STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

AMERICAN SUZUKI MOTOR CORPORATION ) and FUN STREAM RECREATION, INC., )

)

Petitioners, )

)

vs. ) CASE NO. 94-6991

) MECHANICAL SERVICES, INC. OF ) WEST PALM BEACH, )

)

Respondent. )

) AMERICAN SUZUKI MOTOR CORPORATION ) and FUN STREAM RECREATION, INC., )

)

Petitioners, )

)

vs. ) CASE NO. 95-0027

)

DEERFIELD SUZUKI, INC., and ) DEPARTMENT OF HIGHWAY AND MOTOR ) VEHICLES, )

)

Respondents. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Susan B. Kirkland, held a formal hearing in this case on May 18, 1995, in West Palm Beach, Florida.

APPEARANCES

For Petitioner American Dean Bunch, Esquire Suzuki Motor Corp.: Cabaniss & Burke, P.A.

909 East Park Avenue Tallahassee, Florida 32301

For Petitioner Fun

Stream Recreation, Inc.: No appearance.

For Respondent Mechanical Services Inc., of West

Palm Beach: No appearance.

For Respondent Deerfield Peter A. Barskis, President Suzuki, Inc.: Deefield Suzuki, Inc.

4141 North Federal Highway Pompano Beach, Florida 33064

For Respondent Department of Highway Safety and

Motor Vehicles: No appearance. STATEMENT OF THE ISSUES

Whether Petitioners should be permitted to establish a dealership for the sale of Suzuki motorcycles at 505 N.E. 5th Avenue, Delray Beach, Palm Beach County, Florida.

PRELIMINARY STATEMENT

In 1994, American Suzuki Motor Corporation, Motorcycle Division (American Suzuki) notified the Department of Highway Safety and Motor Vehicles (Department) of its intention to establish an additional motorcycle dealership, Fun Stream Recreation, Inc. d/b/a Delray Kawasaki (Delray Kawasaki), for the sale of Suzuki motorcycles at 505 N.E. 5th Avenue, in the Delray Beach area of Palm Beach County, Florida.

Two existing Suzuki motorcycle dealerships filed protests to the proposal, Mechanical Services of West Palm Beach, Inc. (Mechanical Services) and Deerfield Suzuki, Inc. (Deerfield Suzuki).

The cases were forwarded to the Division of Administrative Hearings for assignment to a hearing officer. By order dated January 27, 1995, the two cases were consolidated for final hearing.

At the final hearing Petitioner American Suzuki presented Tom Decker as its witness. American Suzuki's Exhibits 1-19 were admitted in evidence. Peter Barskis testified on behalf of Deerfield Suzuki. Deerfield Suzuki's Exhibits 1- 4, 6A, 6B, 7, and 8 were admitted into evidence.

Petitioner Delray Kawasaki made no appearance; however, counsel for American Suzuki represented that Delray Kawasaki adopted the position of American Suzuki. Respondents, Mechanical Services and the Department, made no appearances.

At the final hearing the parties agreed to submit proposed recommended orders within 14 days of the date that the transcript was filed. The transcript was filed on June 7, 1995. The parties timely filed their proposed recommended orders. The parties' proposed findings of fact are addressed in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. Respondent, Mechanical Services of West Palm Beach, Inc. (Mechanical Services), is an existing Suzuki motorcycle dealership located in Palm Beach County, Florida.

   
   

2. Respondent, Deerfield Suzuki, Inc. (Deerfield Suzuki), is an existing Suzuki motorcycle dealership located at 4141 North Federal Highway, Pompano Beach, Broward County, Florida.

   
   

3. Petitioner, Fun Stream Recreation, Inc. d/b/a Delray Kawasaki (Delray Kawasaki) is an existing dealer for Kawasaki motorcycles and is located at 505

   N.E. 5th Avenue, Delray Beach, Palm Beach County, Florida. Delray Kawasaki is the proposed Suzuki dealership.

