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Automaker Out of Expo For Direct Sales | DrivingSales News

Utah Automaker Kicked Out Of Auto Expo Over Direct Sales

January 22, 2016 0 Comments

What began as a dispute over an event booth has become a conversation about dealership franchise laws.

Vanderhall Motor Works, a Utah-based company that sells three-wheeled roadsters, was recently banned from the Utah International auto expo. According to the Salt Lake Tribune Vanderhall Motor Works had purchased booth space for the event in order to showcase their niche vehicle creation. However, reports indicate before the expo opened the event organizers “walled-off” the Vanderhall Motor Works booth, citing their decision to sell directly to consumers as the reason.

Speaking to the SLC Tribune, Daniel Boyer director of sales and marketing for Vanderhall Motors said, “[The dealers] don’t want anything that will encourage consumers to consider the idea of purchasing direct from a manufacturer. They want to hold onto the monopoly they’ve created.” Speaking to the SLC Tribune, Boyer also noted his company makes about 50 of its vehicles per year and that they cost about $77,000 each. Boyer didn’t feel a dealership distribution model made sense for Vanderhall Motors.

On the other side of the issue is Craig Bickmore, president of the new car dealers of Utah. Bickmore reportedly told the SLC tribune the rules of the show indicated manufacturers had to have a dealership relationship in order to have a booth and present at the show. Speaking to the SLC Tribune Bickmore said, “I apologized. I said I don’t blame you for being mad. But we’re just following the rules here. The franchise system does many things, but one of them is it moves the price of that product down because you have so many competitors in the market. So here’s the flip side: The manufacturer-direct model, what happens? Where are the competitive forces?”

The dispute between automaker startup Vanderhall Motors and Utah franchise laws comes around 10 months after Tesla Motors built a showroom in Salt Lake City, Utah before the state reiterated a prohibition on direct-to-consumer new car sales.

About the Author:

The DrivingSales News team is dedicated to breaking the relevant and the tough stories affecting car dealers. Have questions for DrivingSales News? Reach the team at news@drivingsales.com.

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