The first automobile sale dates back to the 1880s when Karl Benz designed a gas-powered vehicle known as the Motorwagen. Throughout the late 1880s and 1890s, Benz sold around 25 Motorwagens. But by 1903, demand was growing, and approximately 60,000 automobiles were being produced each year.
Initially, auto manufacturers were responsible for selling cars, but the model shifted when Fred Koller opened the first dedicated car dealership in 1889 and the franchise dealership model was born.
The franchised system has worked well since that day. It is the economic engine of our communities, creating aggressive price competition for consumers and preventing manufacturers from creating monopolies. The franchised system protects consumer safety, creates good-paying local jobs, generates local and state tax revenues and many other economic benefits.
Nationally, we have seen a trend of factory-direct sales to consumers, which is nothing short of an attempt to monopolize the market, eliminate competition and limit consumer access to independent warranty and safety recall services. This trend is not good for consumers and not good for Idaho.
During the 2024 legislative session, Rep. Megan Blanksma and Sen. Doug Okuniewicz, with the help of Jim Addis of IADA, brought forth legislation that clarified and modified the existing roles of both Idaho’s franchised dealers and their manufacturer partners to ensure each party is treated fairly in this age of rapid change. H689 ensures that free local markets continue to exist in Idaho, providing Idaho consumers with the choice of free market competition, which ultimately benefits us all.
Specifically, H689 modernizes existing anti-competition language to ensure that manufacturers cannot compete with franchisees in retail vehicle sales, leases and warranty work. H689 also eliminates the agency model and prohibits manufacturers from requiring that dealers install public-facing DC fast chargers.
Gov. Little signed H689 into law on Wednesday, March 27, 2024. This is a major victory for franchised dealers, the franchise model, our industry partners and free markets in the state of Idaho.
H689 is a culmination of two years of hard work, including the passing of two separate franchise bills that laid the foundation for Idaho dealer’s future success and the continuation of the franchise model in Idaho. H689 ensures the free market continues to work — to the benefit of both the manufacturers and their franchisees.