4. Petitioner, American Suzuki Motor Corporation (American Suzuki) is the licensee which intends to establish a new Suzuki dealership at Delray Kawasaki.

   
   

5. Deerfield Suzuki and American Suzuki have stipulated that Deerfield Suzuki is located within 12.5 miles of the location of the proposed dealership.

   
   

6. Palm Beach County, Florida, has a population in excess of 300,000. Based on information from the Bureau of Economic and Business Research, University of Florida, Palm Beach County's population was estimated to be 937,190 as of April 1, 1994.

   
   

7. No evidence was presented to establish that Mechanical Services was located within 12.5 miles of the location of the proposed dealership or that during the 36 month period before the filing of the application for the proposed dealership that Mechanical Services made 25 percent of its retail sales of new vehicles to persons whose registered household addresses were located within a radius of 12.5 miles of the location of the proposed dealership.

   
   

   COMMUNITY OR TERRITORY

   
   

8. Neither Deerfield Suzuki nor Mechanical Services has an agreement with American Suzuki which geographically defines the sales territory for the dealerships.

   
   

9. The majority of Suzuki sales by Mechanical Services are in Palm Beach County.

   
   

10. Deerfield Suzuki derives the majority of its Suzuki sales from Broward County residents.

    
    

11. The majority of Kawasaki sales from the proposed Suzuki dealership, Delray Kawasaki, are made to customers in Palm Beach County.

    
    

12. American Suzuki contends that Palm Beach County is the community or territory which should be considered in determining whether there is adequate representation in the community or territory of the proposed dealership. Deerfield Suzuki presented no evidence to indicate that the community or territory should be an area other than Palm Beach County.

    
    

13. Based on the evidence presented, the relevant community or territory is defined as Palm Beach County, Florida.

    
    

    IMPACT OF THE ESTABLISHMENT OF THE PROPOSED DEALERSHIP

    
    

14. During 1992, Deerfield Suzuki made 49 Suzuki sales to customers within a 12.5 mile radius of the proposed dealership. These sales represented 38 percent of Deerfield Suzuki's total retail sales for 1992.

    
    

15. Deerfield Suzuki made 31 Suzuki sales in 1993 to customers within a

    12.5 mile radius of the proposed dealership. These sales accounted for 32 percent of Deerfield Suzuki's total Suzuki retail sales for 1993.

    
    

16. Deerfield Suzuki derived 32 percent of its total Suzuki retail sales in 1994 from customers within a 12.5 mile radius of the proposed dealership, by making 34 sales.

17. Peter A. Barskis, President of Deerfield Suzuki, anticipates that the establishment of the proposed dealership will lessen the number of sales that Deerfield is currently making in the Boca Raton and Delray Beach area. Mr. Barskis did not present any evidence to indicate to what extent Deerfield Suzuki's market share in those areas would be diminished and to what extent it would have a financial impact on Deerfield Suzuki.

    
    

    INVESTMENTS MADE AND OBLIGATIONS INCURRED BY CURRENT DEALERSHIPS

    
    

18. The only evidence presented with regard to the facilities of the exiting dealers pertained to Mechanical Services which sought and received permission from American Suzuki to relocate Suzuki into its existing facility. Mechanical Services represented to American Suzuki that it would construct an additional facility in order to properly represent Suzuki. To date, Mechanical Services has not constructed an additional facility.

    
    

    REASONABLY EXPECTED MARKET PENETRATION

    
    

19. Market penetration is the percentage of Suzuki products sold compared to the total industry, regardless of the dealer which sold the product.

    
    

20. In the motorcycle industry, registration and sales information are compiled by R.L. Polk and Co. (Polk) and since January 1994, by the Motorcycle Industry Council (MIC).

    
    

21. Polk data reflects only motorcycles which are registered with the states for use on the highways. Most all terrain vehicles (ATV's) are not registered with the state of Florida. Polk reports registrations of motor scooters which are registered for street use; however, Suzuki does not compete in the motor scooter market. Thus, data from Polk is only utilized for the "2- wheel motorcycle" or "street-legal" motorcycle category.

