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N.J. Dealer Sues Kia Motors

May 14, 2013

MAHWAH, N.J. — Mawhah Kia filed a lawsuit against Kia Motors America (KMA) after the manufacturer allegedly threatened to terminate the dealer’s franchise agreement. According to a lawsuit filed April 26, the dealer alleges that KMA didn’t provide enough inventory to sell.

The dealer alleges that “KMA has coerced and intimidated Mahwah Kia, and not acted in good faith … Throughout 2011 and 2012, KMA imposed, and tried to impose, unreasonable standards of sales performance, and/or other requirements upon Mahwah Kia…” the complaint reads. “At times, KMA admonished Mahwah Kia to retail more vehicles than KMA was willing to make available at wholesale to Mahwah Kia.”

In a letter dated Feb. 26, 2013, KMA wrote to Mahwah claiming the dealership was subject to termination for breach of the dealer agreement for failure to “vigorously and aggressively sell and promote Kia products.”

But in the court filing, Mawhah calls the manufacturer’s methodologies for measuring dealer performance, retail sales and customer satisfaction “scientifically flawed and unreasonable.” It goes on to charge the manufacturer’s practices unlawful, citing New Jersey’s automotive franchise laws which prohibit the use of an “arbitrary unreasonable formula or other calculation process” to gauge dealer performance.

Calls seeking further comment from Mahwah Kia Owner Dennis Oberle were not returned.

The dealer, according to the suit, seeks compensatory and punitive damages since KMA allegedly “has caused and continues to cause economic harm to Mahwah Kia.”

Court filings show the defendant was successfully served the complaint on May 3. Kia Motors America Spokesperson Scott McKee said it is company policy not to comment on any pending litigation.

—    Stephanie Forshee

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