A New York GMC dealer has filed a $15 million lawsuit against General Motors, alleging that GM restricted the dealership’s inventory and then evaluated the store under sales performance standards the dealer could not reasonably meet.
According to published reports, Sun GMC, Inc. in Wantagh, New York, filed the lawsuit in federal court on June 3. The dealership alleges that GM supplied too few vehicles, provided an unfavorable mix of vehicles, and used performance metrics that penalized the dealership for sales results caused by GM’s own allocation decisions.
The lawsuit centers on a familiar dealer concern: a manufacturer should not control the number and mix of vehicles a dealer receives and then fault the dealer for failing to hit sales objectives that require more inventory. Sun GMC reportedly claims that GM expected the dealership to sell more than 1,000 vehicles in 2025 but invoiced only about half that amount. The dealership also alleges that it received fewer than 20 vehicles per month on average over the last six months.
Sun GMC further claims that GM’s allocation system favors certain dealers through a tiered allocation process and a discretionary allocation pool. The dealership alleges that these practices left it with empty lots, reduced sales opportunities, and lower performance scores. The lawsuit asks the court to require GM to provide adequate inventory, declare GM’s allocation practices unfair and discriminatory, and award at least $15 million in damages.
GM has not yet publicly responded in detail to the allegations. As with any lawsuit, the claims remain allegations unless and until a court makes findings or the parties resolve the dispute.
Although the lawsuit was filed in New York, the dispute raises issues that Minnesota law addresses directly. Minnesota’s motor vehicle franchise law prohibits a manufacturer, distributor, or factory branch from delaying, refusing, or failing to deliver new vehicles in a reasonable time and reasonable quantity, relative to the dealer’s facilities and sales potential in the dealer’s relevant market area, after accepting an order, unless the failure results from causes beyond the manufacturer’s control. Minnesota law also makes it an unfair practice for a manufacturer to refuse, upon request from a same-line dealer, to disclose the manner and mode of distribution of that line make within the relevant market area.
Minnesota law also protects dealers from unfair performance standards. A manufacturer may not require a dealer, by program, incentive provision, or otherwise, to follow performance standards that are not applied uniformly to similarly situated dealers. Any performance standard, sales objective, or dealership performance program that may materially affect a dealer must be fair, reasonable, equitable, and based on accurate information. The manufacturer bears the burden of proving that the standard, objective, or program is fair, reasonable, and uniformly applied.
Those protections matter because allocation and performance standards often work together. A dealer’s sales effectiveness score, incentive eligibility, facility expectations, or market performance review can depend heavily on whether the manufacturer provides enough vehicles, the right vehicle mix, and a fair opportunity to compete. If the manufacturer controls the supply side of the equation, the dealer should carefully scrutinize any performance criticism tied to sales volume.
Minnesota law gives dealers important tools, but those tools work best when the dealer has a clear record showing what vehicles it requested, what it received, how the manufacturer treated similarly situated dealers, and how the manufacturer used those facts in performance evaluations.
MADA will continue to monitor manufacturer allocation disputes and other franchise issues that may affect Minnesota dealers.
