Pub. 56 2015-2016 Issue 3

20 By Karen Phillips T ADA’s General Counsel and Executive Vice-President Karen Phillips sent the following response to the Federal Trade Commission Chairwoman Edith Ramirez following the FTC’s Public Workshop Examining the U.S. Auto Distribution System conducted on January 19, 2016 in Washington D.C. The Dealer Franchise SystemWorks Best for the Consumer, the Manufacturer, and Retailer Dear Chairwoman Ramirez: On behalf of the Texas Automobile Dealers Association (TADA), an organization comprised of the fran- chised new motor vehicle and heavy duty truck dealers in Texas, the Austin Automobile Dealers Association, the Dallas Ft. Worth Metropolitan New Car Dealers Association, the El Paso New Car Dealers Association, the Houston Automobile Dealers Association, the New Car Dealers of West Texas, the San Antonio Automobile Dealers Association, and the Valley Automobile Dealers Association, I appreciate the opportunity to comment regarding the Federal Trade Commission’s (FTC) public workshop held on January 19, 2016. As outlined in the published agenda, the workshop explored competition and related issues in the context of state regulation of motor vehicle distribution and how these regulations affect business and the consumer. Specific stated topics included: 1. The regulation of dealer location; 2. Laws relating to reimbursement of warranty services; 3. Restrictions on manufacturers’ ability to engage in direct sales to consumers; and, 4. How the existing pattern of auto distribution and regulation may be affected by new developments such as autonomous vehicles, connected cars, and the rise of subscription-based automobile sharing services. These comments focus on the first three workshop segments. While any system can be faulted, the franchised automobile dealer model is the most advantageous to the consumer as well as to the vehicle manufacturer and retailer. A cursory as well as a thorough examination of the franchise system in this industry proves its advantages as well as forwarding the mission and vision of the FTC. 1  DEALER FRANCHISE — CONTINUED ON PAGE 22