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Terminated Dealer Group Suing Mitsubishi For Millions, Alleges It Was ‘Imposslble’ To Make Money

Key Takeaways

  • Kansas City-based dealer group Oakes Auto files lawsuit against Mitsubishi Motors of North America.
  • The lawsuit alleges Mitsubishi mistreats dealers, makes false promises, and describes vehicle allocation as “unpredictable” and “unfair.”
  • Oakes Auto claims it was impossible to make money as a Mitsubishi dealer.
  • The Kansas City dealership is seeking more than $6 million in damages.

Oakes Auto, a terminated Mitsubishi dealership in Kansas City, Kansas, has filed a lawsuit against Mitsubishi Motors of North America. The lawsuit accuses the automaker of “mistreating its dealers by making false promises,” reports Automotive News. The suit claims that the Japanese automaker forced the dealership to jump through hoops to obtain its vehicle allocation, requiring the retailer to purchase “unreasonable advertising displays.”

The suit says the vehicle allocation procedures “were unpredictable, unreliable, unfair, and made it impossible to turn a profit.” Furthermore, Oakes Auto claims Mitsubishi North America is making false promises to dealers to push them out of business. According to the lawsuit, Oakes Auto was described as one of Mitsubishi’s best-performing retailers, selling 121 new cars in 2021 – considerably more than the company’s minimum sales responsibility target of 70 vehicles.

Mitsubishi

Mitsubishi is a Japanese automaker founded in 1870 and is part of the Mitsubishi Group and broader Renault-Nissan-Mitsubishi Alliance. Mitsubishi Motors officially started producing passenger vehicles in 1917, the Mitsubishi Model-A, before building a legacy as the manufacturer of off-roaders like the Pajero. Mitsubishi established a strong presence in motorsport, with models like the Lancer Evolution competing in WRC and the Pajero Evolution taking multiple wins in the Dakar Rally. Its best-ever sales year in the USA was 2002, when it sold 345,915 cars.

Terminated Despite Strong Performance

Mitsubishi notified the dealer in June 2023 that it would be terminated, with the termination made official in September. The lawsuit is not about the termination, with the suit noting, “Oakes Auto no longer wishes to do business with Mitsubishi, given its tortious actions taken in bad faith.” The dealer group also sells Ford, Kia, Buick, and GMC vehicles.

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Apart from the abovementioned claims, the suit says Mitsubishi sabotaged the negotiated sale of the dealer and quashed a deal to sell 64 vehicles to Enterprise for use as rental cars. Even with Oakes Auto’s strong performance, vehicle allocation has been an issue despite the retailer’s perfect sales and satisfaction score for Q1 2023. But the complaints don’t end there.

Mitsubishi dealership
Mitsubishi 

Seeking Millions In Financial Damages

Shortly after Oakes Auto took control of the dealership, Mitsubishi introduced requirements to visually upgrade dealerships. The lawsuit alleges that Mitsubishi did not provide any “grand opening funds” to help offset any of the costs tied to the visual identity upgrades. The sales and service agreement is described as “nothing more than a fraudulent and illusory promise from Mitsubishi” in the suit.

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Those are rather serious allegations, with the dealer group seeking around $219,000 for Mitsubishi’s inability to comply with financial obligations after the termination occurred, $2.4 million for breach of fiduciary duty and the violation of the Automobile Dealers Day in Court Act, and $3.5 million for blocking the sale. CarBuzz has reached out to Mitsubishi USA for comment and will update the story when we receive a reply. It’s worth noting that Mitsubishi has filed a motion to dismiss half of the claims in the lawsuit.

What Does The Future Hold For Mitsubishi?

Over the last two decades, Mitsubishi has suffered a spectacular fall from grace. Once a purveyor of fine sports cars and rugged off-roaders, the brand has been reduced to making anonymous crossovers that, save for the Outlander, are outclassed by the competition. However, the brand has a comeback plan that involves launching a new car every year from 2026 onwards, among other things.

Source: Automotive News

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