STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
P & M TRANSIT COMPANY, INC. )
d/b/a JIM WALKER'S YAMAHA ) and YAMAHA MOTOR CORPORATION ) U.S.A., )
)
Petitioners, )
)
vs. ) CASE NO. 88-3519
)
SUZUKI OF HAMILTON, INC. ) d/b/a DAYTONA YAMAHA, U.S.A., ) and DEPARTMENT OF HIGHWAY )
SAFETY AND MOTOR VEHICLES, )
)
Respondents. )
)
RECOMMENDED ORDER
Pursuant to notice, a formal hearing was conducted in this case on December 20, 1988, at Tallahassee, Florida, before Michael M. Parrish, a duly designated Hearing Officer of the Division of Administrative Hearings. Appearances for the parties at the hearing were as follows:
APPEARANCES
For Petitioners: Dean Bunch, Esquire
Rumberger, Kirk, Caldwell, Cabaniss, Burke & Wechsler
101 North Monroe Street Suite 900
Tallahassee, Florida 32301
For Respondent: Linda McMullen, Esquire
McFarlain, Sternstein, Wiley & Cassedy
600 First Florida Bank Bldg. Tallahassee, Florida 32301
ISSUES AND INTRODUCTION
The Petitioner, P & M Transit Company, Inc., d/b/a Jim Walker's Yamaha (hereinafter "Walker") filed an application to relocate its Yamaha dealership. A protest to the application was filed by the Respondent, Suzuki of Hamilton, Inc., d/b/a Daytona Yamaha, U.S.A. (hereinafter "Hamilton"). The basic issue in this case is whether the Walker application should be denied. Underlying issues are (a) whether Section 320.642, Florida Statutes (1987), applies to relocations of existing dealerships and, if so, (b) whether the existing dealers ". . . are providing adequate representation in the community or territory. . . ." (The parties stipulated that there is no issue in this case regarding breach of the dealer agreement by a dealer.)
At the hearing, Yamaha Motor Corporation, U.S.A. (hereinafter "Yamaha"), presented the testimony of John Donaldson, an expert in the area of motorcycle dealer network analysis, and offered exhibits 1 through 21, all of which were received into evidence. Hamilton presented the testimony of Alec Mobbs and offered into evidence exhibits A through G.
The transcript of the hearing was filed on January 4, 1989, and thereafter Yamaha and Hamilton filed timely proposed recommended orders containing proposed findings of fact and conclusions of law. The parties' proposals have been carefully considered during the formulation of this recommended order. All findings of fact proposed by the parties are specifically addressed in the attached appendix.
FINDINGS OF FACT
Based on the evidence received at the hearing, I make the following findings of fact:
Petitioner Walker filed an application seeking to relocate its Yamaha motorcycle dealership from 1147 "B" North Dixie Freeway, New Smyrna Beach, Florida 32069, to the location of its Honda-Suzuki Store at 2385 South Ridgewood Avenue, South Daytona, Florida 32019. The new Yamaha location would be approximately nine miles north of the original location and within six miles of Respondent Hamilton's existing dealership. The traffic in the six miles between the proposed new Walker location and the existing Hamilton location is much more dense than the traffic in the nine miles south of the proposed location.
The population of Volusia County is separated from the surrounding counties on the north and south, such as to constitute it as a separate community or territory. For purposes of the applicable statutory provisions, the geographic boundaries of the subject "territory or community" are the same as the geographic boundaries of Volusia County. The proposed relocation of Walker is from one point in a territory or community in which he is presently located to another point in that same territory or community.
The motorcycle industry is in a decline. Florida currently ranks eighth in the nation in motorcycle sales, which is down from its previous ranking of sixth.
Hamilton, the protesting dealer, has owned and operated a successful Yamaha dealership at 324 Eleventh Street, Holly Hill, Florida 32017, since 1983. The dealership is well marked and easily accessible.
Although the majority of Hamilton's sales are made to customers who live within five miles of the dealership location, Hamilton considers its market area to be Volusia County. Eleven motorcycle dealerships are currently located in the county.
