The Issue The issue is whether the Department of Highway Safety and Motor Vehicles should approve the establishment of a proposed dealership by SunL Group, Inc., in Gulfport, Florida.
Findings Of Fact TRM is in the business of selling motor scooters in Gulfport, which is in Pinellas County. TRM is owned by Thomas R. Malin, III. TRM is currently an authorized dealer of scooters manufactured and/or imported by Carter Brothers and Tank Sports. Those scooters sell in the $2,000 to $3,000 price range. TRM is seeking through this proceeding to become an authorized dealer of scooters imported by SunL.1 Those scooters sell in the $1,450 to $1,995 price range. No evidence was presented at the hearing regarding the location or products sold by West Coast, and there is no evidence that West Coast sells SunL scooters. There are no dealers selling SunL scooters in the Pinellas County area, according to Mr. Malin. West Coast was provided due notice of the date, time, and location of the final hearing in this case. No representative of West Coast appeared at the final hearing.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Department issue a final order dismissing West Coast’s protest and approving TRM’s proposed SunL dealership in Gulfport. DONE AND ENTERED this 12th day of March, 2007, in Tallahassee, Leon County, Florida. S T. KENT WETHERELL, II Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 12th day of March, 2007.
Conclusions This matter came on for determination by the Department upon submission of an Order Closing File by P. Michael Ruff, an Administrative Law Judge, of the Division of Administrative Hearings, a copy of which is attached and incorporated by reference in this order. The Department hereby adopts the Order Closing File as its Final Order in this matter. ORDERED that this case is CLOSED and no license will be issued to Galaxy Powersports, LLC, d/b/a JCL International, LLC, and Kitai Powersports, Inc. to sell motorcycles manufactured by Taizhou Zhongneng Motorcycle Co. Ltd. (ZHNG) at 228 North 3" Street, Jacksonville (Duval County), Florida 32250. DONE AND ORDERED this w)A ~day of June, 2009, in Tallahassee, Leon County, Florida. 'ARL A. FORD, Directo: Division of Motor Vehicles Department of Highway Safety and Motor Vehicles Neil Kirkman Building Tallahassee, Florida 32399 Filed with the Clerk of the Divisio pploror Vehicles this A— day of June, 2009. NOTICE OF APPEAL RIGHTS Judicial review of this order may be had pursuant to section 120.68, Florida Statutes, in the District Court of Appeal for the First District, State of Florida, or in any other district court of appeal of this state in an appellate district where a party resides. In order to initiate such review, one copy of the notice of appeal must be filed with the Department and the other copy of the notice of appeal, together with the filing fee, must be filed with the court within thirty days of the filing date of this order as set out above, pursuant to Rules of Appellate Procedure. CAF/vlg Copies furnished: Terry Henson Scooter Boutique, Inc. 12526 Masters Ridge Drive Jacksonville, Florida 32225 Claudio Biltoc Kitai Powersports, Inc. 143 Belmont Drive St. Johns, Florida 32259 Pete Biltoc Kitai Powersports, Inc. 13887 Sea Prairie Street Jacksonville, Florida 32216 Michael J. Alderman, Esquire Assistant General Counsel Department of Highway Safety and Motor Vehicles Neil Kirkman Building, Rm. A-432 Tallahassee, Florida 32399-0504 P. Michael Ruff Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 Nalini Vinayak Dealer License Administrator Florida Administrative Law Reports Post Office Box 385 Gainesville, Florida 32602
Conclusions This matter came before the Department for entry of a Final Order upon submission of an Order Closing File and Relinquishing Jurisdiction by William F. Quattlebaum, Administrative Law Judge of the Division of Administrative Hearings. The Department hereby adopts the Recommended Order as its Final Order in this matter. Accordingly, it is hereby ORDERED and ADJUDGED that Petitioner, Tropical Scooter, LLC, be granted a license to sell motorcycles manufactured by Zhejiang Jonway Motorcycle Manufacture Co. Ltd. (SHEN) at 11610 Seminole Boulevard, Largo (Pinellas County), Florida 33778, upon compliance with all applicable requirements of Section 320.27, Florida Statutes, and all applicable Department rules. Filed February 10, 2012 11:56 AM Division of Administrative Hearings DONE AND ORDERED this QWeay of February, 2012, in Tallahassee, Leon County, Florida. ie Baker, Chief Bureau of Issuance Oversight Division of Motorist Services Department of Highway Safety and Motor Vehicles Neil Kirkman Building Tallahassee, Florida 32399 Filed with the Clerk of the Division of Motorist Services this OVW day of February, 2012. wats Lineal NOTICE OF APPEAL RIGHTS Judicial review of this order may be had pursuant to section 120.68, Florida Statutes, in the District Court of Appeal for the First District, State of Florida, or in any other district court of appeal of this state in an appellate district where a party resides. In order to initiate such review, one copy of the notice of appeal must be filed with the Department and the other copy of the notice of appeal, together with the filing fee, must be filed with the court within thirty days of the filing date of this order as set out above, pursuant to Rules of Appellate Procedure. JB/jc Copies furnished: Darrell Green Jonway USA Co. Ltd. 1503 Kelly Boulevard Carrollton, Texas 75006 John V. Leonard Finish Line Scooters, LLC 6600 Gulf Boulevard St. Pete Beach, Florida 33706 Michelle R. Stanley Tropical Scooters, LLC 11610 Seminole Boulevard Largo, Florida 33778 William F. Quattlebaum Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 Nalini Vinayak Dealer License Administrator