    
    

22. MIC data, available only since the beginning of 1994, reports all sales of vehicles from the major motorcycle brands, regardless of whether the vehicles are registered for street use.

    
    

23. Based on the Polk data, Suzuki received the following market share of the motorcycle market for 1990-1994:

    
    

    	1990	1991	1992	1993	1994
    National	15.01	16.34	15.92	14.81	13.37
    Florida	12.78	14.30	14.62	12.59	11.38
    Broward County	10.32	16.08	16.97	13.17	11.48
    Palm Beach County	16.33	15.85	11.52	9.57	8.81

    
    

24. Based on the MIC data, Suzuki received the following market share for 1994:

    National 13.44

    Florida 14.29

    Broward County 15.84

    Palm Beach County 10.98

25. Broward County is adjacent to Palm Beach County. Based on information from the Bureau of Economic and Business Research, University of Florida, Broward County's population was estimated to be 1,340,220 as of April 1, 1994.

26. Suzuki does not have dealers in some areas of Florida where its competitors do. Such areas include St. Augustine, Key West, and Gainesville.

    
    

27. Based on the evidence presented, Broward County is an appropriate standard to use in determining adequacy of representation in Palm Beach County. There is adequate representation of Suzuki in Broward County.

    
    

28. In 1994 there were a total of 1,394 motorcycle type vehicles sold in Palm Beach County. Using Broward County's market penetration of 15.84 percent as a standard, it would be reasonable to have expected 221 Suzuki sales. The actual sales made were 153. Thus, 68 of the expected sales were lost to Suzuki's competitors.

    
    

29. If you look at Broward County as a standard based on population for 1994, there were 41 sales in Palm Beach County that were lost to Suzuki's competitors. There were 278 Suzuki sales in Broward County in 1994. Based on Broward County's population of 1,340,220, the ratio of population to Suzuki sales is 4821/1. Based on Palm Beach County's population of 937,190, it would be reasonable to have expected 194 Suzuki sales in 1994. However, the actual sales were 153.

    
    

    ACTIONS BY LICENSEE RELATING TO OPPORTUNITY FOR GROWTH, EXPANSION AND RELOCATION FOR EXISTING DEALERS

    
    

30. In 1990, Deerfield Suzuki sought and received permission from American Suzuki to relocate from its prior location in Deerfield Beach to its current location in Pompano Beach which is three miles south of its previous location.

    
    

31. In December 1992, Mechanical Services sought and gained approval from American Suzuki to transfer a franchise previously held by another dealership. As a result of this transfer the Suzuki dealership was relocated one mile north or further away from Delray Beach.

    
    

32. Deerfield has requested American Suzuki to supply it with vehicles in excess of its allocation and American Suzuki has done so.

    
    

33. From 1991 to 1995, American Suzuki has discontinued some models, however, the models were discontinued for either product liability reasons or in the normal change of models carried on by all manufacturers on a periodic basis. American Suzuki has also added models during this time period.

    
    

34. In 1990 and 1991, American Suzuki did spring advertising promotions in Palm Beach County. In 1991 and 1992, American Suzuki did spring advertising promotions in Broward County which lasted approximately two months each. In 1992, 1993, 1994, and 1995, American Suzuki did a Miami Grand Prix advertising promotion in Broward County, which lasted one week each year.

    
    

    DISTANCE BETWEEN EXISTING DEALERS AND PROPOSED DEALER

    
    

35. The driving distance between Mechanical Services and Delray Kawasaki, the proposed dealership, is 22.2 miles, and the travel time between the two dealers is 31 minutes.

    
    

36. The driving distance between Deerfield Suzuki and Delray Kawasaki is

    18.1 miles and the travel time is 24 minutes.

    ADEQUACY OF INTERBRAND AND INTRABRAND COMPETITION AND CONVENIENCE OF CONSUMER CARE

    
    

37. In 1994, there were three Suzuki dealers, two Honda dealers, three Yamaha dealers, and two Kawasaki dealers in Broward County.

