Gene knew it was time to have his Mercedes-Benz CLK430 convertible serviced. His car’s computer had told him so. Gene, a Reno resident who asked that his last name not be used, called what he thought was his local Mercedes dealer, Streeter Imports in Reno, and set up an appointment. The day before the appointment, the car dealership called him back.
“They said, ‘By the way, we can’t service your car under warranty,’” Gene complained. “Now I have to try and make another appointment with a dealer in Sacramento.”
It’s been about two years since Mercedes-Benz discontinued Streeter Import’s franchise, citing “unethical and unlawful conduct” at the Reno dealership. The decision was appealed several times until, most recently, a district court in Carson City upheld a decision issued in June by the Department of Motor Vehicles.
What wrongs had Streeter committed that led to these decisions?
The 38-page DMV decision tells the story of a dealership that broke the rules established by Mercedes-Benz. When Mercedes began offering light-truck models a few years ago, Streeter was required to make some changes before being allowed to sell these vehicles. But the Reno dealership let Mercedes representatives know that it would not make any changes to its facilities, even though Mercedes had deemed the facilities “inadequate.”
In fact, according to Mercedes’ Ownership Experience Survey scores, “customers perceived the same inadequacies,” the DMV decision stated. “A portion of the responsibility for these low scores rested with the customers’ reported dissatisfaction with [Streeter’s] service department. Another portion came from the customers’ reported dissatisfaction with the appearance of [Streeter’s] facilities.”
Mercedes-Benz was a subordinate franchise for Streeter, which did most of its business—80 percent—as a Nissan franchise. Owner Fred Streeter attended few Mercedes-Benz dealer meetings and none of the company’s training sessions, the decision reported.
That’s why Mercedes decided that Streeter wouldn’t be allowed to sell the new light trucks or sports utility vehicles, called M-class vehicles. But that corporate directive didn’t stop Streeter from obtaining these M-class vehicles from other dealerships and selling them to an unsuspecting public.
“[Streeter] resold these new M-class vehicles to customers starting in the summer of 1999,” the DMV decision stated. “This scheme was hatched and executed without [Mercedes’] consent or knowledge.”
Though the sales were reported as sales of “used” vehicles, Streeter often represented the vehicles as new to customers.
“Through its media and on-premises advertising, [Streeter] lured customers to visit, examine and purchase what appeared to be new M-class vehicles.”
Some customers assumed they were getting new trucks and, in some cases, Streeter sales reps did little to make the customer aware of the vehicles’ status. The prices paid for the “used” vehicles were in line with the prices of new vehicles, and some were even in excess of the manufacturer’s suggested retail prices, the DMV decision said.
Since Streeter wasn’t authorized to sell the trucks, it also wasn’t authorized to perform service under warranty.
Fred Streeter acknowledged last week that the Mercedes sign had come down at his Reno dealership, but he had no further comment regarding the loss of his Mercedes franchise or the court’s decision.
Last week, though, an ad in the Reno Gazette-Journal touted Streeter Imports as a “Luxury Car Center—specializing in the sales and service of Mercedes-Benz.” The ad listed 21 used Mercedes, from sedans to sports utilities, for sale. On the same day, Mercedes-Benz USA also ran an RGJ ad to let folks know that “Streeter Imports of Reno is no longer an authorized Mercedes-Benz passenger car dealer.” The ad listed the names of authorized Mercedes dealers—in Sacramento and Rocklin, Calif.
The lack of an authorized dealer in Reno peeves Mercedes-Benz owners like Gene. “They probably have a lot of unhappy customers,” Gene said.