Conclusions This matter came before the Department for entry of a Final Order upon submission of an Order Closing File by Lisa Shearer Nelson, an Administrative Law Judge of the Division of Administrative Hearings, a copy of which is attached and incorporated by reference in this order. The Department hereby adopts the Order Closing File as its Final Order in this matter. Said Order Closing File was predicated upon Respondent's notice of withdrawal. Accordingly, it is hereby ORDERED that this case is CLOSED and a license may be issued to Gas Sippers, LLC to sell motorcycles manufactured by Taizhou Zhongneng Motorcycle Co. Ltd. (ZHNG) at 6480 20th Street, #106, Vero Beach (Indian River County), Florida 32966 upon compliance with all applicable requirements of Section 320.27, Florida Statutes, and all applicable Department rules. Filed October 15, 2009 3:39 PM Division of Administrative Hearings. DONE AND ORDERED this ;J? ay of October, 2009, in Tallahassee, Leon County, Florida. Division of Motor Vehicles Department of Highway Safety and Motor Vehicles Neil Kirkman Building Tallahassee, Florida 32399 Filed with the Clerk of the Division of Motor Vehicles this _/;JJJ day of October, 2009. . 0..- .t.dmlnlstrallo NOTICE OF APPEAL RIGHTS Judicial review of this order may be had pursuant to section 120.68, Florida Statutes, in the District Court of Appeal for the First District, State of Florida, or in any other district court of appeal of this state in an appellate district where a party resides. In order to initiate such review, one copy of the notice of appeal must be filed with the Department and the other copy of the notice of appeal, together with the filing fee, must be filed with the court within thirty days of the filing date of this order as set out above, pursuant to Rules of Appellate Procedure. CAF:vlg Copies furnished: John Dikov Valley Scooters, LLC 1687 Blythe Island Drive Brunswick, Georgia 31523 2
The Issue The issue in this case is whether a motor vehicle dealer license should be issued to S.G. Silverman, Respondent, by the Department of Highway Safety and Motor Vehicles, Department. Intervenor American Honda Motor Company has the burden of proof in this case, pursuant to Section 320.642, Florida Statutes. The Department must deny an application if existing dealers have complied with their franchise agreements and are providing adequate representation. There is no contention in this case that the existing dealers, Petitioners Satnam Enterprises, Inc., d/b/a Honda of Fort Lauderdale, and International Cycles, Inc., d/b/a Honda International and Intervenor R.B.L. Cycles, d/b/a Boca Honda Sales, have breached their franchise agreement with American Honda Motor Company. The only issue presented is whether they are providing adequate representation in the community or territory. Petitioners' Exhibit 1 was a deposition upon written interrogatories of Edward Lemco taken by Petitioners on September 4, 1985 in Albany, Oregon. Upon the agreement of the parties, the Hearing Officer instructed Petitioners to make Mr. Lemco available following the hearing at a mutually convenient time to place to allow Respondent and Intervenor American Honda Motor Company to cross-examine him, and to submit a transcript of that cross-examination. Petitioners complied with this instruction, confirmed by Order dated September 25, 1985, and filed the deposition of Edward Lemco on November 4, 1985 which is hereby received as exhibit P-1A. Petitioners' Exhibit 14 was a map of the area prepared by the general manager of one of the Petitioners, Surg Soni, and Petitioners were instructed to reproduce the exhibit and provide copies to all parties within twenty days of the hearing. The exhibit, P-14, was returned to Petitioners for this purpose. Since Petitioners have failed to comply with this instruction or to return P-14 to the Hearing Officer, this exhibit is excluded and not received in evidence. Petitioners' remaining fifteen (15) exhibits have been received in evidence. Respondent Silverman offered three (3) exhibits which were received. Intervenor American Honda offered eighteen(18) exhibits, two of which (I-10 and I-ll) were rejected, but the remaining sixteen (16) were received in evidence. The general managers of Satnam Enterprises, Inc. and International Cycles, Inc., Surg Soni and Pablo Canseco, as well as the owner of R.B.L. Cycles, Ron Lipack, testified on behalf of Petitioners and Intervenor, R.B.L. Cycles. S. G. Silverman testified on his own behalf. Intervenor American Honda Motor Company called Joe Prussiano, Jr., former southeastern zone manager, Gerald L. Ford, Ph.D., who was accepted as an expert in market and economic analysis, and Dick Clark, current southeastern zone manager, to testify on its behalf. A transcript of the final hearing was filed on October 22, 1985 and thereafter the parties were allowed ten (10) days to file proposed findings of fact pursuant to Section 120.57(1)(b)4., Florida Statutes, and Rule 221-6.31, Florida Administrative Code. A ruling on each proposed finding of fact has been made in this Recommended Order as reflected in the attached Appendix.
