Porsche Sued For $300 Million By High-End Miami Car Dealership

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The Collection in Miami is suing Porsche for contravening Florida's franchise laws.

The Collection is a multi-franchise dealership in Coral Gables, Miami. It specializes in high-end vehicles, including Porsche. The Collection is now suing Porsche Cars North America and Porsche Latin America for $300 million for not supplying pool cars to the dealership. According to the high-end dealership, Porsche violates Florida's dealership laws by restricting vehicle access. Not ideal in a state where a 2022 Porsche 911 Cabriolet sits on the floor for no more than five minutes.

According to Automotive News, Porsche assigns pool cars at the factory's discretion. These vehicles account for no more than 20% of its inventory. To gain access to these cars, a dealership must be exclusively dedicated to Porsche, and it needs to meet the standards set by the German brand.

The Collection

The attorney for The Collection, Sean Burstyn, stated that Florida's franchise laws protect a dealer from being forced to go exclusive. A visit to The Collection's website reveals that it currently holds the rights to sell new models from Audi, Jaguar, Ferrari, Maserati, Aston Martin, McLaren, Alfa Romeo, and Automobili Pininfarina.

"Where exclusivity is a requirement, the manufacturer has run afoul of our state's statute," said Burstyn. According to The Collection, its Porsche franchise would be worthless if the factory continued to deny it access to pool cars. It also claims Porsche's conduct has already cost it millions of dollars, and if the situation does not change, it will cause more than $100 million in damages.

The Collection

As part of the lawsuit, The Collection wants to stop Porsche from opening a new franchise in Florida until the matter is settled. Porsche North America declined to comment.

The lawsuit does mention that Porsche wanted The Collection to establish a dedicated franchise in Kendall or Cutler Bay, but its CEO stated that these areas were too remote or suburban to attract Porsche customers. After The Collection declined, the alleged withholding of pool cars started.

"This is an unfortunate and hopefully short chapter in what has been a nearly 30-year strong relationship between The Collection and Porsche," said Ken Gorin, The Collection's CEO. "We did not make this decision lightly."

The Collection

The lawsuit also contains a letter sent to The Collection by Porsche Cars North America COO Joe Lawrence.

According to Lawrence, Florida franchise law does not forbid it from handing out pool cars at its discretion. Lawrence also reiterated that dealerships need to meet a certain standard to receive an allocation.

The Collection's decision not to build a standalone Porsche store demonstrates its "unwillingness to meaningfully engage in best business practices and promote the Porsche brand," Lawrence said. "As a result, it should come as no surprise that we continue to withhold discretionary assignment of pool cars to The Collection."

The Collection

An unnamed source claims that making an exception for The Collection would be unfair, as other dealers have already willingly accepted Porsche's guidelines.

The Collection states that its business would spiral because of how Porsche's allocation system works. The system is referred to as "turn and earn," and dealerships receive vehicles based on the previous years compared to the total national sales. In other words, the more you sell, the more cars you get the following year.

Since Porsche started withholding cars, The Collection's ranking in national sales has dropped from third place in 2018 to 32nd in 2022. As it continues to fall, the fewer vehicles it will receive.

The lawsuit claims Porsche's actions will put it into "a death spiral - an impossible cycle of increasing demands with fewer resources to meet those demands until the dealer's franchise collapses."

The Collection

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