by The Essence of the Lawsuit Against Porsche
Porsche must appear in court in the United States in March of next year due to a $300 million lawsuit filed by a major luxury car dealer in Florida. The case, initiated by The Collection in 2022, alleges that the German manufacturer pressured the dealer to build a separate showroom for Porsche, and when it refused, began limiting its supply of cars.
Porsche’s Post-Pandemic Strategy
Reportedly, in the years following the Covid-19 pandemic, Porsche sought to gain greater control over its American dealer network, urging dealers to build exclusive facilities dedicated solely to its brand.
Changes in the Luxury Car Market
When The Collection first took legal action, the luxury car market landscape was in a state of flux. The chip shortage had just subsided, leaving manufacturers like Porsche in a seller’s market. Demand exceeded supply, and cars were often sold before they even hit the showroom. Prices rose, and buyers paid premiums.
As reported, analysts called this change the “Ferrarification of Porsche,” describing the brand’s transition to scarcity and higher prices.
Porsche, coming out of Covid, raised prices very aggressively, and they just kept raising prices on everything, said independent luxury car analyst Scott Sherwood. If you want to build loyalty and repeat customers, that’s not how it’s done.
Porsche’s price increases were not solely due to high demand. Dealers set their own figures, and the same model could vary significantly in cost depending on the markup. By 2022, Porsche seemed to want to bring order to this chaos by strengthening control through branded showrooms.
Conflict Between Dealer and Manufacturer
Against this backdrop, The Collection, which also represents brands such as Ferrari and Aston Martin, claims that Porsche urged it to invest tens of millions in a new facility for Porsche models in the Miami area, but the dealer refused, calling the proposed locations “remote, suburban locations” with “relatively zero market for Porsche.”
The dealer believes that Porsche violated Florida’s franchise dealer laws and caused The Collection’s sales to enter a “death spiral.” Porsche denies this, stating that the dealer “knowingly chose not to invest in a new exclusive Porsche facility, despite declining sales of new Porsche brand vehicles for nearly a decade.”
Porsche AG’s parent company has repeatedly tried to exclude itself from the case as a foreign entity, but a judge in Miami recently rejected these requests.
This lawsuit concerns the relationships between dealers, their distributors, and manufacturers, certainly throughout Florida, but since much of America has similar regulatory issues, the lawsuit concerns the industry across the country, said Burstyn Law founder Sean Burstyn, who represents The Collection.
Implications for Car Supply
The Collection also claims that after it refused Porsche’s request for a separate showroom, the manufacturer began withholding vehicle allocations from the pool. These vehicles, distributed at Porsche’s discretion, can account for up to 20 percent of a dealer’s total supply.
This lawsuit could have significant implications for dealer networks across America, as it highlights the tension between manufacturers seeking greater control over brand representation and dealers fighting for autonomy and profitability in a changing market environment. The outcome could set a precedent for similar conflicts in the future, especially as manufacturers shift towards more exclusive sales models in response to changes in demand and supply chains.
