April 23, 2007 – Montana law sets potential limit on dealer inventory

Team Bozeman Motorsports in Bozeman, Mont., has successfully advocated for a new state law that more clearly defines the relationship between an OEM and a dealer, specifically limiting the amount of inventory a dealer has to take on.
Dealers in Montana won’t be required to take more than a 90-day supply and OEMs “can’t offer incentives to influence a dealer to take more units,” said Curt Lance, general manager at Team Bozeman.
The law prohibits OEMs from selling or offering similarly equipped model units to dealers at different prices, and from using a promotion plan, marketing plan, allocation plan, flooring assistance plan or other similar devices that result in a lower actual price on units, parts or accessories being charged to one dealer over another.
The law also makes it illegal to require dealers to purchase advertising displays or to remodel or renovate facilities in order to receive a model or series of vehicles.
Similar bills are being pushed in Texas, Maine and Minnesota.
Lance says he pushed for the bill as a result of what he feels are unfair practices conducted by Polaris Industries Inc. He said Polaris presented arbitrary allocations to dealers for the March through August 2006 ATV order, inflated carry-over inventory and modified some dealer objectives. He also says the manufacturer also provided incentives to some of the dealers whose allocations were modified, while requiring other dealers to take the full allocation to earn the same incentives.
“Hopefully it will signal to manufacturers that they can’t put a gun to our heads any longer,” Lance said.
In April 2006, Team Bozeman, along with four other dealerships, filed for Class Action Arbitration. The two dealers and Polaris will meet with a mediator from the American Arbitration Association in May.
Polaris spokesperson Marlys Knutson says the manufacturer wouldn’t comment on pending litigation.

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