Stellantis sues North Carolina dealer for evading mandatory buybacks

A Wilkesboro dealership pulled out of its contract with Stellantis and wants the automaker to buy back its stock, but the company says the dealership’s “deceptive” behavior means it shouldn’t comply

Stellantis is sitting on a mountain of inventory and recently disclosed a 48% drop in profits in the first six months of the year. So the last thing it wants to do is buy back nearly 4,000 unsold cars from a North Carolina dealer for $180 million. Stellantis is currently suing the dealer to avoid that fate.

Under North Carolina law, automakers must buy back dealers’ new car inventory when two parties part ways, and in June of this year, Randall Marion, head of the Chrysler-Dodge-Jeep-Ram dealership in Wilkesboro, wrote a letter to Stellantis notifying them that he would terminate the sales and service contract between the two parties.

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While Stellantis has no objection to Marion’s exit from the company, it does have an objection to the repurchase of its 3,841 fleet vehicles and hopes to be relieved of that obligation through a legal ruling. Automotive News The automaker claimed that dealers decided to order 1,508 fleet vehicles for inventory using their own fleet accounts, which violated its rules that fleet vehicles can only be ordered if there is a customer who wants the vehicle.

“In the past three years alone, Marion has ordered thousands of fleet devices, many of which were ordered on behalf of specific customers,” the lawsuit states. “Marion recently disclosed that its reported sales of fleet devices to specific customers were inaccurate and that Marion had accumulated an unusually large inventory of 3,841 fleet devices.”

Many of the vehicles are large pickup trucks that have been in high demand during the pandemic, and Stellantis claims dealers planned to stockpile large numbers of pickup trucks to sell at high prices. Stellantis’ legal team claims that dealers unknowingly ordered an additional 2,273 vehicles using the fleet numbers of two large corporate customers.

The lawsuit also alleges that Marion tried to get it to buy back hundreds of vehicles it purchased from other dealers, and says modifications to some of its fleet vehicles would automatically invalidate state law requiring Stellantis to buy back those vehicles.