Findings Of Fact On or about January 24, 1985, Respondent S. G. Silverman submitted an application for a license as a motor vehicle dealer to the Department of Highway Safety and Motor Vehicles. The application indicated that his business would be located in the vicinity of Copans and Powerline Roads in Pompano Beach, Broward County, Florida. On or about November 12, 1984, Silverman had received a tentative approval from American Honda Motor Company, Intervenor, of his application for a Honda motorcycle, all- terrain-vehicle and motor scooter franchise. Three Honda motorcycle, all-terrain-vehicle and motor scooter dealerships presently exist within the community or territory to be served by Respondent Silverman. These are: Petitioners Satnam Enterprises, Inc., d/b/a Honda of Fort Lauderdale, and International Cycles, Inc., d/b/a Honda International, and Intervenor R.B.L. Cycles, d/b/a Boca Honda Sales. Petitioners are located in Broward County, south of Silverman's proposed location, and Intervenor is located in the southern part of Palm Beach County, north of Silverman's proposed location. Intervenor R.B.L. Cycles accounts for 10 percent of all American Honda units sold to Broward County residents, and one-third of its sales are to Broward County residents. These three existing dealers have protested the issuance of a license to Respondent Silverman. Based upon the testimony and evidence presented by Gerald L. Ford, Ph.D., who was accepted as an expert in market and economic analysis, American Honda Motor Company is not being adequately represented in the territory or community by these existing three dealers. Specifically this is evidenced by the following: According to R. L. Polk, from 1981 through 1984 American Honda's statewide market share increased from 40.87 percent to 55.73 percent while its market share in Broward County only increased from 45.06 percent to 48.07 percent, and from 45.16 percent to 54.58 percent in Palm Beach County. Thus, while its market share in Broward and Palm Beach Counties exceeded its statewide market share in 1981, American Honda's market share in Broward and Palm Beach Counties lagged behind its statewide market share in 1984. For the five year period from 1980 to 1984, American Honda's market penetration in Broward County averaged approximately 10 percent behind that in the entire state. At the location now occupied by Petitioner Satnam Enterprises, Inc., American Honda had sales of 1064 units in 1981 and Petitioner Satnam Enterprises, Inc. had sales of 1131 units in 1984. At the location now occupied by Petitioner. International Cycles, Inc., American Honda had sales of 961 units in 1981 and Petitioner International Cycles, Inc. had sales of 831 units in 1984. At the location now occupied by Intervenor R.B.L. Cycles, American Honda had sales of 1159 units in 1981, and Intervenor R.B.L. Cycles had sales of 798 units in 1984. Thus, sales of 3184 American Honda units took place at these three locations in 1981, and these three existing dealers had a decrease in sales to 2760 units in 1984. Between 1981 and 1984 an increasing number and percentage of American Honda purchasers from Fort Lauderdale and Broward County went outside the community or territory to make their purchase of an American Honda unit from dealers other than these three existing dealers. Since there are currently fifty-two (52) American Honda dealerships in Florida and the 1984 state population was estimated to be 10,930,389, the current statewide ratio of dealerships to population is 1 to 210,200. If Respondent Silverman's application is approved there will be fifty-three (53) American Honda dealerships in Florida and the ratio will be 1 to 206,234. There are currently two dealerships in Broward County, which had a population of approximately 1,100,000 in 1984. The ratio of dealers to population in Broward County is 1 to 550,000 and it would be 1 to 366,666 if Respondent Silverman's application is approved. Thus, population per dealership in Broward County currently far exceeds the statewide ratio, and would continue to exceed the statewide ratio by a significant amount if the Silverman application is approved. There are a total of six (6) dealerships currently existing in Broward and Palm Beach Counties and a total population in those two counties in 1984 of approximately 1,800,000. If Respondent Silverman's application is approved the ratio of dealers to population in these counties would be 1 to 257,143, which exceeds the current statewide ratio of 1 to 210,200, and the ratio statewide that would exist if this application is approved of 1 to 206,234. While American Honda sales in Broward County were only slightly below the statewide ratio of sales to population in 1981 and 1982, sales per population in Broward County fell significantly in 1983 and 1984 compared to the statewide ratio. There was one sale for every 367 people throughout the state in 1984, but in Broward County there was only one sale for every 503 people. If the ratio of sales to population in Broward County had been the same as the statewide ratio in 1984, 3112 American Honda units would have been sold. In fact, the two existing Broward County dealers sold 1628 units and other dealers sold 644 units to Broward County residents in 1984, for a total of 2272 sold to Broward County residents in 1984. Therefore, there was an estimated unmet sales potential of 840 units in Broward County in 1984. In 1984 each American Honda dealership sold an average of 585 units. Sales in 1984 by Petitioners and Intervenor Cycles exceeded the statewide average of 585 units, and Petitioner Satnam Enterprises, Inc. has shown a significant increase in sales from 1983 to 1984. Despite this performance, however, an unmet sales potential, which exceeded