Volusia County's population in 1982-83 was 281,512. In 1987-88 the total was 337,909, for a growth rate of 20 percent. This growth rate is significantly less than Florida as a whole. The typical motorcycle purchaser is aged eighteen to thirty-four. The population of eighteen to thirty-four year olds in Volusia County grew only 16 percent between 1982 and 1988, and, as a percentage of the total population, that age group declined from 25 percent to
24 percent.
Hamilton has actively cultivated all of Volusia County as a sales market area since 1983. It spends an average of $17,500 a year advertising on the radio, in newspapers, yellow pages, and participating in various exhibits and mall shows.
Hamilton's efforts have been successful. The dealership was a financial disaster when purchased by Hamilton in 1983. But after its first year of operation the dealership showed a profit. The dealership continues to show a profit in the face of a declining industry and a declining market population. Hamilton has over $100,000 invested in his business.
Hamilton's store consists of 10,000 square feet in which only Yamaha products are marketed. This is approximately 4,000 square feet larger than the average store. The dealer employs two sales people and three mechanics. Walker has 10,000 square feet for two brands, Honda and Suzuki. If the relocation is permitted, three brands would be housed in the same amount of space Hamilton has for Yamaha alone.
Since 1983, Hamilton has probably accounted for the majority of Yamaha sales in Volusia County. In 1983 it sold 163. In 1984 it sold 207. In 1985 it sold 186. In 1986 it sold 139 and in 1987 it sold 122. By the beginning of December 1988, with ten more selling days remaining it had already sold the same as last year's total. Eighty-four percent of all of Hamilton's sales during the last five years were made to customers who lived within a five mile radius of the dealership. In the last two years, 86 percent of total sales were made in the same area. If another dealer were permitted to locate within that radius, the number of sales that Hamilton could reasonably expect to make would probably significantly decrease. Walker's proposed relocation is in the center of the southern half of the majority of Hamilton's sales.
Hamilton is an award winning dealer. Yamaha introduced its pacesetter awards program in 1985. There are separate awards for service, parts and accessories, and sales. A dealer receiving all three awards in the same year is named a pacesetter. In 1985, Hamilton won the pacesetter award. In 1986, 1987, and 1988 it won the parts and accessories, and service awards. Hamilton won the service award in spite of intense competition from 20 motorcycle businesses in the Volusia County area. Yamaha has requested Hamilton to perform service warranty work on machines sold by Walker.
Hamilton is 17 points above national average in customer service, and at 155 percent of the target sales figures for parts and accessories. Hamilton was chosen by Yamaha as one of only ten dealers in the United States to test market a line of Yamaha clothing.
Yamaha attempts to measure the adequacy of sales performance by determining market penetration. Market penetration is determined by adding the total number of motorcycle registrations to the total number of scooter registrations and dividing that total into the total number of Yamaha motorcycle registrations plus the total registrations of Yamaha scooters. All terrain vehicles, ATVs, and motorcross (off road competition dirt) bikes are not included in Yamaha's computation because they are not registered with Florida's Department of Highway Safety and Motor Vehicles.
The registration data that Yamaha relies on is compiled by the R.L. Polk Company. Polk purchases the data with which to compile the reports from various state motor vehicle agencies. Polk's reports are based only on vehicle registrations. Therefore the data is not an accurate reflection of sales
performance in Florida because ATVs and motorcross bikes are not registered with the State. In addition, registrations reflect only where the motorcycle purchaser lives, not where the unit was purchased. In other words, if a person who lives in Orlando bought a Yamaha in Daytona, that motorcycle registration would show up in a Polk report as an Orlando registration. It is difficult, if not impossible, to accurately evaluate a dealer's sales performance, or representation of its manufacturer, using the Polk data.
It is unreasonable to judge Hamilton's representation of Yamaha on a formula based solely on motorcycles and scooters because unregistered vehicles are a large part of Hamilton's sales. Use of registration data also sometimes yields absurd results. For example, Yamaha based their market share of Volusia County for 1985 on 181 vehicles. Hamilton alone sole 186 units that year.
