BMW has gone to war with dealers in Texas over whether the X5 should be sold as a car or a light truck.
BMW in the United States has been told its X5 is a car, not a light truck, and the German manufacturer may not create a separate franchise for the vehicle.
BMW had instructed its dealers to sign a separate truck franchise to sell the vehicle as it had decided to market the X5 as a light truck, the equivalent of a bakkie in South Africa.
But the Motor Vehicle Board of the Texas Department of Transportation ruled that the X5 is a car and dealers need not create a separate franchise for the vehicle.
BMW is keen to capitalise on the SUV boom in the United States and will be increasing the range with the X3 and X7 in the near future. It is likely the German company wanted to create separate showrooms for its SUVs.
But dealers in Texas took the matter to court as they felt it discriminated against them.
Autobahn Imports, a Fort Worth dealership, said a separate X5 franchise violated Texas law because the state requires manufacturers to give dealers every model within a franchise’s lineup.
A Texas administrative law judge in June, however, declared the X5 a light truck, but the decision has been over ruled by the Motor Vehicle Board of the Texas Department of Transportation.
“The X5 is not marketed as a utility vehicle for commercial or industrial uses,” the board wrote in its decision. “It is advertised as a luxury automobile that can be used for many more recreational activities than a conventional luxury vehicle.”
BMW is not accepting defeat though and intends to appeal. It maintains that its traditional dealer agreement applies only to cars.
“The decision is contrary to Texas law and longstanding policies of the Texas Motor Vehicle Division. We will work to reverse the decision, and we are confident we will succeed,” the company said in a prepared statement.