the statewide average sales per dealership in 1984, continued to exist. Recognizing that not every person is a potential purchaser of a motor cycle, motor scooter or all- terrain-vehicle, the "target" population of males between the ages of 14 and 64 has been identified. In 1984 there was an estimated "target" population in Broward County of approximately 327,783 people. Assuming unit sales to this "target" group occurred in Broward County at the same rate as they occurred statewide, there was an unmet need in 1984 of approximately 572 units which is just slightly below the average unit sales for all American Honda dealerships in the state of 585. Broward County's population is projected to grow from approximately 1,149,000 in 1985 to 1,591,700 by the year 2000, which is almost a 39% growth in population, or an annual growth of 2.6%. This exceeds the rate of population growth projected for the state as a whole. Broward County is an economically viable market, ranking second among all counties in such things as total and per capita Effective Buying Income, Buying Power Index, and total per capital Retail Sales. Additionally, Broward County has shown substantial growth in these figures from 1980 to 1984. These are economic indices typically used to gauge the vitality of a market. Based upon the testimony of Surg Soni, general manager of Petitioner Satnam Enterprises, Inc., it is evident that his sales in 1985 have declined approximately 28% from their level in 1984. Most of his potential customers feel that proximity to a dealership is unimportant, and have therefore been willing to travel to other dealerships to make their purchases. Pablo Canseco, general manager of Petitioner International Cycles, Inc., also indicated his sales for 1985 have declined from 1984. However, this decline in sales is consistent with a flattening of sales expected nationally for the motor cycle industry. They, as well as Ron Lipack, owner of R.B.L. Cycles, pointed out that factors other than dealer performance may result in a deficient market share or penetration level such as: the timing of product releases by the manufacturer; pricing policies of the manufactures; the quantity and type of units made available to dealers to sell; the availability of consumer retail financing programs: the existence of manufacturer advertising campaigns, insurance rates in the area. While these additional factors may contribute to a lack of representation in a particular territory or community, the weight of the evidence in this case does not establish that any one, or combination of these factors, is any more significant than overall dealer performance in explaining the lack of representation which has been demonstrated by Intervenor American Honda Motor Company. Broward County is found to be the relevant market area, community or territory under consideration in this case. Petitioners and Intervenor R.B.L. Cycles are found to be existing dealers serving this territory or community to be served by Respondent Silverman due to the proximity of Silverman's proposed location to these dealers, the record of sales by Petitioners and Intervenor R.B.L. Cycles to Broward County residents, and transportation patterns and roadways in the area. "Market share" and sales "penetration" are reliable measures of dealer representation. "Market share" measures a manufacturer's percentage of a given market based upon registration data reported by R. L. Polk. All- terrain-vehicle sales are not reflected in R. L. Polk data since they are generally not used on roads and highways and therefore are not registered. "Penetration" measures actual unit sales compared with total sales potential using manufacturer warranty data, whether or not the vehicle purchased is registered.
Recommendation Based upon the foregoing, it is recommended that the Department of Highway Safety and Motor Vehicles issue a Final Order approving Respondent Silverman's application for a motor vehicle dealership. DONE and ENTERED this 13th day of November, 1985, at Tallahassee, Florida. _ DONALD D. CONN, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 13th day of November, 1985. APPENDIX Rulings on Petitioners' and Intervenor R.B.L. Cycles' Proposed Findings of Fact are as follows: (Unnumbered paragraphs have been consecutively numbered for identification beginning with the last paragraph on page 2) 1,2 Rejected based upon Findings of Fact 3,6. 3 Rejected based upon Finding of Fact 3(c)-(g),(i)(j) and 6. 4-8 Rejected as argumentative characterizations of testimony which are not appropriate proposed findings of fact. Otherwise, rejected as irrelevant, immaterial and not based upon competent substantial evidence in the record. Rejected based upon Findings of Fact 2,5. Adopted in part in Finding of Fact 4, but otherwise rejected as not based on competent substantial evidence. Rejected based on Finding of Fact 6. Rejected based on Finding of fact 6, and otherwise as not based on competent substantial evidence. Rejected as irrelevant and immaterial. Rejected as irrelevant, immaterial and not based upon competent substantial evidence. Rejected based upon Findings of Fact 3,4,6. It is evident that "market share" is not the sole basis for the finding of inadequate representation, but it is a significant factor. Adopted in part in Finding of Fact 3(a). 17-19 Rejected as contrary to competent substantial evidence in the record. 20,21 Rejected based upon Finding of Fact 3(i) and otherwise rejected as not based upon competent substantial evidence. Rejected as irrelevant and immaterial. Rejected based upon Finding of Fact 3 and otherwise irrelevant, immaterial and not based on competent substantial evidence. 