Yamaha dealers have had difficulty ordering and maintaining a sufficient supply of machines to sell. Yamaha allocates a certain number of units to each dealer. The allocations are small and made up of mixtures of units that are difficult to sell. On occasion Yamaha has not been able to fill even an allocated order. The manufacturer has also instituted package sales which place small single line dealers such as Hamilton at a distinct disadvantage in the market area. Because of this packaging system, Hamilton was unable to sell any competition machines, a segment of its beach market, in 1988. Overall, there are fewer Yamaha machines available for dealers to buy and retail.
The evidence suggests that Florida's "Space Coast" does not purchase motorcycles at a rate commensurate with the rest of the state. In 1985, 1986, and 1987, the only years for which comparable data was introduced, the counties surrounding Volusia (Flagler, Seminole, St. Johns, Orange, Lake, and Putnam) had market percentages below the Florida and national average. Nevertheless, the Florida Yamaha average for 1987 (21.11 percent) was almost achieved in the zip code area in which Hamilton is located. In that area, Yamaha achieved 20.58 percent by registering 14 scooters and motorcycles out of 68 total.
Yamaha has never expressed any dissatisfaction with Hamilton's sales performance or representation of the manufacturer. Hamilton was never told to make any changes in its business and never had any indication that it was providing less than adequate sales representation.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter of and the parties to this proceeding. Sec. 120.57(1), Fla. Stat.
Section 320.642, Florida Statutes (1987), the version of the statutes applicable to this proceeding, reads as follows:
The department shall deny an application for a motor vehicle dealer license in any community or territory where the licensee's presently licensed franchised motor vehicle dealer or dealers have complied with licensee's agreements and are providing adequate representation in the community or territory for such licensee. The burden of
proof in showing inadequate representation shall be on the licensee.
The question of whether the foregoing statutory provision applies to relocations of dealerships has been recently answered in Anthony Abraham Chevrolet Company, Inc. v. Collection Chevrolet, Inc., 533 So.2d 821 (Fla. 1st DCA 1988). There the court said:
The first issue is whether Sec. 320.642, Fla. Stat. (1985), applies to dealer relocations within the same territory or community.
Nothing in the language of the statute precludes application of section 320.642 to dealer relocations in situations such as the one before us. * * * We hold, therefore, that Sec. 320.642, Fla. Stat. (1985), does apply to dealer relocations within the same statutorily defined territory or community. In making this determination, we note that the legislature recently amended this section to include dealer relocations. See Ch. 88- 395, Sec. 12, Laws of Florida. Although that section cannot be retroactively applied to the case before us, it is indicative of legislative intent.
Inasmuch as the proposed dealer relocation in this case is within the same community or territory, Section 320.642, Florida Statutes (1987), applies to this proceeding. Such being the case, the Respondent Hamilton has the same standing to protest the proposed relocation of a dealer as it would have to protest the establishment of a new dealership.
The purpose of Section 320.642, Florida Statutes, is to prevent a manufacturer from taking unfair advantage of a dealer by overloading a market area with more dealers than can be justified by the legitimate interests of the manufacturer and its dealers. Plantation Datsun, Inc. v. Calvin,, 275 So.2d 26 (Fla. 1st DCA 1973); Bill Kelly Chevrolet, Inc. v. Calvin, 322 So.2d 50 (Fla. 1st DCA 1975). In Plantation Datsun, the court cited, with approval, the following language from a Wisconsin Supreme Court Opinion construing a similar statute:
Implicit in this law is the recognition of the gross disparity of bargaining power between the manufacturer of automobiles and the local retailer. It was enacted in recognition of the long history of the abuse
of dealers by manufacturers. . . the purpose of the law is to furnish the dealer with some protection against unfair treatment by the manufacturer.
