Virginia Code 46.2-1570: Discontinuation of distributors
A. If the contract between a distributor and a manufacturer or importer is terminated or otherwise discontinued, all franchises granted to motor vehicle dealers in Virginia by that distributor shall continue in full force and shall not be affected by the discontinuance, except that the manufacturer, factory branch, distributor, representative, or other person who undertakes to distribute motor vehicles of the same line-make or the same motor vehicles of a renamed line-make shall be substituted for the discontinued distributor under the existing motor vehicle dealer franchises and those franchises shall be modified accordingly.
Terms Used In Virginia Code 46.2-1570
- Contract: A legal written agreement that becomes binding when signed.
- Distributor: means a person who is licensed by the Department under this chapter and who sells or distributes new motor vehicles or new trailers pursuant to a written agreement with the manufacturer to franchised motor vehicle dealers in the Commonwealth. See Virginia Code 46.2-1500
- Factory branch: means a branch office maintained by a person for the sale of motor vehicles to distributors or for the sale of motor vehicles to motor vehicle dealers, or for directing or supervising, in whole or in part, its representatives in the Commonwealth. See Virginia Code 46.2-1500
- Franchise: includes any severable part or parts of a franchise agreement which separately provides for selling and servicing different line-makes of the franchisor. See Virginia Code 46.2-1500
- Line-make: means the name of the motor vehicle manufacturer or distributor and a brand or name plate marketed by the manufacturer or distributor. See Virginia Code 46.2-1500
- Manufacturer: means a person who is licensed by the Department under this chapter and engaged in the business of constructing or assembling new motor vehicles or new trailers and, in the case of trucks, recreational vehicles, and motor homes, also means a person engaged in the business of manufacturing engines, transmissions, power trains, or rear axles, when such engines, transmissions, power trains, or rear axles are not warranted by the final manufacturer or assembler of the truck, recreational vehicle, or motor home. See Virginia Code 46.2-1500
- Person: includes any individual, corporation, partnership, association, cooperative, limited liability company, trust, joint venture, government, political subdivision, or any other legal or commercial entity and any successor, representative, agent, agency, or instrumentality thereof. See Virginia Code 1-230
- Vehicle: means every device in, on or by which any person or property is or may be transported or drawn on a highway, except personal delivery devices and devices moved by human power or used exclusively on stationary rails or tracks. See Virginia Code 46.2-100
B. If a manufacturer or factory branch (i)(a) discontinues its right to manufacture a line-make of motor vehicles or (b) sells or otherwise transfers its right to manufacture a line-make of motor vehicles to another manufacturer or factory branch that will manufacture motor vehicles of the same line-make and (ii) the acquiring manufacturer or factory branch does not honor the existing franchise agreements of motor vehicle dealers in Virginia of the same line-make, such discontinuation, sale, or transfer shall constitute a termination of the franchise pursuant to subdivisions 5b and 5c of § 46.2-1569 and such motor vehicle dealers shall be entitled to compensation pursuant to those subdivisions.
1988, c. 865, § 46.1-550.5:29; 1989, c. 727; 2019, cc. 77, 738.