As background, Scout Motors is a subsidiary of Volkswagen that seeks to sell its vehicles without franchise dealerships. That’s right: Not only does Scout not plan on using its existing Volkswagen dealers; it does not plan to use dealers at all. Unfortunately, recent comments by Roger Alford, principal deputy assistant attorney general in the Antitrust Division of the DOJ, indicate some in the department may be sympathetic to Scout’s position.

But that is not the end of the story. Fuel was added to this fire when the Alliance of Auto Innovators, the trade association that represents manufacturers with dealers, also submitted comments critical of franchise laws — specifically provisions related to warranty reimbursement and restrictions on opening new sales points. Taken together, those comments have been characterized as a “declaration of war” against dealers by the nation’s manufacturers (the Alliance has since distanced itself from those comments by declaring: “We support the dealership franchise model. Period. Full stop.”).

For GADA and Georgia dealers, this latest eruption in the battle between dealer versus factory sales comes as no surprise. Companies like Rivian and Lucid have tried repeatedly, and unsuccessfully, to convince lawmakers to change Georgia law to allow them to sell without dealers. When their legislative efforts failed, Lucid sued the state of Georgia and argued that our franchise law’s prohibition against direct sales was unconstitutional. Their argument was soundly rejected by the Superior Court of Fulton County, but Lucid appealed that decision, and the case will be heard by the Supreme Court of Georgia this fall. GADA retained counsel and is utilizing its resources to help defend against the Lucid lawsuit.

In the meantime, and on a much brighter note, the Georgia General Assembly passed legislation this year that strengthens Georgia’s franchise laws. Senate Bill 81, which took effect July 1, 2025, reaffirms Georgia’s commitment to dealer sales and gives Georgia dealers more control over the important data on their DMS systems.

Since this bill took effect, GADA has received positive feedback and several requests for more information about it. Specifically, as it relates to data protection, Senate Bill 81:

• Prevents third parties from accessing, sharing or selling a dealership’s data from their DMS without the dealer’s consent;
• Prohibits third parties, including DMS providers, from limiting a dealership’s ability to protect, store or utilize its data;
• Allows data integrators to access data on a dealership’s DMS with the dealer’s consent if the data integrator complies with industry standards for secure data integration;
• Permits dealers to continuously monitor or audit the data accessed from or written to the dealer’s data systems without interference from third parties;
• Permits dealers to terminate DMS contract agreements with 90 days’ notice;
• Requires DMS providers to act reasonably when a dealer transitions away from that DMS provider; and 
• Permits dealers to backup data and/or provide redundant systems to enable them to restore business operations in the event of another security breach that renders a dealer’s data system inoperable.

Takeaway

What is the common thread that links these stories together? The battle to defend and improve the franchise system continues. Make no mistake: There are well-resourced companies trying to destroy franchise law protections that dealers have spent decades fighting for.

Defending and improving the franchise system requires resources and active engagement from dealers. Please consider supporting GADA’s political action committee, CARD and GADA’s Dealer Advocacy Fund. Those dollars go directly to supporting the franchise dealer system in Georgia, and those resources are necessary as the battle continues.