It was stipulated early in this proceeding that there is no dispute in this proceeding regarding compliance with dealer agreements. Therefore, the only remaining issue in dispute is whether Yamaha is receiving "adequate representation in the community or territory. . . ." As made clear by the statute, "[the] burden of proof in showing inadequate representation shall be on
the licensee," in this case, Yamaha. The totality of the evidence in this case fails to persuasively demonstrate inadequate representation.
Yamaha's entire case on the issue of adequacy of representation is based on a presentation of, and explanation of, and inferences drawn from, a collection of Polk's data regarding registrations. As noted both in the findings of fact and in the appendix to this recommended order, the Polk registration data, standing alone, is not a persuasive measure of the adequacy of dealer representation. Further, evidence offered by Hamilton suggests that any inadequacies of Yamaha market share of the subject area are due to factors other than dealer performance.
Relying on Bill Kelly Chevrolet v. Calvin, 322 So.2d 50 (Fla. 1st DCA 1975), and Dave Zinn Toyota, Inc. v Department of Highway Safety and Motor Vehicles, 342 So.2d 1320 (Fla. 3d DCA 1983), Yamaha argues, in the words of the Bill Kelly case, that "there remains an identifiable plot not yet cultivated, which could be expected to flourish if given . . . attention." Again, the primary evidence regarding such a plot is derived from the Polk registration data which, as previously noted, is not persuasive. And even if the evidence were sufficient to establish the existence of such a plot, the rationale of the Bill Kelly case would not apply, because the primary effect of the relocation proposed in this case would be to invade the area within which Hamilton enjoys a "geographic sales and service advantage," rather than service a presently unexploited indefinable area.
For all of the foregoing reasons, it is recommended that the Department of Highway Safety and Motor Vehicles enter a final order in this case denying the application of P & M Transit Company, Inc. d/b/a Jim Walker's Yamaha, to relocate its dealership premises.
DONE and ENTERED this 6th day of April 1989, in Tallahassee, Leon County, Florida.
MICHAEL M. PARRISH
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 this 6th day of April 1989.
APPENDIX TO RECOMMENDED ORDER IN CASE NO. 88-3519
The following are my specific rulings on all proposed findings of fact submitted by the parties.
Findings proposed by Petitioner, Hamilton:
Paragraphs 1 through 10: Accepted. Paragraph 11: Accepted in substance. Paragraphs 12 through 16: Accepted.
Paragraph 17: Rejected as constituting primarily argument rather than proposed findings of fact.
Paragraphs 18 and 19: Rejected as admittedly inaccurate.
Paragraph 20: Rejected as constituting inferences which are not warranted by the evidence; there is insufficient evidence in the record upon which to base the proposed opinion.
Paragraphs 22 through 24: Accepted. Findings proposed by Respondent, Yamaha:
Paragraphs 1 through 4: Accepted.
Paragraphs 5 and 6: Rejected as constituting a discussion of statutory interpretation rather than proposed findings of fact.
Paragraph 7: Accepted in substance.
Paragraph 8: First sentence accepted. The remainder is rejected as subordinate and unnecessary details.
Paragraph 9: Rejected as subordinate and unnecessary details.
Paragraphs 10 and 11: Rejected in part as subordinate and unnecessary details and in part as constituting inferences not warranted by the evidence.
Paragraphs 12 and 13: Rejected as subordinate and unnecessary details. Paragraph 14: Accepted in substance.
Paragraphs 15 and 16: Accepted in substance.
Paragraph 17 and 18: Rejected as subordinate and unnecessary details. Paragraphs 19 through 23. Rejected as based on inferences not warranted by the evidence; the Polk data standing alone is simply not a persuasive basis upon which to reach conclusions regarding the scope of the area within which the existing dealers enjoy a "geographic advantage."
Paragraph 24: First four lines rejected as based on inferences not warranted by the evidence. Last three lines accepted in substance.
Paragraphs 25 and 26: Rejected as contrary to the greater weight of the evidence and as not supported by persuasive competent substantial evidence. Paragraph 27: Rejected as constituting a statement of legal principles rather than proposed findings of fact.
Paragraph 28: Rejected as constituting inferences not warranted by the evidence and not supported by competent substantial evidence.
