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Dealer body sues carmaker for opening manufacturer owned showrooms

A franchised dealer trade body has started legal proceedings against a niche carmaker for opening its own dealerships.

America's National Automobile Dealers Association will sue Tesla, the Californian prestige electric car company, because it has said it will only open its own showrooms, not franchised.

The Wall Street Journal reports NADA claims that this violates state franchise laws designed to prevent carmakers from setting up company stores in competition with independently-owned franchises.

Tesla doesn't have any independent franchised dealerships in its network, but NADA believes the laws apply nonetheless. It wants the carmaker to develop franchises.

Tesla CEO Elon Musk blogged in response that Tesla does not want to change the rules governing motor retail, but there are no franchises which will be harmed by its opening of dealerships.

According to NADA there are 48 states in the USA which have laws preventing manufacturer-owned dealerships.

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