MADA will stand on the front lines — but we’ll need every Mississippi dealer engaged, informed and ready.
A recent move by the Alliance for Automotive Innovation, representing most major automakers, has raised serious concerns for franchised new car dealers across the country. You may have seen the July 16, 2025, Automotive News article titled “Alliance, NADA Clash in ‘Holy War’ Over State Franchise Laws in Justice Department Review.”
The Alliance, which represents nearly every major original equipment manufacturer (OEM), submitted a letter to the U.S. Department of Justice’s (DOJ) Anticompetitive Regulations Task Force challenging the very foundation of the dealer franchise system. The National Automobile Dealers Association (NADA) was blindsided by the Alliance, as our national organization was not given the courtesy of a conversation or notice that the letter was being sent.
What Did the Alliance Say?
In their letter, the Alliance claimed that many state-level franchise laws — including those that secure fair warranty reimbursement, protect against the forced addition of new dealers and uphold dealer territory agreements — are outdated, anti-competitive and harmful to consumers. Here’s a direct quote from the letter:
“Virtually every state has enacted a series of motor vehicle franchise laws that regulate nearly every aspect of the relationship between motor vehicle manufacturers and their authorized dealers. While the stated purpose of these statutes is to protect consumers, many of these statutes also significantly restrict competition in this industry and can actually harm the consumers they purport to protect.”
This action by the Alliance should be alarming to every dealer.
Working Together — Until Now
Historically, while the missions of the Alliance, NADA and state dealer associations like MADA don’t always align, there has been collaboration on issues impacting consumers, dealers and manufacturers alike. In Mississippi, the Alliance has been involved in the legislative process. In fact, every recent major change to our state’s franchise law — ranging from warranty reimbursement improvements to bans on manufacturer-owned dealerships — has become law with the Alliance’s approval.
The Alliance circulated the DOJ letter among OEMs before submitting it and seeking their approval. That’s why the DOJ letter is so troubling. And as of this writing, not a single OEM has disavowed the Alliance’s attack on franchise laws.
What Can Dealers Do?
Franchised dealers need to stay vigilant in Washington and with state-elected officials.
What’s at Stake?
- A Fight at the Federal Level: If the DOJ agrees with the Alliance’s position, it could pave the way for federal preemption of state franchise laws, weakening protections that Mississippi dealers have fought hard to secure.
- Undermining State Policy: Mississippi’s dealer network is deeply important to local economies and the communities we serve. Federal interference could erode the foundation that has been laid over generations and harm the local auto retail system.
Final Thought
This moment is a clear reminder of why it is vital that franchised dealers remain active in the political process — both in Washington and in Jackson. Mississippians have always been best served by franchised dealerships that provide not only value to consumers but also deep economic and social investment in our towns and communities.
If the DOJ and Congress take the side of the OEMs, we’re looking at a fight of monumental proportions. MADA will stand on the front lines — but we’ll need every Mississippi dealer engaged, informed and ready.
