Governor Newsom Signs California New Motor Vehicle Franchise Bill

Contact: Jenny Dudikoff
Phone: 916-441-2599

SACRAMENTO, CA – The California New Car Dealers Association, representing nearly 1,200 new car dealers statewide, has achieved a huge victory in its aggressive efforts to strengthen and update California’s new motor vehicle franchise laws.

Governor Gavin Newsom has signed AB 179 into law. Overcoming significant manufacturer opposition, AB 179 unanimously passed the California State Legislature without a single no vote and now has the support of the Governor. AB 179, authored by Assemblymember Eloise Reyes (D-San Bernardino), contains a number of provisions that will improve California’s franchise laws, while continuing to protect the California franchise system, California new car buyers and local businesses. Key components of the bill include:

Strengthening California’s franchise laws
Addressing inappropriate treatment of dealers by manufacturers
Enforcing manufacturer accountability for unlawful actions against dealers
Conforming California franchise laws to recent actions in other states

“This is a significant step forward in our commitment to a stronger and more equitable new motor vehicle franchise system for California new car dealers. With AB 179 taking effect January 1, 2020 this is a huge victory for all Californians, local businesses and consumers alike. This bill brings California’s new motor vehicle franchise laws into the 21^st century by establishing a level playing field between local independently-owned dealerships and multinational vehicle manufacturers,” said California New Car Dealers Association President, Brian Maas. “Franchise laws exist to govern the relationship between dealers and manufacturers, California was overdue for significant improvements in the laws that will continue to protect dealers, their businesses and their patrons. We are pleased and encouraged that Governor Newsom agrees and supports our approach to improvements in California’s franchise laws.”

CNCDA is appreciative of the work achieved by the author and all stakeholders on AB 179 and will remain committed to a stronger, more protected new motor vehicle franchise system.

For more information on the provisions in AB 179, please click here.

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About CNCDA

For more than 95 years, CNCDA has represented the interests of California’s franchised new car dealers. CNCDA members are primarily engaged in the retail sale and lease of new and used motor vehicles, but also provide customers with automotive products, parts, service and repair. Our members sold more than 2 million cars and trucks in 2018 and employ more than 140,000 Californians, significantly contributing to our state’s economy. As the nation’s largest state association of franchised new car and truck dealers—with nearly 1,200 members—CNCDA serves its members by providing legal compliance and legislative, regulatory and legal advocacy. For more information, visit www.cncda.org.

California Green Vehicle Report: 2019 Q3

Cal Alt Powertrain Report Q3 19

California Electric and Hybrid Vehicle Sales Increasing, Other Powertrains Decreasing in Sales

Contact: Jenny Dudikoff
Phone: 916-441-2599

SACRAMENTO, CA – The California green vehicle market continues to experience increases year over year, specifically in the hybrid and electric vehicle space. According to the California Green Vehicle Report, while these vehicles have achieved an all-time market high, market trends for other powertrain types show notable decreases. Despite the progress in green vehicle sales, consumers still overwhelmingly prefer gasoline powered vehicles.

“While the new vehicle market is experiencing a slight decrease in sales, we are encouraged that consumers are still purchasing vehicles. With an increase in electric and hybrid vehicle sales, it is safe to say that California consumers are opening up more to the idea of alternative vehicles, but the traditional gas powered vehicle is by far still the preference of more than eighty percent of California drivers,” said California New Car Dealers Association Chairperson, Ted Nicholas of Three-Way Chevrolet in Bakersfield. “California still has a long way to go to address consumer concerns when it comes to Zero Emission Vehicles, including issues like charging infrastructure, convenience, range and affordability. These factors cannot be ignored, and all play a role in consumer purchasing behavior,” Nicholas added.

Electric vehicle sales in California have increased dramatically so far in 2019 from this time last year, experiencing an increase of 63.7 percent. Hybrid vehicle sales are up by 22.1 percent year to date. This trend holds true regionally, where combined electric and hybrid vehicle sales are up 14.9 percent in Northern California and 9.9 percent in Southern California.

