Scout Motors urges DOJ to fight state dealer franchise laws
Scout called on the federal government to do this in an 11-page letter submitted to the Justice Department's Anticompetitive Regulations Task Force by Blair Anderson, the automaker's vice president of government and regulatory affairs.
The task force was created in March after president Donald Trump signed executive orders in January and February calling for removing "regulatory burdens placed on the American people." The letter used similar language, calling franchise laws "burdensome restrictions on competition."
Car sales in the United States are currently regulated by a patchwork of state laws, some of which allow automakers to sell cars directly to customers. But many states still require franchised dealerships. There's been friction between those dealerships and automakers since Tesla unveiled its direct-sales model over a decade ago.
Tesla fought a series of legal battles with franchised dealerships in individual states. Now Scout, which plans to build its Traveler SUV and Terra pickup truck in a new South Carolina factory starting in 2027, is facing similar struggles.
A group of Volkswagen and Audi dealerships in Florida filed a lawsuit in February to block Scout's direct-sales plans, and the California New Car Dealers Association (CNCDA) filed a similar lawsuit in April, Automotive News noted. In March, the National Automobile Dealers Association (NADA) also sent a letter to Volkswagen Group CEO Oliver Blume and other executives urging the company to let its members sell Scout vehicles.
Scout revives the International Harvester Scout, one of the original SUVs, which the VW Group gained the rights to after its purchase of International's successor Navistar. The new Scout vehicles are rugged off-roaders, with body-on-frame construction, with all-electric or extended-range powertrains.
They're also unlike anything in the current VW Group portfolio, and exactly the kinds of vehicles dealerships in truck-loving America are eager to sell. That's likely adding fuel to the fire over the VW Group's attempt to set up a new brand with direct sales, while keeping franchised dealerships for its other brands.
In the letter, Anderson said that, as a new manufacturer, Scout shouldn't be forced to adopt the franchised dealership model "especially when the new manufacturer has not asked any dealerships to place any investment in distributing its vehicles, developed a more efficient alternative, and will not sell any vehicles also offered for sale by a franchised dealer."
Dealerships don't seem to buy the logic that Scout's clean slate entitles it to a different sales model than its fellow VW Group brands. The question is whether the federal government will and whether, if it does, it actually has the authority to strike down state franchise laws.
Copyright 2025 The Arena Group, Inc. All Rights Reserved.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
6 minutes ago
- Yahoo
Critics Rock Trump Administration For Posting 'Delusional' And 'Backwards' Meme
President Donald Trump has promised to revive the coal industry, and the Energy Department is serving notice that it's ready to move forward. The tweet on the Energy Department's official X feed shows a piece of coal and a Wendy Williams phrase that's become a meme: Trump has long promoted coal and other fossil fuels, and he has a grudge against most forms of clean energy. He famously despises windmills, but also isn't fond of solar ― nor does he like green-powered vehicles such as electric cars, despite briefly promoting former friend Elon Musk's Tesla vehicles at a White House event this year before the two fell out. Trump has also declared a national emergency to fast-track new energy production ― specifically nuclear, oil, gas, and coal. He seems to favor coal in particular, signing multiple executive orders to help the industry since taking office. Critics fired some clean burns back at the agency:
Yahoo
6 minutes ago
- Yahoo
Trump hits Canada with 35 per cent tariffs
WASHINGTON — Canada has been hit with 35 per cent tariffs after U.S. President Donald Trump followed through on his threat to increase duties if Ottawa didn't agree to a trade deal. The White House said the tariffs would not affect goods compliant with the Canada-U.S.-Mexico Agreement on trade. Prime Minister Mark Carney had tempered expectations of an agreement by Friday, saying Ottawa would only take the right deal for Canada. On Thursday, Trump gave Mexico a 90-day extension on trade negotiations but did not announce a similar offer for Canada. Trump's 50 per cent copper tariffs also came into effect just after midnight, but this latest duty exempts the raw input material. The copper tariffs are being added to a growing list of U.S. sectoral duties, which include duties on automobiles, steel and aluminum. This report by The Canadian Press was first published Aug. 1, 2025. Kelly Geraldine Malone, The Canadian Press Sign in to access your portfolio
Yahoo
6 minutes ago
- Yahoo
Trump pushed tariffs on Canada to 35 per cent, but a CUSMA carveout creates a shield
WASHINGTON — U.S. President Donald Trump has increased tariffs on Canada to a staggering 35 per cent but a critical carveout is likely to shield most goods from the devastating duties. The White House has said the tariffs won't be applied to goods that are compliant with the Canada-U.S.-Mexico Agreement on trade, also known as CUSMA. Here's what that means for Canadian companies: What is CUSMA compliance? CUSMA was negotiated during the first Trump administration to replace the North American Free Trade Agreement. Companies can claim preferential treatment under CUSMA if they meet its rules of origin. While it is different depending on the product, generally it requires a specific amount of the goods be made of products or with labour originating from Canada, Mexico or the United States. About 80 to 90 per cent of Canadian goods might be able to comply with CUSMA's rules of origin, said Michael Dobner, the national leader of economics and policy practice at PricewaterhouseCoopers Canada. Not all exporters have filed the necessary paperwork to avoid the duties. There's been an increase in businesses claiming preferential treatment under CUSMA but it's not clear exactly how much of Canadian exports are currently compliant. Are any industries more at risk? Dobner said there's no specific industry that he expects to be hit the hardest. Certain companies may not be able to source input materials from North America to make their product. That means they would not be able to apply for preferential treatment under CUSMA and will face the 35 per cent tariff. But Dobner said "it's the minority of the exports of Canada to the U.S." What's the impact on small and medium-sized businesses? Small and medium-sized businesses may have not applied for CUSMA preferential status before Trump's tariffs because the process can be burdensome for enterprises of that size. Some small and medium-sized businesses might not meet CUSMA rules of origin requirements and don't have the financial flexibility to change their inputs to North American products. Dan Kelly, president and CEO of the Canadian Federation of Independent Business, said many of these businesses were absorbing some or all of the costs associated with Trump's tariffs under the assumption that there would a resolution coming. Kelly said some small and medium-sized businesses facing the 35 per cent tariff may have to stop selling into the United States. This report by The Canadian Press was first published Aug. 1, 2025. Kelly Geraldine Malone, The Canadian Press Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