24,25 Rejected generally based on Finding of Fact 5. However, the reference in paragraph 25 to the Petitioners' and Intervenor R.B.L. Cycles' sales performance in 1984 is adopted in Finding of Fact 3(h). Adopted in Findings of Fact 2,5. Rejected based upon Findings of Fact 3,4. Rejected based upon Findings of Fact 3,4,6. Rejected based upon Findings of Fact 3,4. Rulings on Respondent Silverman's Proposed Findings of Fact: (Unnumbered paragraphs have been consecutively numbered for identification beginning with the last paragraph on page 1) 1,2 Adopted in Finding of Fact 3. 3,4 Rejected as irrelevant and unnecessary. Adopted in Finding of Fact 3. Rejected as cumulative and unnecessary. Rejected as cumulative and unnecessary. 8-16 Rejected as irrelevant and unnecessary. These paragraphs largely set forth argument based on the evidence and do not succinctly set forth relevant proposed findings of fact. Rulings of Intervenor American Honda's Proposed Findings of Fact. 1 Adopted in Finding of Fact 1. 2, 3 Adopted in Finding of Fact 2. Rejected as irrelevant and unnecessary. Adopted in part in Finding of Fact 1. Adopted in part in Findings of Fact 1, 2. Adopted in part in Finding of Fact 5. Rejected as irrelevant and unnecessary. 9,10 Adopted in Finding of Fact 3(a). 11 Adopted in part in Finding of Fact 3(k). 12 Adopted in part in Finding of Fact 3(j). 13 Adopted in part in Finding of Fact 3(d). 14 Adopted in part in Finding of Fact 3(f). 15 Adopted in part in Finding of Fact 3(c). 16 Rejected as simply a summary of, and argument on, testimony presented. 17-19. Adopted in part in Finding of Fact 3. 20-21 Rejected as irrelevant and unnecessary. 22. Adopted in part in Finding of Fact 4. COPIES FURNISHED: N. Sandy Konigsberg, Esquire 2310 Hollywood Boulevard Hollywood, FL 33020 Michael J. Alderman, Esquire Department of Highway Safety and Motor Vehicles Neil Kirkman Building Tallahassee, FL 32301 Julia Sullivan-Waters, Esquire Dennis R. Ferguson, Esquire Post Office Box 1288 Tampa, FL 33601 Elizabeth J. Du Fresne, Esquire Gerald McBride, Esquire 2950 S.W. 27th Avenue Suite 310 Coconut Grove, FL 33133 Robert W. Dickerson, Esquire 611 West Sixth Street 34th Floor Los Angeles, CA 90017 Leonard R. Mellon, Executive Director Department of Highway Safety and Motor Vehicles Neil Kirkman Building Tallahassee, FL 32301
Findings Of Fact By stipulation, Jones & Dabney, Inc. has standing. Jones & Dabney, Inc. does business as Tri City Honda Suzuki (Tri City). Tri City sells Honda and Suzuki motorcycles at a dealership located at 14996 US Rte. 19 North. The location, which is in the south-central part of Pinellas County, is east of Largo, southeast of Clearwater, and northwest of St. Petersburg. Tri City formerly sold and serviced only Honda motorcycles. American Suzuki Motor Corporation (American Suzuki) approved Tri City's application for a Suzuki franchise on April 1, 1991. Tri City used its existing Honda location for the Suzuki dealership. Tri City spent $3000 in non-resale items, with nearly half of that amount for special Suzuki tools. Tri City also spent about $12,500 for parts. The initial non-vehicle expenditure of about $15,500 is about $3000 less than usual because American Suzuki allowed Tri City to use existing Honda equipment, such as video equipment, where possible. At the time of the application and approval process, Mr. Jones of Tri City and representatives of American Suzuki discussed the fact that American Suzuki would need a dealer for Pasco and north Pinellas counties. Mr. Jones said that he might be interested in moving his dealership into north Pinellas County. American Suzuki representatives indicated that they would listen to any proposal that Mr. Jones might like to make. However, he never raised the issue after he was awarded the Suzuki franchise. American Suzuki is represented presently in the area of Pinellas, Hillsborough, and Pasco counties by Tri City, a multiline dealer in Tampa (handling Suzuki, Honda, and Kawaski) and a multiline dealer in Zephyrhills, which is in eastern Pasco County (handling Suzuki and Kawaski). Previously, Suzukis were sold and serviced in south Pinellas County by a long-term dealer in Pinellas Park about 4.3 miles south of Tri City's location. The Pinellas Park dealer retired and sold the business, which shortly thereafter failed on January 2, 1991. American Suzuki was also represented in Pasco County and north Pinellas County by a dealer located in Holiday. The Holiday dealership was on US Rte. 19 about one-quarter mile north of the Pasco-Pinellas county line. At one time the fourth largest single-line Suzuki dealer in Florida, the Holiday dealer diversified, lost interest in the Suzuki motorcycle line, and closed the Suzuki dealership on March 2, 1990. The application to which Tri City objects was made more than one year following the closing of the Holiday dealership, so Tri City has a right to protest the establishment of the new dealer. The present case involves the decision of American Suzuki to award a Suzuki franchise to Cycle Springs, Inc. Cycle Springs, is currently a Yamaha dealer located at 37182 US Rte. 19, Palm Harbor. The location is in north Pinellas County just south of Tarpon Springs. Cycle Springs is located about 4 miles south of the former Holiday dealer. The distance between the Cycle Springs and Tri City locations is about 13 miles. It takes about 30 minutes to drive the distance during rush hour. American Suzuki's market share has been slipping in Pasco and Pinellas counties. In 1987, American Suzuki's market share in the national, Florida, Pasco County, and Pinellas County markets was, respectively, 11.57 percent, 12.75 percent, 21.66 percent, and 15.59 percent. By 1990, the manufacturer's market shares had risen to 14.65 percent nationally and remained about the same in Florida at 12.78 percent. But the shares