Paragraph 29: Rejected as subordinate and unnecessary details; also irrelevant. Paragraph 30: Rejected as constituting inferences not warranted by the evidence. Further, the reasonableness of the proposed standard, without more, is questionable in view of the fact that by simple logic half of the dealers nationwide are performing below the national average.
Paragraph 31: Accepted in substance.
Paragraph 32: First sentence rejected for same reason as rejection of Paragraph
30. Remainder rejected because the Polk data is not a persuasive basis upon which to draw conclusions regarding market penetration.
Paragraphs 33 through 38: Rejected because the Polk data is not a persuasive basis upon which to draw conclusions regarding market penetration.
Paragraph 39: First sentence is rejected as irrelevant. Last sentence is rejected as constituting an inference not warranted by the evidence and not supported by competent substantial evidence.
Paragraph 40: First sentence is rejected as constituting a legal conclusion not warranted by the evidence. Last sentence rejected as redundant.
Paragraph 41: Rejected as constituting argument rather than findings of fact. Paragraphs 42 through 48: Rejected as irrelevant.
Paragraphs 49 and 50: Rejected as subordinate and unnecessary details. Paragraph 51: Rejected as constituting subordinate, unnecessary, and irrelevant details.
Paragraph 52: Rejected as subordinate, unnecessary, and irrelevant details that are closer to argument than to proposed findings of fact.
Paragraphs 53 through 56: Rejected as constituting argument about the evidence rather than proposed findings of fact.
COPIES FURNISHED:
Dean Bunch, Esquire Rumberger, Kirk, Caldwell,
Cabaniss, Burke & Wechsler
101 North Monroe Street Suite 900
Tallahassee, Florida 32301
Linda McMullen, Esquire McFarlain, Sternstein, Wiley
& Cassedy
600 First Florida Bank Bldg. Tallahassee, Florida 32301
Michael J. Alderman, Esquire Office of General Counsel Department of Highway Safety
and Motor Vehicles Neil Kirkman Bldg.
Tallahassee, Florida 32399-0500
Enoch J. Whitney, Esquire General Counsel
Department of Highway Safety and Motor Vehicles
Neil Kirkman Bldg.
Tallahassee, Florida 32399-0500
Charles J. Brantley, Director Division of Motor Vehicles Room B-439, Neil Kirkman Bldg.
Tallahassee, Florida 32399-0500
=================================================================
AGENCY FINAL ORDER
=================================================================
STATE OF FLORIDA
DEPARTMENT OF HIGHWAY SAFETY AND MOTOR VEHICLES DIVISION OF MOTOR VEHICLES
P & M TRANSIT COMPANY, INC., d/b/a JIM WALKER'S YAMAHA and YAMAHA CORPORATION, U.S.A.,
Petitioner,
vs. DOAH CASE NO. 88-3519
SUZUKI OF HAMILTON, INC., d/b/a DAYTONA YAMAHA, U.S.A., and
THE DEPARTMENT OF HIGHWAY SAFETY AND MOTOR VEHICLES,
Respondents.
/
FINAL ORDER
This matter came before the Department for entry of a Final Order upon submission of the Recommended Order by Hearing Officer Michael M. Parrish. Upon a review of the complete record, the Department rejects certain Findings of Fact and portions of Findings of Fact in that they are not based upon competent and substantial evidence, and amends the Findings of Fact or enters substitute Findings of Fact, as set forth herein. Those Findings of Fact not rejected or amended are adopted as a part of this Final Order. Further, the Department rejects the Conclusions of Law of the Recommended Order, and substitutes the Conclusions of law set forth herein.
Rejected and Amended Findings of Fact
Finding of Fact 1 is amended to strike the word "within" as it refers to the distance between the proposed Walker's dealership and the existing Hamilton dealership.
Finding of Fact 5 is amended by striking the first phrase of the first sentence: "Although the majority of Hamilton's sales are made to customers who live within five miles of the dealership location,".