“While electric vehicle sales are up quite significantly year to date, it is noteworthy that the vast majority of the electric vehicle market sales can be directly attributed to Tesla’s Model 3, with more than 33,000 sales year to date. This begs the question: is this sustainable or is this a temporary swing in the marketplace when considering Tesla’s distribution timelines,” stated Brian Maas, California New Car Dealers Association President. “There is a lot to consider when looking at these electric vehicle numbers, it is premature to assume this type of consumer behavior and purchasing trends of one particular brand are permanent.”

Gasoline powered vehicle sales are down 7.3 percent year to date, but consumers are still purchasing the traditional Internal Combustion Engine (ICE) more than 80 percent of the time, with overall sales making up 81.6 percent of the market.

Additionally, brand share in the alternative powertrain market has shifted this year. With Toyota typically being the front runner, Tesla now takes that title with 32.6 percent market share. Rounding out the Top 5 California brands for hybrid, plug in hybrid, electric and fuel cell vehicles are Toyota, Honda, Ford and Lexus.

The California Green Vehicle Report provides comprehensive information on the state’s green vehicle market. The report includes a segment watch, including top 20 best-selling alternative powertrain vehicles; best sellers in market segments including hybrid, plug in hybrid, electric and fuel cell; market trends by powertrain type and brand shares in alternative powertrain market. The complete report can be accessed on CNCDA’s website here.

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California Green Vehicle Report is produced for CNCDA by Auto Outlook, Inc., an independent research company specializing in the analysis of statewide and regional automotive markets. When reporting these auto industry trends please acknowledge the Data Source: IHS Markit.

About CNCDA

For more than 95 years, CNCDA has represented the interests of California’s franchised new car dealers. CNCDA members are primarily engaged in the retail sale and lease of new and used motor vehicles, but also provide customers with automotive products, parts, service and repair. Our members sold more than 2 million new cars and trucks in 2017 and employ more than 140,000 Californians, significantly contributing to our state’s economy. As the nation’s largest state association of franchised new car and truck dealers—with nearly 1,200 members—CNCDA serves its members by providing legal compliance and legislative, regulatory and legal advocacy.

California New Car Dealers Unanimously Granted DMV Investigation Sought in Volvo Petition

Contact: Jenny Dudikoff
Phone: 916-441-2599

SACRAMENTO, CA – The California New Car Dealers Association (CNCDA), representing nearly 1,200 new car dealerships statewide, successfully convinced the New Motor Vehicle Board (NMVB) on August 15^th to unanimously direct the Department of Motor Vehicles (DMV) to conduct an investigation into Volvo Car USA concerning Care by Volvo (CbV).

At a public hearing before the NMVB to consider the petition filed earlier this year by CNCDA, the Association presented arguments against Volvo, claiming that as a licensee of the DMV, Volvo has been in violation of the California Vehicle Code (VC) by introducing CbV.

CbV is aimed at getting consumers to lease their cars directly from Volvo, instead of buying or leasing them directly from a Volvo dealership. Described by Volvo as a “subscription” program, CbV offers customers a two-year lease with a fixed, standardized, pre-determined monthly charge including cost of the vehicle, insurance, maintenance, road hazard protection and normal wear and tear. CbV is currently available for two Volvo models – the XC40 and the S60. Both models are also sold and leased by Volvo dealers directly to consumers outside of the CbV program.

CNCDA claims allege that the CbV program is illegal and violates several provisions in the California VC aimed at protecting franchisees and consumers, each of which constitutes a separate ground for disciplinary action against Volvo’s DMV license under the law.

The NMVB unanimously agreed that CNCDA’s claims were warranted and directed the DMV to investigate the following specific allegations:

Care by Volvo Creates Competition Between Manufacturer and Dealers
- CbV diverts customers away from dealers to Volvo with the ultimate goal of bypassing the franchise model entirely.
- Such business practices are prohibited under California law and undermine the fundamental purpose of California’s robust new motor vehicle regulatory system.
Volvo’s Failure to Give Written Notice to Franchisees and the Board About CbV
- The VC prohibits franchisors such as Volvo from making franchise changes that would “substantially affect the franchisee’s sales or service obligations or investment” absent 60 days’ written notice to the affected dealers and to the NMVB.
- CbV is a franchise modification as it fundamentally alters the way dealers sell vehicles and requires a notice to the franchisee and to the NMVB which Volvo did not provide.
The CbV Program Preferentially Allocates Vehicles and Refers Sales to Dealerships Controlled in Part by Volvo
- California auto manufacturers are prohibited from giving preferential treatment to dealerships controlled by them in whole or in part.
- Volvo assigns a share of certain highly desirable, limited supply vehicles to CbV dealers to the exclusion of non-CbV dealers who are not controlled by Volvo.
The Care by Volvo Program Undermines the Purpose of Prohibiting Payment Packing
- CbV’s flat monthly lease amount conceals the actual cost of the CbV vehicle and the bundled services and fails to disclose that the costs will vary between CbV customers.
- California law mandates that dealers disclose, prior to contract drafting, all charges for goods and services to be added to a contract for the sale of a vehicle. Volvo seeks to escape this restriction by requiring dealers to perform its DMV paperwork.