    
    

38. In 1994, Palm Beach County had one Suzuki dealership, two Honda dealerships, one Yamaha dealership, and two Kawasaki dealerships. One Kawasaki dealership is located in Delray Beach and one Honda dealership is located in the southern portion of Palm Beach County in Boca Raton. The remaining dealerships are located in the northern portion of Palm Beach County.

    
    

39. When the number of Suzuki sales in the Delray Beach area made by Mechanical Services and Deerfield Suzuki are compared to the Kawasaki sales in that area, it is obvious that there is a lack of interbrand competition in that area. See Suzuki Exhibits 2, 3, and 4.

    
    

40. The distance between Mechanical Services and Deerfield Suzuki does not promote intrabrand competition. For example a customer in West Palm Beach could shop for a Suzuki at Mechanical Services , but then would have to travel almost an hour south to Broward County, or a substantial distance north to Martin County, to comparison-shop for a better price, service, and selection.

    
    

    ECONOMIC AND MARKETING CONDITIONS

    
    

41. In terms of future growth, Palm Beach County is projected to continue its substantial growth, in terms of population, through 2020.

    
    

42. The total motorcycle market, as reflected in Polk registrations for Palm Beach County, has increased consistently since 1991. In 1991, the total motorcycle registrations were 568; in 1992, 712; in 1993, 857; and in 1994, 863.

    
    

43. On a national level, although total motorcycle industry registrations reached a low point of 183,679 in 1991, this figure has steadily increased to 187,989 in 1992; 214,618 in 1993; and 234,337 in 1994. In terms of future growth of the motorcycle industry nationwide, this increase is forecasted to continue at least through 1998.

    
    

44. There has been a decline in the national market share for Suzuki from 1992 through 1994. However, there has been a greater decline in the market share in Palm Beach County for the same time period.

    
    

45. The economic growth and marketing data demonstrate that the addition of a Suzuki dealership in Delray Beach is justified by the growth of population and the motorcycle market.

    
    

    PERFORMANCE OF THE DEALER NETWORK

    
    

46. Based on the performance of the existing dealer network for Palm Beach County using Polk data, the efficiency percentage of sales penetration in Palm Beach County for 1990-1994 as compared to the national and state penetration was as follows:

    
    

    	1990	1991	1992	1993	1994
    National	108.8	97.0	72.4	64.6	65.9
    Florida	127.7	110.8	78.8	76.0	77.4

47. Using the MIC data for 1994, the existing dealer network's efficiency as compared to the national market penetration was 81.6 percent and as compared to the Florida market penetration was 76.8 percent.

    
    

48. In comparison, the efficiency percentage of performance of the dealer network in adjacent Broward county for 1990-1994 based on Polk data was as follows:

    
    

    	1990	1991	1992	1993	1994
    National	68.8	98.4	106.6	88.9	85.9
    Florida	80.8	112.4	116.1	104.6	100.9

    
    

    Based on MIC data the efficiency of performance for Broward County for 1994 was

    118 percent as compared to the national market penetration and 111 percent as compared to the Florida market penetration.

    
    

    CONCLUSIONS OF LAW

    
    

49. The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of this proceeding. Section 120.57(1), Florida Statutes.

    
    

50. The conditions for standing to protest an additional motor vehicle dealership are provided in Section 320.642(3)(b), for counties with populations of more than 300,000 such as Palm Beach County. These standing requirements will be enforced according to parameters plainly set forth by the legislature. Braman Cadillac, Inc. v. Department of Highway Safety and Motor Vehicles, 584 So.2d 1047 (Fla. 1st DCA 1991).

    
    

51. Section 320.642(3)(b), Florida Statutes, provides:

    
    

    (3) An existing franchised motor vehicle dealer

    or dealers shall have standing to protest a proposed additional or relocated motor vehicle dealer where the existing motor vehicle dealer or dealers have a franchise agreement for the same line-make vehicle to be sold by the proposed additional or relocated motor vehicle dealer and are physically located so as to meet or satisfy any of the following require- ments or conditions:

    * * *

    1. If the proposed additional or relocated motor vehicle dealer is to be located in a county with a population of more than 300,000 according to the most recent data of the United States Census Bureau or the data of the Bureau of Economic and Business Research of the University of Florida.