Finding of Fact 6 is amended to strike the sentence which finds that Volusia County's growth rate of 20 percent between 1982-83 and 1987-88 is "significantly less than Florida as a whole." Further, strike the sentence which finds: "The typical motorcycle purchaser is aged eighteen to thirty-four."
Finding of Fact 8 is amended to strike the sentence "But after its first year of operation the dealership showed a profit." Further strike from the third sentence the phrase: "and a declining market population."
The last two sentences of Finding of Fact 9 are deleted as being legally irrelevant. Section 320.642 permits inquiry only into whether the existing dealers are providing adequate representation. The proposed facilities of the dealership's whose application is under review is not a legally relevant consideration.
The first-sentence of Finding of Fact 13 is rejected.
Finding of Fact 14 is amended to strike the phrase "or representation of its manufacturer" from the last sentence.
All of Findings of Fact 10, 15 and 17 are rejected.
Department's Findings of Fact
The following Findings of Fact are made by the Department. The paragraph numbers 5-17 indicate which Finding of Fact in the Recommended Order they should be added to or substituted for, as the case may be. Paragraph numbers 19-49 are new findings made by the Department based upon the record.
5. Yamaha presented an analysis of the area, to demonstrate that the geographic boundaries of the "territory or community" are the boundaries of Volusia County.
7. The population of Volusia County is separated from the surrounding counties on the north and south, such as to constitute it as a separate community or territory.
It is not possible to determine market share or make other analyses with the individual sales data of one dealer or manufacturer because it is impossible to compare the sales information reported by that dealer or manufacturer with the remainder of the industry.
Registration data is compiled by state records by Polk, and to the extent that vehicles are registered for use on the roads, represents a uniform and independent source of data on market penetration of motor vehicles.
Motorcycle registrations are divided into three categories: (1) Motorcycles; (2) Scooters; and (3) All Terrain Vehicles (ATV's).
While most motorcycles and scooters are registered for road use in the same manner as automobiles and trucks, all but a small number of all terrain vehicles (ATV's) are not registered. Registration data does reflect a very small number of registrations of ATV's which are utilized on public beaches, but these are a tiny fraction of the total ATV's sold. It is therefore not possible to analyze ATV sales based on Polk registration information, and the study must be limited to motorcycle and scooter registrations.
In order to examine the Volusia County market on a more detailed basis, Yamaha ordered a customized Polk registration report, with registrations compiled by Zip Code area, for the calendar year 1987, the last full year for which registration information was available on the date of the hearing.
Through this report it is possible to determine Yamaha's market share for Zip Code or group of Zip codes in the County.
This registration data by Zip code, as presented on Exhibit 16, confirms the existence of two separate identifiable plots within which the two existing dealers at their present locations are able to enjoy a geographic advantage because of their location.
This advantage is demonstrated by the fact that Yamaha is able to, achieve in its national market penetration in motorcycles plus scooters (the vehicles for which complete Polk Registration statistics are available) in the Zip Codes in which the dealers are presently located: Holly Hill (32017) and New Smyrna Beach (32069).
The identifiable plot in which Hamilton is located, however, does not extend south of its own Zip Code, 32017. All three Zip Codes south of 32017, namely 32018, 32014, and 32019, do not achieve Yamaha's national average penetration for motorcycles and scooters, which is 18.9%. Indeed, these three areas achieve less than 14.2% of the industry, or 75% of Yamaha's national average penetration.
Thus, it can be seen that there are two identifiable plots, one in the northern half of the coastal area and one in the southern half. Zip Code 32018 is a long area along the coast and could be argued to fit in either the northern or southern identifiable plot. The proposed location of Walkers in Zip Code 32019. Although it is not possible to determine exactly what Walker's new identifiable plot will be after the relocation, it is clear that it will still be in the are which is separate from Hamilton's identifiable plot with Zip Code 32014 in between the two locations.
These two identifiable plots can also be confirmed by the place of dealers by Honda, Yamaha's chief competitor, in both the northern and southern areas.
If Hamilton is determined to have standing to protest pursuant to section 320.642, then it is necessary for Yamaha to prove that it is not receiving "adequate representation" in order for the application to be granted.