“We are extremely pleased with the outcome of the hearing and are encouraged that the New Motor Vehicle Board agreed that all four of our claims against Volvo deserve DMV investigation. This is just the first step in ensuring that manufacturers, specifically Volvo, stop going around their franchisee business partners in an attempt to retail vehicles directly. Franchise laws exist to protect dealers from this type of behavior,” stated Brian Maas, President of the California New Car Dealers Association. “Our dealer members support innovation, including subscription-based models, but we are against violating the law. There is a right way and a wrong way to do business in California, Care by Volvo is the wrong way. We look forward to the results of DMV’s thorough investigation into our claims and are hopeful that this illegal behavior will be stopped and punished.”

The NMVB also requested the DMV provide the Board with a written report on the results of its investigation within 180 days.

For more information and details of the petition, please click here.

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About CNCDA

For more than 95 years, CNCDA has represented the interests of California’s franchised new car dealers. CNCDA members are primarily engaged in the retail sale and lease of new and used motor vehicles, but also provide customers with automotive products, parts, service and repair. Our members sold more than 2 million new cars and trucks in 2018 and employ more than 135,000 Californians, significantly contributing to our state’s economy. As the nation’s largest state association of franchised new car and truck dealers—with nearly 1,200 members—CNCDA serves its members by providing legal compliance and legislative, regulatory and legal advocacy.

Auto Outlook: 2019 Q2

California Vehicle Market Trending to Fall Below 2 Million Sales in 2019

California Vehicle Market Trending to Fall Below 2 Million Sales in 2019

Contact: Jenny Dudikoff
Phone: 916-441-2599

SACRAMENTO, CA – The California new vehicle market is experiencing a mild decline as we proceed through the second half of 2019. As predicted, sales are expected to decline 4.6 percent overall in 2019. According to the California Auto Outlook Second Quarter 2019, new vehicle sales fell 5.6 percent during the first half of the year, with light truck sales declining 1.1 percent and passenger car sales falling 10.8 percent.

“As we continue to see the California vehicle market shift, with a slight decline in new car sales, we remain encouraged that numbers continue to stay above historical industry standards. It is not a huge surprise that after years of increased sales, we are seeing the market level off, reflecting the broader economic and political climates. However, there is optimism that used car sales are up, demonstrating that consumers are still purchasing vehicles, but their purchasing behaviors are shifting more towards the used vehicle market,” said California New Car Dealers Association Chairperson, Ted Nicholas of 3 Way Chevrolet Cadillac in Bakersfield

The used vehicle market for the first half of 2019 remains solid, increasing by more than 5 percent. Light truck sales were up 8.5 percent and passenger car sales were up by about 3 percent from this time last year.

Regional sales continue to stay on trend with state and national sales. Northern California experienced an overall 5.4 percent decline in new vehicle sales, with a 6.5 percent decrease in passenger car sales and a decrease in light truck sales by 4.5 percent. Southern California experienced more of a decline with a 5.9 percent overall decrease, including passenger car sales falling by 11 percent and light truck sales dropping just 1.4 percent.

Counter to the overall downward trend, electric and hybrid vehicle sales have experienced growth, reaching 13 percent combined market share for the first half of 2019. Electric vehicles are on pace to exceed 100,000 sales for 2019 and make up 5.6 percent of the market share while hybrids come in with 5.2 percent of the market. Plug-in hybrid sales continue to fall and make up only 2.2 percent of the market share.

New car sales increased for eight brands so far this year, with Toyota and Honda holding on to first and second place as the most popular brands in California. The Honda Civic continues to stay on top as California’s best-selling passenger car and the Ford F-Series comes in as the best-selling light truck.