       1. Any existing motor vehicle dealer or dealers of the same line-make have a licensed franchise

          location within a radius of 12.5 miles of the location of the proposed additional or relocated motor vehicle dealer; or

       2. Any existing motor vehicle dealer or dealers of the same line-make can establish that during any 12-month period of the 36-month period preceding the

    filing of the licensee's application for the proposed dealership, such dealer or its predecessor made 25

    percent of its retail sales of new motor vehicles to persons whose registered household addresses were located within a radius of 12.5 miles of the location of the proposed additional or relocated motor vehicle dealer; provided such dealer is located in the same county or any county contiguous to the county where the additional or relocated dealer is proposed to be located.

    
    

52. American Suzuki stipulated that Deerfield Suzuki was within 12.5 miles of the proposed dealership and accordingly, had standing to protest. Additionally, Deerfield Suzuki has established that during the 36 months prior to the filing of the application that Deerfield made more than 25 percent of its retail sales to persons whose household addresses were within a radius of 12.5 miles of the proposed additional dealership.

    
    

53. Mechanical Services' standing was based on its allegation that more than 25 percent of its sales were within 12.5 miles of the proposed dealership. Mechanical did not appear at the hearing and no evidence was offered concerning the percentage of its sales within a 12.5 mile radius of the proposed dealership. Accordingly, Mechanical Services did not demonstrate that it has standing to protest the proposed location of the additional dealership.

54. Section 320.642(2)(a)2, Florida Statutes, provides: (2)(a) An application for a motor vehicle

    dealer license in any community or territory shall be denied when:

    * * *

    2. The licensee fails to show that the existing franchised dealer or dealers who register new motor vehicle retail sales or retail leases of the same line-make in the community or territory of the proposed dealership are not providing adequate representation of such line-make motor vehicles in such community or territory. The burden of proof in establishing inadequate representation shall be on the licensee.

    
    

55. Section 320.642 does not define "community or territory." The franchise agreement between the licensee and the existing dealers is a good indicator of what is the appropriate community or territory to be used in determining whether there is adequate representation. However, in the instant case, the agreements between American Suzuki and Deerfield Suzuki and Mechanical Services do not designate a geographic market place. The community or territory must be established by the evidence presented at the hearing. Larry Dimmitt Cadillac v. Seacrest Cadillac, Inc., 558 So.2d 138 (Fla. 1st DCA 1990) and A. Abraham Chevrolet v. Collection Chevrolet, Inc., 533 So.2d 821 (Fla. 1st DCA 1988.

    
    

56. The evidence presented did show that the one Suzuki dealer that was located in Palm Beach County derives the majority of its Suzuki sales from Palm Beach County residents. The proposed dealer is an existing Kawasaki dealer and derives the majority of its Kawasaki sales from Palm Beach County customers. It is logical to conclude that the territory for a proposed Suzuki dealership

    located in Palm Beach County and which already derives the majority of its retail sales for another brand of motorcycles in Palm Beach County would be Palm Beach County.

    
    

57. Section 320.642(2)(b), Florida Statutes, sets forth eleven factors which may be considered in determining whether the existing dealers are providing adequate representation in the community or territory. No evidence was presented by either party concerning the following factors: Factor 5 (coercion by a manufacturer); Factor 7 (deomographic or geographic changes proved by the dealer); and Factor 8 (dealer's breach of dealer agreement).

    
    

    FACTOR ONE

    
    

58. Factor one is contained in Section 320.642(2)(b)1, Florida Statutes, and provides:

    
    

    The impact of the establishment of the proposed or relocated dealer on the consumers, public interest, existing dealers, and the licensee; provided, however that financial impact may only be considered with respect to the protesting dealer or dealers.

