Mitsubishi sues its dealers over transfer of cars to VW

Mitsubishi claims the dealership’s interior and exterior signage does not meet its standards

The owners of Kmart Mitsubishi Corp. in Burlington, Wash., find themselves in hot water, facing a lawsuit from Mitsubishi Motors North America. The U.S. unit of the Japanese automaker accused the dealer of breach of contract and infringement of trademark standards.

According to a federal lawsuit seen automotive newsKamart Mitsubishi failed to comply with the brand’s mandatory visual identity plan – a corporate initiative that requires dealers to adopt a unified brand. The plan calls for specific exterior and interior design elements and standardized signage so every Mitsubishi plant across the country looks unmistakably… Mitsubishi.

READ: Mitsubishi accused of ‘sabotaging’ dealership in $6M lawsuit

However, Mitsubishi Motors North America said the dealership’s signage did not meet its standards. It warned the company about its breach in November and insisted it had until December 20 to join the scheme. Mitsubishi Motors North America’s brand followed suit after dealers failed to do so. But it’s not just the signage, or lack thereof, that’s fueling the controversy.

The lawsuit also alleges the dealer’s service area breached the contract. According to the automaker, Karmart Mitsubishi improperly shared its service space with neighboring Volkswagen franchise Karmart VW. Initially, the shared services agreement was limited to now-closed Suzuki dealerships, but Volkswagen was not involved in the deal. Mitsubishi claimed that this setup violated their agreement and caused unnecessary confusion.

While sharing a service area with a Volkswagen franchise may not seem like a big deal, the lawsuit adds that Kmart Mitsubishi has been moving vehicles from its service areas to Volkswagen’s service areas. This clearly upset the brand, which immediately got lawyers involved. In fact, the lawsuit was filed on December 20, the same day as the deadline for dealers to comply with the visual identity plan.

Mitsubishi said it was “forced to seek judicial intervention to protect the integrity of its brand and, more importantly, to protect the public from confusion.”

The dealers involved have not yet responded to the lawsuit.

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