DMV Announces Settlement With Chrysler Corp.

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FOR IMMEDIATE RELEASE
November 18, 2011

Automaker will pay state $955,000 for unlawful operation

Sacramento — Chrysler Corp. has agreed to pay $955,000 to the California Department of Motor Vehicles (DMV) to settle allegations of unlawfully operating a car dealership within the 10-mile market area of independently-owned franchises, the DMV announced today.

In September 2011, the DMV filed an administrative action against Chrysler's occupational licenses and, as part of the administrative settlement, Chrysler agreed to pay the DMV $750,000 in monetary penalties and fines; $160,000 in reimbursements of investigation and legal fees, and up to $45,000 for post-settlement audits.

Background
On May 26, 2011, the New Motor Vehicle Board (NMVB), acting on a petition filed by the California New Car Dealers Association (CNCDA), requested that the DMV investigate whether Chrysler Group LLC committed violations of law in owning La Brea Avenue Motors, Inc. dba La Brea Chrysler Jeep, which was renamed Motor Village LA and relocated to downtown Los Angeles.

The law prohibits a manufacturer from owning a dealership and competing in the sale of vehicles of the same line and make with independently-owned franchisees within a 10-mile relevant market area. There are two major exceptions for manufacturers that own a dealership for less than one year and for situations where there is a reasonable plan to buy out the manufacturer's interest.

In addition to the monetary penalties, fines, and reimbursement, Chrysler has also agreed to sell the Motor Village LA dealership and to a probationary period of three years.

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