The unconditional buy-back clause in certain dealer/manufacturer agreements places RV industry unity in jeopardy, said Recreational Vehicle Industry Association (RVIA) President Dave Humphreys during a speech earlier this month.
Humphreys, in a speech to Florida RV Trade Association annual convention attendees on Sept. 6, said he is particularly worried about the situation in Texas, where an RV dealer has the legal right to demand that a manufacturer re-purchase its units that are in that dealer’s inventory.
“You (a dealer) snap your fingers, nothing’s been violated, all the agreements have been fulfilled, but for whatever reason, you snap your fingers and they (a manufacturer) have to come and buy them (RVs) back,” Humphreys told the gathering at the Sanibel Harbour Resort. “That is the law in Texas, and if that kind of thing expands, I think it’s bad for dealers, not just manufacturers.”
No manufacturers have been put out of business as a result of such dealer-demanded buy-backs, but Humphreys worries that small to medium-size manufacturers are vulnerable. The RVIA president said he is aware of situations where a dealer said, “ ‘Well, we have a little dispute going here. I think I’m entitled to this, you don’t think I am, (so) you want to come and buy it all back?’ That is happening.
“Now, tell me why that’s fair to a dealer in some other state who isn’t getting whatever this benefit is?” Humphreys asked. “I just think it’s a nightmare. I can’t imagine anyone thinking that’s fair or wise.”
Squeezing small to mid-size manufacturers out of business would be harmful to the dealer body because it would reduce the amount of product variety that is available, Humphreys believes. “So it seems to me it’s not in the best interest of dealers in any state to have that weapon.”
Certain manufacturers need to clean up their acts too, Humphreys said, particularly when it comes to selling to dealers who have not invested in aftermarket service facilities.
As Humphreys said he told an Indiana manufacturer recently, “Why is it fair to start (selling inventory to) a dealership down the road, or what your (existing) dealer thinks is too close, when they (the new dealer) don’t even have service. You’re sending the wrong message to the dealer who did do a good job, and that’s not right. That will hurt industry unity. It sends the wrong message to the dealer, it sends the wrong message to the consumer. We have to practice what we preach too. It isn’t a one-way street.”