MENU
SEARCHState association says direct sales of luxury EV violate franchise law
Association President Brian Maas says direct sales are 'stripping vital consumer protections.'
California New Car Dealers Association
California auto dealers filed a lawsuit against Honda’s U.S. division and Sony Honda Mobility, saying their Afeela brand vehicle sales violate state franchise law.
The action follows a cease-and-desist letter filed by the California New Car Dealers Association in May that demanded an end to direct sales of vehicles.
Filed in Los Angeles County Superior Court, the suit accuses the partner companies of illegally bypassing Honda and Acura auto dealerships to sell vehicles directly to consumers. It cites a 2023 state law barring automakers from competing with their auto dealers via affiliated brands.
Sony Honda Mobility is a joint venture formed between Honda and Sony Group Corp. in 2022 to sell “high-value-added” electric vehicles and “provide services for mobility.” The venture is accepting refundable $200 reservations for the Afeela 1 car.
The vehicle starts at a base price of $89,900. A “Signature” trim is available for $102,900.
"This is a direct attack on the 161 franchised Honda and Acura dealers in California that have been loyal partners in building the brand's reputation and success for decades," said CNCDA President Brian Maas in a press release announcing the lawsuit.
Maas said the venture tried to stop passage of the state law when it was being considered in the California legislature.
"They are now knowingly violating the law, hoping they won't be caught,” he said. “It's our job to protect the dealers directly being harmed from their actions."
In the lawsuit, the dealers association aims for an “immediate” stop to Afeela sales and ultimate enforcement of the franchise law.
"By cutting dealers out, they're stripping vital consumer protections like local service support, transparent pricing, and warranty assistance, all while undermining the millions these dealers have invested in their facilities, employees, and communities,” Maas said. “We will not allow a manufacturer to turn its back on the very network that made it profitable in the first place."
The CNCDA has also sued Volkswagen affiliate Scout for its direct auto sales.
Sony-Honda venture cancels two planned models, the first of which had been pegged for a mid-2026 California delivery debut. The brand’s direct sales had been challenged by the state’s auto dealers, but the venture cites Honda’s EV retreat.
Read More →
Softening prices, rising credit availability and higher tax refunds could be behind February’s sales pace rise and accompanying dip in inventory, according to Cox Automotive.
Read More →
The wholesale automotive market fared remarkably well given the U.S.-Israel war on Iran, Black Book analysts reported.
Read More →
The agency sent warning letters to dozens of auto groups about what it described as illegal practices and urged them to ensure their pricing policies enable transparency with consumers.
Read More →
New-vehicle sales fell year-over-year for the fifth month in a row in February, making retail deliveries the slowest they’ve been since 2023, according to a CarGurus report.
Read More →
The automaker says its California skunk works is already finding efficiencies to lighten traditionally heavy electric vehicles for lower cost, plus extended range.
Read More →
Both vehicle values and conversion rates sped up last week as two segments outperformed in the pre-spring burst of buying.
Read More →
GM says it sells the cheapest electric vehicle in the U.S. market. It explains how it made improvements to the entry-level EV while keeping its price down.
Read More →
A Tennessee-based automotive group with deep industry history picked up the well-established Honda store, rebranding it.
Read More →
GM says more than 750 dealers across the U.S. are enrolled in CarBravo and that in January CarBravo dealers sold over two times the certified volume of Chevrolet, Buick and GMC dealers using traditional CPO.
Read More →