for Pasco and Pinellas counties had fallen to 9.52 percent and 9.91 percent, respectively. In 1991, American Suzuki's market shares climbed in the country to 16.34 percent, in the state to 14.3 percent, and in Pasco County to 13.82 percent. The market share for Pinellas County remained roughly unchanged at 9.88 percent. In 1992, slight changes in market share for the country and Florida (to 15.92 percent and 14.62 percent, respectively) were accompanied by a decline of market share in Pasco County (to 12.2 percent) and an increase in market share in Pinellas County (to 14.44 percent). Market penetration in Pinellas County has improved compared to market penetration in Pasco County, which remains only 56 percent of what it was in 1987. However, even in Pinellas County market penetration is slightly less than it should be. It is about 1.5 percentage points less than it was in 1987 and almost three percentage points less than the average market penetration for American Suzuki in comparable Florida urban markets. Market penetration is based on motorcycle registrations, which, in Florida, exclude a large number of motorcross-type dirt and racing motorcycles and almost all all- terrain vehicles. Market penetration reflects the county in which vehicles are registered, not the location of dealers making sales. Thus, market penetration figures do not precisely reflect actual sales by dealers. However, the sales figures also indicate that Pinellas and Pasco counties are underperforming in terms of Suzuki sales. For 1992, for example, American Suzuki sold only 35 percent of expected sales in Pasco County and Pinellas County. By contrast, in 1988, American Suzuki sold 98 percent of expected sales in Pasco County, but only 39 percent of expected sales in Pinellas County, which suggests that the expected sales in Pasco County is realistic, but the expected sales in Pinellas County--due to demographic reasons-- is not realistic. American Suzuki has given Tri City a reasonable opportunity to increase Suzuki market share in the area. Tri City's initial order of vehicles has been sold except for one 250 cc dirt bike and one 350 cc dirt bike, which Mr. Jones chose to order with guidance from an American Suzuki representative, and two 80 cc motorcycles, which Mr. Jones ordered at the request of the American Suzuki representative in order to obtain these small, relatively inexpensive bikes for another dealer, who unfortunately reneged on his agreement to buy the bikes from Tri City. As of May 3, 1993, a total of 12 vehicles in Tri City's 55-vehicle inventory remain from 1991 orders, including the four described in the preceding paragraph. Except for three vehicles ordered in 1993, the rest of the inventory was purchased in 1992. From May, 1992, to April, 1993, Tri City has worked down its inventory of Suzukis from 90 to 55 vehicles. This corresponds to Tri City's initial order of 58 vehicles. In reducing its inventory during 1992, when Tri City took 77 vehicles from Suzuki, Tri City took only 27 vehicles in 1993, including only 18 of the 31 motorcycles allocated to it. American Suzuki has given Tri City a reasonable opportunity to increase market share and sales. Tri City has generally not been out of the better-selling Suzukis, but apparently has elected to reduce inventory, rather than try to increase sales, in order to sustain a more comfortable ratio of inventory to vehicles than the ratio that prevailed in 1992. At present, Tri City does not appear well-situated to increase sales in Pinellas County or Pasco County, and the failure to do so, especially in Pasco County where American Suzuki has lost considerable sales and market share, tends to demonstrate inadequate representation. Tri City and Cycle Springs are about eight miles, or 38 percent, closer than the former Holiday and Pinellas Park Suzuki dealers. While greater geographic spread might be optimal, American Suzuki attempted to fill the Pasco County location for some time without success. Due to the reduced profitability of motorcycle dealerships, when compared to many automobile dealerships, it is often necessary to obtain an existing dealer or to convert a small retail operation, such as a lawnmower store. In this case, American Suzuki investigated the available possibilities and Cycle Springs appears to have emerged as the lone suitable applicant that was interested in taking on the Suzuki line. Analysis of recent Suzuki sales by Tri City, recent Yamaha sales by Cycle Springs, and older Suzuki sales by the former Holiday dealer discloses that Tri City would not likely lose Suzuki sales to Cycle Springs. Tri City sales will likely concentrate in north-central Pinellas County, and Cycle Springs sales will predominate in Pasco and north Pinellas counties. The availability of another Suzuki dealer for sales and service may increase Tri City's Suzuki sales as potential customers perceive competitive advantages in the pricing and availability of products and service. For the reasons set forth above, American Suzuki has proved that Suzuki is inadequately represented in the relevant market and that the establishment of Cycle Springs as a new Suzuki dealer is justified. There is no evidence that Tri City's investment in American Suzuki products is excessive. American Suzuki has not denied Tri City the opportunity for reasonable growth and market expansion. There is no evidence that the establishment of the new dealership would seriously jeopardize the investment in Suzuki products and equipment already made by Tri City. The availability of another Suzuki sales and service location may enhance sales and service for both dealers and will favorably impact consumers and the public interest.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the Department of Highway Safety and Motor Vehicles enter a final order dismissing the protest of Jones & Dabney, Inc. to the proposed establishment by American Suzuki Motor Corporation of a Suzuki dealership at Cycle Springs, Inc., 37182 US Rte. 19 North, Palm Harbor, Florida. ENTERED on May 19, 1993, in Tallahassee, Florida. ROBERT E. MEALE 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 on May 19, 1993. COPIES FURNISHED: 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 Dean Bunch Cabaniss, Burke & Wagner 851 East Park Ave. Tallahassee, Florida 32301 Philip L. Jones Jones & Dabney, Inc. 14996 US Rte. 19 North Clearwater, Florida 34624
