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TORONTO, Ontario — A Mazda store in Orangeville, Ontario, charged last month with conducting unfair business practices has been cut off by the automaker and had its dealer license frozen by the Ontario Motor Vehicle Industry Council.

OMVIC levied charges of "engaging in unfair practice by making an unconscionable representation" against Mazda of Orangeville and two of its salesmen, Kien Trung and Mohammed Shaikh, after the council investigated accusations that the store sold a used vehicle to a woman in December at a price much higher than what the MSRP would have been on a new version of the same make and model. 

OMVIC enacted the "trade freeze" on May 13 after finding out that Mazda Canada had cut the store's franchise rights, an OMVIC spokesperson indicated to Auto Remarketing Canada. 

"It allows us to go in and determine what's happening with ownership," explained Brenda McIntyre, communications coordinator for the council, who added: "We understand they are winding down operations right now."  

Mazda Canada revoked the store's franchise rights for not abiding by the automaker's business practices' standards. However, it wasn't simply this one incident that led the automaker to cut the dealership.

The company had conducted its own internal investigation and audit upon learning of OMVIC's charges.

Based on what Mazda Canada found through this process, it decided that there several instances where the store "was not adhering to business standards as outlined in our dealer sales and service agreement," Greg Young, Mazda Canada's director of corporate public relations, explained to Auto Remarketing Canada.

Public response to Mazda Canada's decision has been "by far and away, very supportive of our action," but Young said he realizes that having the city lose its Mazda store is a big inconvenience to customers in the area, who now have to come up with other options to have their vehicles serviced.

"Hopefully, we'll have a new dealership in the area shortly," he noted.

Mazda Canada is taking a wait-and-see approach in that regard, as Young said that it is his understanding that store owner Sunny Baines — who owns both the building and property on which the dealership is located — is trying to sell the land and building.

In an ideal situation, whomever buys the land and building — and passes a thorough due diligence — could be a good option to fill the void.

"It's an important market for us and we'll look to be back in operation there as soon as possible," Young stated.

UCDA Responds

Mazda of Orangeville was — and still is — a member of the Used Car Dealers Association of Ontario, the association's executive director Bob Beattie told Auto Remarketing Canada.

UCDA can't and won't take any action until due process of the law is completed, but should the store be found guilty, it would be kicked out of the organization.

"There's nothing we can do until there is a court case," Beattie shared. "If found guilty, they would not have had adhered to our code of ethics."

Regardless of what happens in the court, Beattie said the future of dealership isn't bright. The damage has already been done in community

"Even if it turns out that some of the allegations were wrong, I don't think it would matter (to consumers) … not with the press that they've had," he commented.

What Mazda of Orangeville has been accused of is extremely rare and unconscionable among dealers, Beattie said. But unfortunately, an instance like this — albeit unique — perpetuates a perhaps unfair stereotype of dealers.

"None of us have ever heard of an instance of a sale of a vehicle being dealt with in this way," Beattie said.

"The unfortunate thing for the dealer community is the way the average consumer would view this," he added. "The average car dealer doesn't rise to the top of the chain … they're down there with the politicians and this is not going to help."

And these accusations, he said, have gotten so much attention because they are "unique."

"It's unfortunate, it's terrible, it's unbelievable," Beattie shared. 

"There's nothing good that can come out of it … a warning, maybe, to a dealer who doesn't subscribe to good practices," said Beattie. However, he pointed out that "I don't think that any dealer needs any suggestion … I think it would be almost improper for anyone to suggest to a dealer what they should take from this; it's obvious. Dealers already understand that."