Members of a special committee introduced legislation Wednesday that would protect Idaho auto dealers from upstart competitors who want to sell cars directly to consumers.
The bill, approved for further hearing by the House Ways and Means Committee, is the brainchild of the Idaho Automobile Dealers Association. It has the support of Rep. Kathy Sims, R-Coeur d’Alene, the Legislature’s only auto dealer.
It also comes as Elio, a direct-seller and maker of a three-wheeled car, vies for legalization in the Idaho Capitol.
The bill would do a little housekeeping, including altering how dealers hand off their business operations to successors. The bill’s second part would affirm that Idaho code allows consumers to buy cars only through franchises.
“This legislation is important to dealers,” Kevin Hannigan, speaking for the Idaho Auto Dealers Association, told the panel.
In an interview after the hearing, Hannigan denied the measure had anything to do with Elio.
“The word Elio has not come into play into this bill at all,” Hannigan said. “That is completely separate.”
Yet, Hannigan hinted dealers are not comfortable with sellers of a “special class of vehicle” ignoring Idaho franchise law.
“We don’t want them to have the ability to spin it off and do whatever they want,” Hannigan explained.
Tesla has ignited battles across the country as it has tried to sell directly to customers, cutting out middlemen. Hannigan said that’s what the bill would stop.
“We think it’s imperative in the state of Idaho that a manufacturer isn't selling directly to a consumer,” he said.
Hannigan also said the bill would promote competition by forcing manufacturers to spread distribution among many franchises, which he believes would give customers more options.
“So, it’s actually better for competition,” he said.
For her part, Sims, a forty-year veteran of the auto sales game, said the measure is on behalf of the National Auto Dealers Association.
“This is on their advice,” she said.
Sims will sponsor the measure in committee, but told IdahoReporter.com she isn’t sure if she’ll carry it on the floor.
Additionally, she promised to declare a conflict of interest if the bill comes up for a full House vote.
Rep. Brent Crane, R-Nampa, offered the motion to introduce the bill, but expressed reservations about the measure. “There’s concerns with the legislation,” he said. “It appears this could potentially have a negative impact on some folks wanting to be in the marketplace.”
The bill now heads to Speaker of the House Scott Bedke, R-Oakley, for committee assignment.
