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California: News and Insight on Business in the Golden
State | THE STATE / AUTOS

Nissan Sues to Block Purchases by Republic

April 10, 1998|John O'Dell

Nissan Motor Corp. USA filed a federal lawsuit in Los Angeles aimed at preventing auto retailing giant Republic Industries Inc. from acquiring Nissan dealerships accounting for more than 5% of the Carson-based auto maker's total retail sales in the United States. The suit claims Republic is disavowing a verbal agreement reached in meetings with Nissan last year. Fort Lauderdale, Fla.-based Republic has not exceeded the limit, but Nissan says it believes the car retailer intends to ignore the policy and acquire more Nissan and Infiniti dealerships than it will allow. American Honda Motor Co., based in Torrance, has filed seven separate federal suits seeking to block further Republic purchases of its dealerships. The car companies are pursuing federal suits because their internal rules have run afoul of state regulations that permit Republic to acquire their dealerships. Republic has signed dealership agreements with Toyota, Ford and General Motors. In its suit, Nissan alleges that Republic officials have said they do not intend to sign any new agreements limiting dealership purchases. The company has acquired or agreed to acquire about 270 new-car dealerships and expects revenue of $13 billion this year from auto sales.

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