Chrysler-owned dealership under California DMV scrutiny

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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