    
    

59. Deerfield Suzuki did not present evidence as to the financial impact that the establishment of the proposed dealership would have on its business. There was evidence presented to establish the amount of sales that Deerfield Suzuki had garnered within a 12.5 mile radius of the proposed dealership during 1992-1994; however, there was no evidence of how many sales Deerfield Suzuki would lose or the amount of money that Deerfield would lose as a result of the establishment of the new dealership.

    
    

60. The establishment of the new dealership at the Delray Beach location would make shopping for a Suzuki product more convenient for the customers. For example the customers in the Delray Beach area would not have to travel 31 minutes north or 24 minutes south in order to do business with a Suzuki dealer. Additionally a customer in the northern part of Palm Beach County would not have to travel almost an hour to Deerfield Suzuki to comparison-shop for a better price, service or selection of Suzuki vehicles.

    
    

61. American Suzuki would benefit from the establishment of the new dealership. Using Broward County as a standard for market penetration, Suzuki lost at least 41 sales to its competitors in Palm Beach County in 1994. It is clear that Suzuki is not adequately represented in the Delray Beach area. Thus, the new dealership would provide for additional sales of Suzuki products and provide for competition with the other brand dealers located in that area.

    
    

    FACTOR TWO

    
    

62. Factor two is contained in Section 320.642(2)(b)2, Florida Statutes, and provides:

    
    

    The size and permanency of investment reasonably made and reasonable obligations incurred by the existing dealer or dealers to perform their obligations under the existing dealer agreement.

63. The evidence presented established that Deerfield Suzuki has been a Suzuki dealership since at least 1992. No other evidence was presented to show the investments made and obligations incurred by Deerfield Suzuki to perform its obligations under its existing dealer agreement with American Suzuki. The evidence did demonstrate that Mechanical Services had agreed to build a separate facility for its Suzuki sales but had not done so as of the date of the final hearing.

    
    

    FACTOR THREE

    
    

64. Factor three is contained in Section 320.642(2)(b)3, Florida Statutes, and provides:

    
    

    The reasonably expected market penetration of the line-make motor vehicle for the community or territory involved, after consideration of all factors which may affect said penetration, including, but not limited to, demographic factors such as

    age, income, education, size class preference, product popularity, retail lease transactions, or other factors affecting sales to consumers of the community or territory.

    
    

65. American Suzuki submits that the appropriate standard to use in determining whether there is reasonably expected market penetration in the territory is the market penetration of Dade and Broward counties combined. Deerfield Suzuki contends that the appropriate standard is the national market penetration.

    
    

66. Based on the evidence presented, the appropriate standard to use is the market penetration in Broward County which is an area adjacent to Palm Beach County. The population of Broward County is more comparable to Palm Beach County than the populations of Dade County or the Dade/Broward County area. The market penetration of Florida may be misleading because it includes Suzuki's performance in areas where Suzuki does not have dealers. The national average is also not helpful since the Florida average has been lower than the national average from 1990-1994 based on the Polk data, and the national average would also include areas where Suzuki is not represented.

    
    

    FACTOR FOUR

    
    

67. Factor four is found in Section 320.642(2)(b)4, Florida Statutes, and provides:

    
    

    Any actions by the licensees in denying its existing dealer or dealers of the same line- make the opportunity for reasonable growth, market expansion, or relocation, including the availability of line-make vehicles in keeping with the reasonable expectations of the licensee in providing an adequate number of dealers in the community or territory.

    
    

68. Based on the evidence presented, there have been no actions by American Suzuki in denying either Mechanical Services or Deerfield Suzuki the opportunity for reasonable growth, market expansion, or relocation. American Suzuki has granted both dealers' requests to relocate and has provided Deerfield

    Suzuki with vehicles above the allocated amount. The discontinuance of models would affect all dealers not just Deerfield Suzuki. The advertising promotions would have benefited Deerfield Suzuki since it is a Broward County dealer and Broward County has been included in the advertising promotions.

