Texas Senate Bill SB2279

Texas 2017 - 85th Regular

Caption

Relating to the ownership, control, or operation of a franchised or nonfranchised dealer or dealership by certain manufacturers.

Impact

The passage of SB 2279 is intended to enhance fairness and competition within the automotive marketplace by limiting the direct participation of manufacturers in dealership operations. This is particularly significant in maintaining the independence of dealerships, preventing any potential conflicts of interest where manufacturers could potentially leverage their control to disadvantage independent dealers. Furthermore, this aligns with existing regulations that seek to protect the interests of consumers and dealers alike.

Summary

Senate Bill 2279 addresses the ownership, control, and operation of both franchised and nonfranchised dealers or dealerships by certain manufacturers. Specifically, it amends Section 2301.476 of the Occupations Code to clarify the definitions and restrictions surrounding various types of motor vehicles. The key component of this bill prohibits manufacturers or distributors from owning or operating a dealership that sells or services the same type of motor vehicle that they manufacture or distribute, thereby reinforcing the separation between manufacturing and retail operations in the automotive sector.

Sentiment

The sentiment around SB 2279 is generally favorable among independent dealers who view it as a necessary protection against manufacturers potentially overstepping their bounds and undermining established dealers. However, there may be critical voices from manufacturers who feel this bill restricts their ability to engage directly with customers through controlled dealerships. The debate reflects a broader concern about balance in the commercial relationships within the automotive industry.

Contention

Notable points of contention surrounding SB 2279 include concerns voiced by manufacturers about the limitations imposed on their ability to strategically manage their brand representation and sales processes. Critics argue that the restrictions could hinder their capacity to respond to changing market dynamics effectively. Meanwhile, proponents stress the importance of safeguarding the traditional dealership model, which they argue is vital for ensuring customer service quality and local business viability in the face of a rapidly evolving auto industry landscape.