With the proposed changes, AB 2107 would impact the regulatory framework governing the relationships between manufacturers and franchisees in California. The bill intends to reinforce the obligation of franchisors to reimburse dealers at retail rates for labor and parts used in servicing warranties, which was previously ambiguous under state law. By addressing the inadequacies of existing regulations, this bill seeks to enhance protections for franchisees and ensure they are justly compensated for their work, subsequently facilitating a more robust economic environment within the automotive industry.
Assembly Bill 2107, introduced by Assembly Member Reyes, seeks to amend existing provisions within the Vehicle Code related to the New Motor Vehicle Board. The bill is designed to ensure that motor vehicle dealers are treated fairly by manufacturers and to provide clearer procedures for warranty and compensation disputes. Key objectives include extending the board's authority until January 1, 2024, to hear protests regarding manufacturers' sales restrictions and establishing fair compensation standards for warranty work done by dealers. This restructuring aims to create a more regulated and equitable distribution network for new vehicles in California.
The sentiment surrounding AB 2107 appears largely positive among proponents who argue that it provides essential protections for dealerships. Supporters view it as a critical step toward rectifying discrepancies in the current franchise system, fostering fairness and accountability. However, potential concerns may arise regarding how these regulatory changes could impact manufacturer operations and the market dynamics of the automotive sector, pointing to a need for balanced enforcement to uphold the interests of both parties involved.
Points of contention include the implications of removing the requirement for the New Motor Vehicle Board to handle certain appeals, which may streamline conflict resolution but potentially marginalize dealer grievances that are not public. Furthermore, the bill introduces criminal penalties for manufacturers engaging in specified unfair practices, raising concerns over the enforcement and interpretation of these new restrictions. These aspects could lead to legal ambiguities or additional disputes, suggesting the need for careful implementation and oversight of the revised provisions.