    
    

    FACTOR SIX

    
    

69. Factor six is found in Section 320.642(2)(b)6, Florida Statutes, and provides:

    
    

    Distance, travel time, traffic patterns,

    and accessibility between the existing dealer or dealers of the same line-make and the location of the proposed additional or relocated dealer.

    
    

70. The evidence established that the travel time between Deerfield Suzuki and the proposed dealership is 24 minutes and the actual driving distance is

    18.1 miles. Motorcycle buyers tend to purchase from the nearest dealer; thus, the dealer's ability to penetrate the market declines with distance. Based on the evidence presented by Deerfield Suzuki, it appears that the number of its sales in South Palm Beach County diminished as the distance from its dealership increased.

    
    

71. The establishment of a dealership in the Delray Beach area would make it more convenient for the customers in the Delray Beach area to shop for Suzuki products and would also allow for comparison-shopping between the proposed dealership and either Mechanical Services or Deerfield Suzuki.

    
    

    FACTOR NINE

    
    

72. Factor nine is found in Section 320.642(2)(b)9, Florida Statutes, and provides:

    
    

    Whether there is adequate interbrand and intraband competition with respect to said line-make in the community or territory and adequately convenient consumer care for the motor vehicles of the line-make, including the adequacy of sales and service facilities.

    
    

73. Based on the evidence presented it is clear that there is a lack of interbrand competition in the Delray Beach area. The Kawasaki dealer is making more sales in the area than either Mechanical Services or Deerfield Suzuki. The establishment of a new dealer should promote interbrand competition.

    
    

74. Because of the distance between Mechanical Services and Deerfield Suzuki, it is not convenient for customers to comparison shop among the Suzuki dealers. The establishment of the proposed dealership should promote intrabrand competition.

    
    

    FACTOR TEN

    
    

75. Factor ten is contained in Section 320.642(2)(b)10, Florida Statutes, and provides:

    Whether the establishment or relocation of

    the proposed dealership appears to be warranted and justified based on the economic and marketing conditions pertinent to the dealers competing in the community or territory, including anticipated future changes.

    
    

76. The population in Palm Beach County is expected to continue to grow. The number of motorcycle purchases is in an upward trend. Although Suzuki's national market share has been declining, the growth in population and the upward trend for motorcycles provides for ample opportunity for additional sales in Palm Beach County. This is evident when you look at the market share that Broward County, which has adequate Suzuki representation, enjoys as compared to the Florida market share. Broward County has consistently been higher than the Florida average since 1991.

    
    

    FACTOR ELEVEN

    
    

77. Factor eleven is contained in Section 320.642(2)(b)11, Florida Statutes, and provides:

    
    

    The volume of registrations and service business transacted by the existing dealer or dealers of the same line-make in the relevant community or territory of the proposed dealership.

    
    

78. Suzuki's market penetration in Palm Beach County has been consistently lower than the national average, the Florida average, and the Broward County average since 1991. Palm Beach County market penetration has dropped from 15.85 percent in 1991 to 8.81 percent in 1994 based on data from Polk. Based on MIC data, Palm Beach County's market penetration for 1994 was 10.98, still below the national, Florida, and Broward County averages.

    
    

79. Taking each of the applicable factors listed in Section 320.642, Florida Statutes, the existing Suzuki dealers are not adequately representing Suzuki in Palm Beach County. American Suzuki has demonstrated that there is a need for an additional dealership at the location proposed by Delray Kawasaki.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered dismissing the protest of

Mechanical Services for lack of standing and granting the application to

establish a Suzuki motorcycle dealership at Delray Kawasaki, 505 N.E. 5th Avenue, Delray Beach, Florida.

DONE AND ENTERED this 10th day of August, 1995, in Tallahassee, Leon County, Florida.

SUSAN B. KIRKLAND

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings 10th day of August, 1995.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 94-6991

To comply with the requirements of Section 120.59(2), Florida Statutes (1993), the following rulings are made on the parties' proposed findings of fact:

Petitioner's Proposed Findings of Fact.