Having determined the geographical boundaries of the territory or community and the identifiable plots, it may be demonstrated that Yamaha is receiving inadequate representation in either the territory or community, or in an identifiable plot, or both.
Yamaha proposed utilizing its national or Florida average market penetration for motorcycles plus scooters as the standard against which its performance in the Volusia community or territory should be measured.
The national average standard is a reasonable and achievable standard in that it is being achieved in the Zip Codes in Volusia County where a dealer is located and is able to enjoy a geographic advantage.
Similarly, the Florida Yamaha average for 1987 (21.11%) was almost achieved in the Zip Code area in which Hamilton is located. In this area, Yamaha achieved 20.58%, by registering 14 scooters and motorcycles out of 68 total. Ex. 10, page 2.
Thus, both the national and Florida averages are demonstrated to be reasonable and achievable standards. Yamaha's penetration for Volusia County has consistently been significantly below both national and Florida averages for 1987. 1987, and the first eight months of 1988. Ex. 9.
For 1986, Yamaha penetration in Volusia County was 13.97%, or 81% of the national penetration of 17.20%, and only 72%, of the Florida penetration of 19.48%.
In 1987, Yamaha's penetration in Volusia dropped to 13.35, constituting 71% of the national penetration of 18.92%, and only 63% of the Florida penetration of 21.11%.
This trend continued in the first eight months of 1988 when Yamaha's penetration dropped against against the total industry to 13.33%, or 67% of national (19.74%) and only 59% of the Florida penetration (22.41%).
Similarly, in Florida where Yamaha registrations increased 24% from 1985 (3292) to 1987 (4092), Yamaha registrations in Volusia County decreased 40% from 181 to 110 for the same period.
By every standard, the representation which Yamaha has been afforded in Volusia County as a whole during the last three years has been inadequate and has deteriorated further each year.
Similarly, Yamaha's representation in the both identifiable plots,
i.e. northern and southern coastal Volusia County is below national average. This is demonstrated by the gain/loss dot map, Exhibit 15. Using the conservative national average, 18.92%, for 1987, the dot map illustrates the number of registrations which would be necessary to bring each area up to national average. Similarly, for those areas which are above national average, the dots shown demonstrate the number of registrations above national average which were achieved during the year.
Using any combination of zip codes in the north and any combination in the south, it can be seen that the number of red dots (losses) in the areas below national average greatly exceed the number of green dots (gains) in the areas above national average. Accordingly, the representation which Yamaha is receiving in both identifiable plots is inadequate.
On the basis of the evidence of inadequacy of representation in both the territory or community and the identifiable plot, Yamaha would be entitled to place an additional dealer in the market if its chose to do so. However, it has selected instead to relocate Walker.
Adhering to the language of Section 320.642 it is unnecessary to proceed further for there is no requirements nor expectation that the proposed action by the manufacturer or importer will necessarily correct the inadequate representation which has been demonstrated.
However, in this proposed relocation, it is significant to analyze the mislocation of Walker to most conveniently serve the market and the potential effect which the relocation will have of Yamaha's potential to achieve adequate representation in the area.
As noted previously, Yamaha is achieving national average penetration in the zip codes immediately surrounding the two existing dealer locations in the county.
Hamilton is located in Holly Hill in a zip code with a significant number of total industry motorcycle plus scooter registrations, Exhibit 13, and Exhibits 17 & 18. Walker's in New Smyrna, on the other hand, is located in an area with much small population and total industry motorcycle registrations than the areas to the north, zip codes 32108, 32014, and 32019.
Further, although there has been population growth throughout the county during the period between 1980 and 1988, the growth in the South Daytona area in which Walker proposes to relocate (32018, 32014, and 32019) has been more significant, both in numbers of people, than the three zip codes to the south, 32069, 32032, and 32759, where Yamaha enjoys adequate representation and an advantage by virtue of Walker's present location.
