The United States Supreme Court ruled in favor of Volvo Trucks North America on a complaint from a Fort Smith, AR Volvo dealer that the manufacturer violated competitive pricing practices when the OEM offered other dealers better pricing on several occasions.
The plaintiff, Reeder-Simco GMC, Inc., said it lost sales and profits as a result of Volvo’s pricing practices. Reeder added that it believed Volvo sought to eliminate the dealer through anti-competitive pricing.
“In the case before us, there is no evidence that any favored purchaser possesses market power,” according to the Court decision. “The allegedly favored purchasers are dealers with little resemblance to large independent department stores or chains operations, and the supplier’s selective discounting fosters competition among suppliers of different brands.”
“It essentially maintains the status quo,” Jack Nerad, editorial director and executive market analyst for Kelley Blue Book told FleetOwner “What the Supreme Court said is that it’s allowable for a manufacturer to cut prices to specific dealers in a competitive situation to win that business. Had [the Court] gone the other way it would’ve essentially changed the game.”
“It confirms that the manufacturer has the right, working with the dealer, to determine what the competitive price is needed to be to win the business,” Terry Young, owner of Charlotte-based Volvo and GMC Truck Center and Charlotte-based Advantage Truck Leasing told FleetOwner. “I think Volvo has a good process to achieve that. It’s good that this issue had been resolved and the path that we’ve traveled together that we continue to work on that basis.”