1. Paragraphs 1-3: Accepted in substance.

2. Paragraph 4: Rejected as constituting a conclusion of law.

3. Paragraph 5: The first sentence is rejected as constituting a conclusion of law. The second sentence is accepted.

4. Paragraphs 6-17 : Accepted in substance.

5. Paragraphs 18-19: Rejected as constituting argument.

6. Paragraph 20: Accepted in substance as it relates to Broward County but rejected as to Dade County as irrelevant.

7. Paragraphs 21-23: Rejected as subordinate to the facts found.

8. Paragraph 24: Rejected to the extent that Deerfield Suzuki argues that the appropriate standard is the national average.

9. Paragraph 25: Rejected as constituting argument.

10. Paragraph 26: The first sentence is accepted in substance except as to the two weeks. The evidence established the duration was one week. The last sentence is rejected as constituting argument.

11. Paragraph 27: The first sentence is accepted in substance. The first half of the second sentence is accepted in substance and the remainder is rejected as irrelevant.

12. Paragraphs 28-33: Accepted in substance.

13. Paragraph 34: Rejected as unnecessary.

14. Paragraphs 35-39: Accepted in substance.

15. Paragraph 40: The first sentence is rejected as unnecessary. The second sentence is accepted in substance.

16. Paragraphs 41-42: Rejected as constituting argument.

17. Paragraph 43: Accepted in substance.

18. Paragraph 44: Rejected as constituting argument.

19. Paragraphs 45-51: Accepted in substance.

20. Paragraph 52: Rejected as constituting argument.

21. Paragraphs 53-54: Accepted in substance.

22. Paragraph 55: Rejected as constituting argument.

23. Paragraphs 56-60: Accepted in substance.

24. Paragraph 61: Accepted.

Respondent Deerfield Suzuki's Proposed Findings of Fact. (Deerfield Suzuki did not delineate findings of fact and conclusions of law.)

1. Paragraph 1: The first, second and third sentences are rejected as constituting argument. The last sentence is rejected as not based on the greater weight of the evidence and as irrelevant because the Palm Beach County averages also fell below the national averages from

   1991-1994.

2. Paragraph 2: The first sentence is accepted in substance. The second and third sentences are rejected as not supported by the greater weight of the evidence. The fourth sentence is rejected as subordinate to the facts found because since 1991 Palm Beach County's average has been lower than the national, Florida, and Broward County averages. The fifth and sixth sentences are accepted in substance. The seventh sentence is rejected as constituting argument. The eighth sentence is rejected as subordinate to the facts found. The ninth sentence is rejected as constituting argument. The tenth sentence is accepted in substance.

3. Paragraph 3: The last sentence is rejected as constituting argument. The remainder is accepted in substance.

4. Paragraph 4: Rejected as not supported by the greater weight of the evidence.

COPIES FURNISHED:

John Logsdon

Cycles of Palm Beach

2353 North Military Trail

West Palm Beach, Florida 33409

Dean Bunch, Esquire Cabaniss, Burke & Wagner 909 East Park Avenue Tallahassee, Florida 32301

Mr. Peter A. Barskis, President Deerfield Suzuki, Inc.

4141 North Federal Highway Pompano Beach, Florida 33064

Mike Alderman, Esquire Assistant General Counsel Department of Highway Safety

and Motor Vehicles

Neil Kirkman Building, Room A432 Tallahassee, Florida 32399-0504

Charles J. Brantley, Director Division of Motor Vehicles

Room B439, Neil Kirkman Building Tallahassee, Florida 32399-0500

Enoch Jon Whitney General Counsel

Department of Highway Safety and Motor Vehicles

Neil Kirkman Building Tallahassee, Florida 32399-0500

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to this recommended order. All agencies allow each party at least ten days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the final order in this case concerning agency rules on the deadline for filing exceptions to this recommended order. Any exceptions to this recommended order should be filed with the agency that will issue the final order in this case.

Docket for Case No: 94-006991

Orders for Case No: 94-006991