Thus, it can be seen that although Yamaha is enjoying a geographic advantage in the areas where its dealers are presently located, Walker's is not located appropriately to exploit that advantage in the area with the most population and total industry motorcycle and scooter registrations.
An optimal location analysis quantifies and portrays graphically this current mislocation problem and suggests a proposed location which would provide the most convenience for the motorcycle consuming public.
With Hamilton's location fixed in Holly Hill, the program searches for a zip code area which would achieve the maximum convenience for the motorcycle consuming public, as represented by the total industry registrations for 1987 in each zip code area. This analysis suggests, as reflected in Exhibit 20, that a second Yamaha location in Zip Code 32019 would provide optimal location in the area.
Conclusions of Law
The Department of Highway Safety and Motor Vehicles has jurisdiction of the subject matter and the parties thereto pursuant to, section 320.642, Florida Statutes.
Section 320.642, Florida Statutes, establishes the following standards for acting on an application for a new motor vehicle dealer license:
The Department shall deny an application for a motor vehicle dealer license in any community or territory where the licensee's presently licensed motor vehicle dealer or dealers have complied with licensee's agreements and are providing adequate
representation in the community or territory for such licensee. The burden of proof in showing inadequate representation shall be on the licensee.
Since no issue has been raised concerning whether Yamaha's present dealers have complied with their franchise agreements, the sole issue is whether such dealers are providing "adequate representation" for Yamaha in the community or territory" involved.
The standard of adequate representation may be considered in relation to the community or territory as a whole. If inadequate representation in the community or territory as a whole cannot be shown, the manufacturer may show the existence of an "identifiable plot not yet cultivated" within the community or territory to demonstrate inadequate representation. Bill Kelley Cadillac, Inc. vs. Calvin, 322 So.2d 50 (Fla. 1st DCA 1975), and Dave Zinn Toyota v. Department of Highway Safety and Motor Vehicles, 432 So.2d 1320 (Fla. 3rd DCA 1983).
For the purpose of this case, the relevant territory or community is Volusia County. The evidence establishes that this territory or community constitutes an identifiable and distinct retail marketing area, for the purpose of evaluating adequacy of representation under section 320.642, Florida Statutes.
Yamaha has further demonstrated that there exists an identifiable plot not yet cultivated where the applicant dealer seeks to relocate, in which representation for Yamaha is inadequate using the reasonable `and achievable standard of either national or Florida average market penetration.
The purpose of Section 320.642, Florida Statutes, is to prevent manufacturers from establishing more dealers than a market can support. Plantation Datsun, Inc., v. Calvin, 275 So.2d 26 (Fla. 1st DCA 1973). Yamaha does not seek to add a dealer but merely to relocate a dealer from one location in a territory or community to another.
Both the relevant territory or community and especially the identifiable plot where Walker proposes to relocate, are growing rapidly. Although Yamaha is receiving adequate representation in small areas immediately surrounding the two dealerships, it is clear that Walker is not optimally located to serve the area.
WHEREFORE, the application of Walker to relocate its Yamaha dealership in Volusia County is hereby approved.
CHARLES J. BRANTLEY, Director
Division of Motor Vehicles Department of Highway Safety and Motor Vehicles
Neil Kirkman Building Tallahassee, Florida 32399
I hereby certify that the original has been filed in the official records of the Division of Motor Vehicles of the Department of Highway Safety and Motor Vehicles, this 5th day of December, 1989.
COPIES FURNISHED:
Dean Bunch, Esquire
101 North Monroe Street Suite 900 Tallahassee, Florida 32301
Linda McMullen, Esquire
600 First Florida Bank Building Tallahassee, Florida 32301
Michael M. Parrish Hearing Officer
Division of Administrative Hearings The DeSoto Building
Tallahassee, Florida 32399
| Issue Date | Proceedings |
|---|---|
| Apr. 06, 1989 | Recommended Order (hearing held , 2013). CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Dec. 05, 1989 | Agency Final Order | |
| Apr. 06, 1989 | Recommended Order | Section 320.642 applies to dealer relocation in same area; evidence insufficient to show inadequate representation |
