their customers when it comes to pricing. Apparently CDMV didn't mind the fact that two customers could walk out of a dealership paying different amounts for the exact same product. It's amazing this current sham of a retail model has survived so long and has legal protection in most States.
      sinistro79
      • 3 Years Ago
      Here is how Fiat can fix this problem. 1. Get rid of all of the Chrysler, Dodge, and Jeep models (But let the Fiats stay). 2. Replace the empty space from the American brands with brand new Alfa Romeo models. Problem sovled.
      reattadudes
      • 3 Years Ago
      I must say the ignorance level here is beyond belief. automakers have tried for years to open factory stores; leave out this franchise issue for a moment with this particular case in California. Ford and GM went big into factory stores in 1990. Ford did Indianapolis and Salt Lake City; GM did the San Fernando Valley in Los Angeles. they first bought up 5-10 dealerships in the immediate area to eliminate competition. and guess what? IN EVERY CASE, they failed miserably. non-factory owned dealerships outside the areas consistently sold more cars, their CSI was stratospherically higher, and they made more money. I owned a new car dealer for many years, and customers have absolutely no idea the battles a dealership goes thru with the factory to get warranty work authorized, regardless of manufacturer. in many cases, the factory will deny warranty claims. in the "factory store" so many of you think would be 'just ducky', guess what? the service writer will call you to let you know the claim has been denied, and you'll have to pay for the repair yourself. end of discussion. still like that factory store? for all of you high schoolers who like to think of new car dealerships thru sophomoric terms like "stealerships", guess what we would do in the same situation I gave above? you'd get a phone call from the service department telling you your car is repaired, and ready to go. why? because dealerships keep a special fund just for situations like this. I kept $225,000 in the account at all times, and I had a small dealership. I know many that keep 5 million dollars or more for the same purpose. you see, we "stealerships" want you to come back and buy another car from us. when you come in to pick up your car, we're not going to toot our horn and say, "the factory denied your claim because you burned the engine up thru your own neglect, but we paid to have it repaired ourselves". nope, we'll just hand you the keys and say, "thank you, that's no charge". you keep wishing for those factory stores, folks. with competition eliminated, you'll be paying list for everything, incentives will evaporate, and we'll have 12,000 mile/12 month warranties like they do in the rest of the world outside of the US and Canada. ...and the dealerships will be filled with snotty, attitude filled employees, just like Apple stores. be very careful what you wish for, especially when you're clueless.
        Alex Rodriguez MacFa
        • 3 Years Ago
        @reattadudes
        The things is, not all dealerships have your work ethic. Many dealers do take advantage of people, especially to those customers who don't do their homework. VW has a bad reputation for being awful with service contrary to my local VW dealership who has stellar service and they have given me freebies every now and then. There are some good dealerships out there it's just a hassle to find them!!
          reattadudes
          • 3 Years Ago
          @Alex Rodriguez MacFa
          actually, Alex, over 90% of the new car dealerships out there do the same thing. but consider some factors: 1) did they buy the vehicle here? no one has a problem with someone who has recently moved, or someone who has had a trip interruption. otherwise, why aren't they back at the selling dealer for service? were they turned down for the same problem there? 2) are they acting like a total jerk? examples: -are they screaming loudly in the dealership, "this f-ing POS, I'll never buy another...", -are they threatening to call the manufacturer or a consumer agency even before you say a single word? =OR= are they polite and respectful, and sincerely need your help? there was never anything I enjoyed more than bringing in folks like many of the legions of "stealership experts" like the ones here, and have them spend a week or two at the dealership. -let them see how hard our finance people work to get a loan approved for a single mom with a disabled child. -let them see those "huge profits" we make, like the $900 in holdback that is our total profit on the deal, and our holding charges (floorplan interest) on the same vehicle were $1,200 on an old stock unit. for those of you without an accounting degree, writing in red with red brackets around it is not a profit, but hey, we're all "stealerships", right? -let them see a balance sheet (if they can read it), and see many owners like myself (and multitudes of others, believe me) who took no salary at all during the difficult years so we wouldn't need to lay anyone off. suddenly, their opinion completely changes. that's what education does. and education does not consist of reading "the small timer's bible", Consumer Reports, or seeing what edmunds.com told them.
      Patrick
      • 3 Years Ago
      The only reason why we have car dealers is because state law mandates they exist. There is no market reason for them. If state law didn't grant car dealers market power we'd be able to buy autos from WalMart, Best Buy, Sears, or direct from factory.
      Jerry
      • 3 Years Ago
      a combination Chrysler Fiat car now their is a repair shop parts man wortst night mare
      Ben
      • 3 Years Ago
      I've been selling cars for about seven yrs, and I can honestly say that I have never seen an EDUCATED car buyer feel like they have been ripped off, and for those of you saying its a good idea because every one will get the best price, no where in the article did it say the dealership is a pure priced store with noncommision sales people.
        • 3 Years Ago
        @Ben
        [blocked]
          Ben
          • 3 Years Ago
          I often encourage people to visits those sites, (my dealership is rated 4.9 out of 5) and do there research I would much rather sell to an educated buyer that knows what the prices should be, the the buyers that just come in and bark orders, ;
      ipodrulz
      • 3 Years Ago
      I think every car dealership should be owned by the manufacture. Apple Store style.
        RICK
        • 3 Years Ago
        @ipodrulz
        If manufacturer's owned all of the stores. You would never find cost on the internet. What is cost on an iPad. Are you getting ripped off now?
        SloopJohnB
        • 3 Years Ago
        @ipodrulz
        The only thing Apple has in its favor is that everyone gets ripped off with the same price. Also, as soon as you buy it Steve Effing Jobs will announce something newer or whiter (pun intended).
          zamafir
          • 3 Years Ago
          @SloopJohnB
          I love reading comments like this. how often does HP/Lenovo/Dell announce a new laptop? Every week? Every other day? How about handsets/cellphones from HTC? Every week? Every other week? Apple announces new computers what, ONCE a YEAR? Handset Once a Year or every six months if you toss the white iPhone in and people get their panties in a wad. Longest product cycle in the tech industry by a massive margin and yet people still whine. amazing. I guess it's just comforting to complain.
          ernie.
          • 3 Years Ago
          @SloopJohnB
          Yes. Cause car makers don't announce new cars every year, like Apple does.
      • 3 Years Ago
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        • 3 Years Ago
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          • 3 Years Ago
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          Ben
          • 3 Years Ago
          @Sea Urchin, Ive been selling cars for some time now, and one thing I have found is women are FAR better car buyers on average then men, way more prepared, organized and educated on how to get a good deal.
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