The California Auto Outlook Second Quarter 2019 Market Report provides comprehensive information on the state’s new vehicle market. The report includes: a segment watch, including the top five models in each segment; a market perspective, comparing California nationally; brand scoreboards; a five-year sales trend comparison and more. The complete report can be accessed on CNCDA’s website at: www.cncda.org

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California Auto Outlook, is produced for CNCDA by Auto Outlook, Inc., an independent research company specializing in the analysis of statewide and regional automotive markets. When reporting these auto industry trends please acknowledge the Data Source: IHS Markit.

California’s New Car Dealers Contribute to a Greener Sacramento

Contact: Jenny Dudikoff
Phone: 916-441-2599

SACRAMENTO, CA – California’s new car dealers have stepped up and made a significant contribution to making Sacramento a greener place to live, work and play. Sacramento residents and visitors can now enjoy a new, convenient, and easy to use electric vehicle (EV) charging station to accommodate their EV needs, right in the heart of Midtown Sacramento.

The California New Car Dealers Association (CNCDA), owners of the parking lot on the busy corner of 16^th and L Street, collaborated with Electrify America (EA), to provide four EV DC Fast chargers to the urban core of Sacramento. Now up and running, they are among the first of ten EA charging sites that will be established in the Sacramento region.

“We are excited to be part of the green movement taking place locally in Sacramento. Having the opportunity to provide the crucial and conveniently located space for these DC Fast Chargers is a testament to the commitment of California’s new car dealers statewide. Our members want to be part of the solution in making California a greener place to live and do business,” said Brian Maas, president of the California New Car Dealers Association. “We are eager to become more involved in local community efforts promoting zero emission vehicles and will continue to lead by example.”

DC Fast Chargers

As part of a nationwide, multi-year plan, EA’s infrastructure in the CNCDA parking lot includes ultra-fast DC Fast Chargers, capable of 50, 150, and 350 kW, designed and tested for ease of use with brightly lit body and screen making them easy to find in a parking lot day or night, including a long cable to increase accessibility for users. DC Fast Chargers are capable of providing a full charge to compatible electric vehicles in less than 30 minutes.

CNCDA’s Commitment to Zero Emission Vehicles (ZEVs)

In 2018, California’s new car dealers sold more than 240,000 ZEVs, plug-ins, and hybrids, making up 12 percent of the new vehicle market statewide. This accounts for nearly 50 percent of ZEV sales nationwide. California’s new car dealers remain committed to leading the nation in ZEV adoption. To learn more about California’s new car dealers’ commitment to ZEVs, click here.

Sac-to-Zero

As the location host, CNCDA will be participating as a partner in a highly anticipated community event, Sac-to-Zero, taking place Saturday, June 8^th from 5:00PM – 8:00 PM. Located in the CNCDA parking lot at 1601 L Street, Sac-to-Zero will be celebrating the movement towards zero emission vehicle transportation in Sacramento. Sac-to-Zero will take place during Sacramento’s Second Saturday, and is a free, family event that will have music, food, drinks, test drives and more information about how Sacramento residents can increase their ZEV footprint in the region. For more information on the event, please visit www.SactoZero.com/launch.

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About CNCDA

For more than 95 years, CNCDA has represented the interests of California’s franchised new car dealers. CNCDA members are primarily engaged in the retail sale and lease of new and used motor vehicles, but also provide customers with automotive products, parts, service and repair. Our members sold more than 2 million new cars and trucks in 2017 and employ more than 140,000 Californians, significantly contributing to our state’s economy. As the nation’s largest state association of franchised new car and truck dealers—with nearly 1,200 members—CNCDA serves its members by providing legal compliance and legislative, regulatory and legal advocacy.

Auto Outlook: 2019 Quarter 1

California Vehicle Market Trending to Exceed 1.9 Million Sales in 2019

California Vehicle Market Trending to Exceed 1.9 Million Sales in 2019

SACRAMENTO, CA – The California new vehicle market is off to a solid start for 2019. While the market experiences a mild decline, new vehicle registrations are trending to exceed 1.9 million sales in 2019. According to the California Auto Outlook First Quarter 2019, market share for non-luxury SUV’s continues to increase, reaching 30 percent, while market share for small car sales decreased from 24 percent to 20 percent since last year.

