Toyota Challenges Republic in California
31 July 1997
Toyota Challenges Republic in CaliforniaTORRANCE, Calif., July 31 -- Toyota Motor Sales (TMS), U.S.A., Inc. today announced that it is taking action in California to block Republic Industries, Inc. from acquiring Anderson Lexus, located in Fremont, Calif. In a petition filed with the California New Motor Vehicle Board, TMS states that it is withholding consent for the transfer of Anderson Lexus, because of Republic's continuing refusal to accept or abide by TMS' multiple- dealer ownership policies. Developed well before Republic became involved in the auto retail business, these policies are designed to protect the public, other dealers and Toyota against the dangers that could flow from a rapid concentration of auto dealerships under the control of a single owner. With the sole exception of Republic, every other publicly-owned dealer group that has acquired Toyota or Lexus dealerships has agreed to Toyota's multiple- dealer policies. "Republic's appetite for dealerships appears insatiable, regardless of the potential dangers to the public interest," said Yale Gieszl, TMS executive vice president. "We now plan to bring the matter to a head through an expedited hearing before the California New Motor Vehicle Board. We're looking forward to the day we can fully air our concerns and get Republic to publicly respond to many unanswered questions." Among those questions is why Republic insists on pursuing a rapid acquisition strategy that reportedly includes paying premium prices to acquire auto dealerships. "We see a company intent on acquiring one dealership after another to quickly add those profits to their bottomline," said Gieszl. "On the other hand, Toyota has invested 40 years of hard work and billions of dollars to build its U.S. operations. Because we're in this business for the long term, we have the responsibility to do what's right for our customers and dealers, including the obligation to see that those who represent us in the market are not just the highest bidders on an acquisition binge." SOURCE Toyota Motor Sales, U.S.A., Inc.