Conclusions This matter came before the Department for entry of a Final Order upon submission of a Recommended Order of Dismissal by Lawrence P. Stevenson, Administrative Law Judge of the Division of Administrative Hearings. The Department hereby adopts the Recommended Order of Dismissal as its Final Order in this matter. Accordingly, it is hereby ORDERED that this case is CLOSED and a license may be issued to Wild Hogs Scooters and Motorsports, LLC to sell motorcycles manufactured by Kaitong Motorcycle Manufacture Co. Ltd. (KAIT) at 3311 West Lake Mary Boulevard, Lake Mary (Seminole County), Florida 32746, upon compliance with all applicable requirements of Section 320.27, Florida Statutes, and all applicable Department rules. Filed September 30, 2009 3:29 PM Division of Administrative Hearings. DONE AND ORDERED this of September, 2009, in Tallahassee, Leon County, Florida. Division of Motor Vehicles Department of Highway Safety and Motor Vehicles Neil Kirkman Building Tallahassee, Florida 32399 Filed with the Clerk of the Division of Motor Vehicles ""-.r.• u this 9Pfh day of September, 2009. Naiini .Dulllr71cenie Admlnlltrator NOTICE OF APPEAL RIGHTS Judicial review of this order may be had pursuant to section 120.68, Florida Statutes, in the District Court of Appeal for the First District, State of Florida, or in any other district court of appeal of this state in an appellate district where a party resides. In order to initiate such review, one copy of the notice of appeal must be filed with the Department and the other copy of the notice of appeal, together with the filing fee, must be filed with the court within thirty days of the filing date of this order as set out above, pursuant to Rules of Appellate Procedure. CAF/vlg Copies furnished: Leo Su Galaxy Powersports, LLC d/b/a JCL International, LLC 2667 Northhaven Road Dallas, Texas 75229 2 Jason Rupp Wild Hogs Scooters and Motorsports, LLC 8181 Via Bonita Street Sanford, Florida 32771 David Cattafi David Cattafi d/b/a Direct Capital Motors 4107 South Orlando Drive, Suite C Sanford, Florida 32773 Michael J. Alderman, Esquire Department of Highway Safety and Motor Vehicles Neil Kirkman Building 2900 Apalachee Parkway, Room A432 Tallahassee, Florida 32399 Lawrence P. Stevenson Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 Nalini Vinayak Dealer License Administrator Florida Administrative Law Reports Post Office Box 385 Gainesville, Florida 32602 3
Findings Of Fact American Isuzu is the licensed distributor of Isuzu motorcars and trucks in the United States. American Isuzu licenses franchise dealers to market Isuzu cars and trucks to the consuming public. Isuzu products are manufactured in Japan. American Isuzu began marketing Isuzu products in the United States in March, 1981. Isuzu products compete primarily with other compact imported cars and trucks such as Datsun, Toyota, Volkswagen and others. American Isuzu supports the application of Hollywood Isuzu for licensure to market Isuzu products in Hollywood, Florida. Isuzu of North Miami is owned by David Zinn. Isuzu of North Miami is currently under contract with American Isuzu and duly licensed to market Isuzu products at a location in northwestern Dade County, Florida. Zinn is a capable automobile dealer. He operates a successful Datsun dealership in Stuart, Florida, and a successful Toyota dealership in north Dade County, Florida. Zinn's was the first Toyota dealership in Florida. He has been involved in automobile sales for most of his life. His stature as a successful dealer has been recognized. At the time of the hearing, he was serving as Chairman-Elect of the Board for the American International Automotive Dealership Association, an organization which advances the interests of imported-automobile dealers. Zinn is fully qualified to operate an Isuzu dealership. Isuzu of North Miami is located on U.S. Highway 441 in northern Dade County. The facility is directly across the street from Zinn's Toyota dealership. He has constructed a complete sales and service facility in order to effectively market and service Isuzu automobiles. He has invested approximately $850,000 in the Isuzu dealership. At the time of the hearing, construction on the facility had not been entirely finished, but it was sufficiently completed so that sales and service functions were under way. Hollywood Isuzu is owned by George Nassief. Nassief has been involved in automobile sales for the past thirty years. He currently owns and operates three automobile dealerships in Ohio. He has won dealer awards from Ford, Pontiac, Toyota and Honda. Nassief has been interested in developing an automobile dealership in south Florida. American Isuzu has granted Hollywood Isuzu a franchise contract to operate an Isuzu dealership at 1321 North Sixtieth Avenue, Hollywood, Florida. Sixtieth Avenue is also known as U.S. Highway 441. The Isuzu of North Miami facility is less than five miles from the proposed Hollywood Isuzu location on the same roadway. In order to sell and service Isuzu products, Nassief proposes to construct a complete sales and service facility. He has already purchased land, hired