“The California vehicle market continues to plateau, while experiencing minor decreases in sales. However, after several years of big increases, it is no surprise that sales are leveling off. Certain market segments are still experiencing increases, demonstrating consumers’ continued demand for larger, family friendly vehicles and more affordable vehicles. We’ve seen this trend hold true for a number of quarters now, consumers want vehicles with more flexibility to meet their transportation needs,” said California New Car Dealers Association Chairperson, Ted Nicholas.

Regional sales are on trend with state and national sales, with Northern California showing less than a 5 percent decline over last year and Southern California slightly exceeding that decline at 5.2 percent decline. Northern California passenger car sales fell 3.9 percent, while light truck sales are down 5.1 percent. In the south, passenger car sales fell 9.6 percent and light trucks sales are down 1.3 percent.

Additionally, electric vehicle sales continue to experience growth, up about one percent from this time last year, from 4.7 percent to 5.6 percent of total market share. While electric vehicle sales continue to increase, plug in hybrid sales have fallen, dropping a percentage point, from 3.1 percent to 2.1 percent since this time last year.

New car sales increased for 12 brands so far this year, with Toyota and Honda ranking first and second in the state and the Honda Civic staying on top as California’s best-selling model.

The California Auto Outlook First Quarter 2019 Market Report provides comprehensive information on the state’s new vehicle market. The report includes: a segment watch, including the top five models in each segment; a market perspective, comparing California nationally; brand scoreboards; a five-year sales trend comparison and more. The complete report can be accessed on CNCDA’s website at: www.cncda.org

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About CNCDA

For more than 95 years, CNCDA has represented the interests of California’s franchised new car dealers. CNCDA members are primarily engaged in the retail sale and lease of new and used motor vehicles, but also provide customers with automotive products, parts, service and repair. Our members sold more than 2 million new cars and trucks in 2018 and employ more than 135,000 Californians, significantly contributing to our state’s economy. As the nation’s largest state association of franchised new car and truck dealers—with nearly 1,200 members—CNCDA serves its members by providing legal compliance and legislative, regulatory and legal advocacy.

AB 179, California’s New Motor Vehicle Franchise Bill, Unanimously Passes Out of First Committee

Contact: Jenny Dudikoff
Phone: 916-441-2599

SACRAMENTO, CA – AB 179, the California New Car Dealers Association’s priority bill for the 2019 legislative session, was heard yesterday in the California State Assembly. With bipartisan support, AB 179 established a huge win, unanimously passing out of its first policy committee – Assembly Transportation, with a vote of 14-0.

AB 179, authored by Assemblymember Eloise Reyes (D-San Bernardino), seeks to strengthen and protect California’s franchise system, California new car dealers and new car buyers. AB 179 contains a number of provisions designed to improve California’s franchise laws by:

Strengthening California’s franchise laws
Addressing inappropriate treatment of dealers by manufacturers
Enforcing manufacturer accountability for unlawful actions against dealers
Conforming California franchise laws to recent actions in other states

“AB 179 started where last year’s AB 2107 left off, including topics that are of critical importance to the dealer franchise system in California. While we believe that Governor Brown got his veto wrong, we are confident that the legislature and the new administration will see why this is good policy not only for California local businesses but also California new car buyers,” said California New Car Dealers Association Chairperson, Ted Nicholas of Three-Way Chevrolet in Bakersfield. “CNCDA and our members statewide are eager to work together with the author and stakeholders on this bill and we are committed to achieving a stronger, more equitable new motor vehicle franchise system.”

With passage out of its first committee, AB 179 will be heard next month in the Assembly Appropriations Committee.

For CNCDA background on the bill, please visit our AB 179 Factsheet. For full bill text, please click here.

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About CNCDA
For more than 95 years, CNCDA has represented the interests of California’s franchised new car dealers. CNCDA members are primarily engaged in the retail sale and lease of new and used motor vehicles, but also provide customers with automotive products, parts, service and repair. Our members sold more than 2 million new cars and trucks in 2018 and employ more than 135,000 Californians, significantly contributing to our state’s economy. As the nation’s largest state association of franchised new car and truck dealers—with nearly 1,200 members—CNCDA serves its members by providing legal compliance and legislative, regulatory and legal advocacy.