HMA Withdraws Product Shipment Addendum

In another example of the positive impact of dealer push-back, Hyundai Motor America has agreed to withdraw the Product Shipment Addendum recently sent to, and entered into by, a number of dealers.  Among other egregious provisions, the Product Shipment Addendum required dealers to accept the risk of damage/loss of a new vehicle upon the vehicle leaving the port of entry for delivery to the dealership.  This is a dramatic departure from an OEM’s historic responsibility to hold the risk of damage/loss until delivery to the dealership.  Of course, damage or loss in transport is not something the dealership can control as the OEM is in complete control of the transport and delivery.

HMA previously sent dealers a series of Addenda which included not only the Product Shipment Addendum but, depending on the dealership, an ownership and management change addendum and facility addendum.  All of the Addenda included material and adverse changes to the provisions in the HMA Dealer Sales and Service Agreement.  Dealers were told they had no choice but to sign the Addenda. 

State and Metro Dealer Associations along with NADA all strongly objected to the coercive nature of the Addenda.  HMA’s withdrawal of the Product Shipment Addendum is a good start but HMA should be withdrawing all of the Addenda which gives dealers no choice to negotiate the terms or choose to forego agreeing to them altogether.