Texas Senate Bill SB2195

Texas 2023 - 88th Regular

• Filed: 3/9/23

Caption

Relating to fair allocation requirements for manufacturers, distributers, or manufacturer representatives.

Impact

The bill proposes significant changes to the relationship between manufacturers and dealers, emphasizing accountability in the allocation process. By legally obligating manufacturers to allocate fair inventory, the legislation seeks to mitigate potential inequities faced by dealers, particularly smaller dealerships that might struggle under the burden of insufficient vehicle supply. The requirement for timely complaint resolution by the Department of Motor Vehicles also adds a layer of consumer protection, reinforcing the rights of dealers who may feel disadvantaged.

Summary

SB2195, introduced by Senator Menéndez, aims to establish fair allocation requirements for manufacturers, distributors, and manufacturer representatives relating to the distribution of motor vehicles to dealers. It mandates that these parties must provide a sufficient allocation of vehicles to each dealer at least quarterly, enabling them to meet sales expectations as set by the manufacturers. This provision is designed to ensure that motor vehicle dealers are not hindered by a lack of inventory, which could prevent them from achieving their sales targets.

Sentiment

Discussions regarding SB2195 reveal a generally supportive sentiment among dealers and advocates for fair trade practices, who view the bill as a necessary measure to promote equity in vehicle distribution. Conversely, some manufacturers may express resistance to these provisions, citing operational constraints or supply chain challenges that could complicate compliance. Overall, the sentiment appears to align with protecting local business interests against large manufacturing entities.

Contention

Notable contention surrounds how the bill defines 'good cause' for manufacturers who may fail to comply with the allocation requirements. The legislation allows manufacturers to defend against claims by demonstrating supply limitations that affect all dealers equally. Critics may argue that this defense could be misused, potentially allowing manufacturers to sidestep accountability. Additionally, there may be debates regarding the effectiveness of the proposed remedies available to dealers, ensuring that the measures taken are both fair and enforceable.