an architect and begun preparation of the site. He plans to invest approximately $700,000 in the venture. Nassief is fully qualified to operate an Isuzu dealership. American Isuzu has developed marketing concepts or strategies to advance its entry into the American automotive market. For initial penetration, American Isuzu chose several market areas primarily in the western and southeastern United States. Florida is a well-recognized imported automobile market, and south Florida is the major Florida market. American Isuzu targeted south Florida as a primary zone for its initial efforts. Initial plans were to locate four dealerships in Broward County and three in Dade County. A decision was made to select dealers from individuals who had demonstrated themselves as successful dealers of other products. American Isuzu decided to establish average-sized dealerships rather than "size-of-market" dealers. Ultimately, American Isuzu desires to have each of its dealers be average in size. Voluntary trade restrictions that have been imposed upon automobiles imported from Japan have interfered somewhat with American Isuzu's initial plans. However, three Broward County and two Dade County dealerships have been established. One Broward dealership is located on U.S. Highway 441 in Plantation, Florida, approximately six miles north of the location proposed by Hollywood Isuzu. The other two Broward County Isuzu dealerships are located in the northern and central portions of the county, along U.S. Highway 1 in the City of Fort Lauderdale. These locations are to the east of the Plantation location, the proposed Hollywood location and Isuzu of North Miami. During the time that Zinn was negotiating with American Isuzu for an Isuzu franchise, he proposed to locate in western Broward County near the presently proposed Hollywood Isuzu location. The then District Manager of American Isuzu, Mr. Mike Bonamy, declined to approve that location, and instead insisted upon the north Miami location. Bonamy suggested that Zinn would be able to serve the west Hollywood market from the northern Dade County location. Zinn was led to believe that a Hollywood location would be approved, but that it would be located along U.S. Highway 1, rather than on the same highway as his dealership. Isuzu of North Miami does not oppose the creation of a fourth Isuzu dealership in Broward County, but rather opposes the location of it on U.S. Highway 441, rather than U.S. Highway 1. American Isuzu has not delineated specific market areas for its dealerships. American Isuzu is seeking to penetrate the broad south Florida market by the introduction of various dealerships. A primary source of customers within this area is located in the western portions of Broward and Dade Counties. Through existing dealerships, Isuzu has obtained a market penetration reflected as a percentage of total import sales which equals its penetration statewide in Florida. American Isuzu's entry into the American market would be facilitated by strongly penetrating certain market areas, then expanding from that base. American Isuzu has sought to accomplish this strategy by locating numerous dealers in south Florida. Despite the emphasis, American Isuzu has not penetrated south Florida more pervasively than it has the state, generally. American Isuzu is clearly capable of marketing additional automobiles in south Florida. In order to accomplish that in harmony with its policy of maintaining average-sized dealerships, it is necessary that American Isuzu establish an additional Broward County dealership. The western portion of Hollywood, where Hollywood Isuzu proposes to locate, is a logical choice for the additional dealership. Numerous clusters of dealerships have been established along U.S. Highway 441 in northern Dade County and western Broward County. In close proximity to Isuzu of North Miami, there are Toyota, Mazda and Volkswagen dealerships. In close proximity to the proposed Hollywood Isuzu location, there are Toyota, Honda and Datsun dealerships. In close proximity to the Plantation Isuzu dealership, there are Mazda, Toyota and Datsun dealerships. Such "clusters" of competing dealerships tend to stimulate sales. Location of an Isuzu dealership at the proposed Hollywood location should not operate to reduce sales on the part of Isuzu of North Miami. Rather, the dealership should aid Isuzu in further penetrating the Broward and Dade County markets. By increasing the visibility of Isuzu generally, the additional facility should also serve to stimulate Isuzu sales. While Isuzu of North Miami can offer Isuzu automobiles to potential customers in the west Hollywood area, it cannot stimulate such sales as well as a specific dealership in that location could. American Isuzu has charged that Isuzu of North Miami has not complied with certain provisions of its licensing agreement. These allegations are not supported by the evidence. Isuzu of North Miami originally proposed to appoint David Zinn's son Craig to manage the Isuzu of North Miami facility. Craig Zinn has, however, decided to pursue another opportunity. It does not appear that the absence of Craig Zinn from the Isuzu of North Miami picture renders Isuzu of North Miami unable to adequately sell and service Isuzu automobiles. Indeed, it appears that Isuzu of North Miami has personnel who are fully capable of operating a successful dealership. American Isuzu has alleged that Isuzu of North Miami does not have a sufficient number of trained service personnel and has not purchased sufficient tools. These allegations are not sustained by the evidence. It does appear that Isuzu of North Miami has at least two trained and qualified Isuzu mechanics and has purchased tools with which it can properly service Isuzu automobiles.
