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California dealer group files petition against Motor Village LA

Motor Village LA is one of Chrysler’s newest projects, combining all five of their American-sold brands in one (immaculate) LA-based dealership but according to the California New Car Dealers Association, Motor Village LA is in violation of California law that prevents automotive manufacturers from owning dealerships within 10 miles of any other related dealership.


Motor Village LA made its official grand opening just before the 2010 LA Auto Show and thanks to the good people a Chrysler, I was among those invited to the black-tie affair at the incredible Chrysler Group dealership. In speaking with a few locals that night, there was a rumor floating about that some local dealerships were unhappy with the fact that Chrysler was operating Motor Village LA but in the fine print, it turns out that Chrysler Realty only owns the building and not the dealership or business itself.

This fine print seemingly alleviates Chrysler of any legal roadblocks with California law against automakers owning/operating a dealership within 10 miles of privately owned dealerships that service the same brands. Inside of a 10 mile radius of Motor Village LA there are three Chrysler-branded dealerships and because of that, the California New Car Dealers Association has filed the petition with the California New Motor Vehicle Board – asking for Motor Village LA’s business license to be suspended or revoked.

Chrysler disagrees that this is true and according to Automotive News, the automaker "looks forward to discussing the matter with the Department of Motor Vehicles." While Chrysler only owns the land and building, seemingly leaving the business end of things up to the actual owner of Motor Village LA, Chrysler obviously has a heavy hand in this project as the company is charging Motor Village no rent for the first six months. After the first six months, Motor Village LA will pay rent to Chrysler Realty amounting to just $50,414 starting in May 2011 and gradually ramping up to $90,000 in 2015. 50-90k doesn’t seem like much of a deal but the dealers association claims that the market value of the monthly rent is closer to $200k per month.

Chrysler plans for Motor Village LA to be the first of these massive all-encompassing Chrysler Group dealerships, using this one as a model for those with whom Chrysler has no legal affiliation other than providing vehicles. As more news on this issue becomes available, will bring you any breaking information!

Pictured: TLC’s “Cake Boss” Buddy Valastro with the giant Fiat 500 cake unveiled at the grand opening of the Motor Village LA.

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