95-003852 Kawasaki Motors Corporation, U.S.A., And Richard Weber Real Estate Investment Company, Inc., D/B/A Orlando Yamaha Kawasaki vs. Cycle Sports Center, Inc., And J. P. Cycles, Inc., D/B/A Seminole Powersports Status: Closed Recommended Order on Friday, January 5, 1996.

Summary: Proposed dealership should be established because information shows inadequate representation in relevant community/territory.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

KAWASAKI MOTORS CORP., U.S.A. )

and RICHARD WEBER REAL ESTATE )

INVESTMENT CO., INC. d/b/a )

ORLANDO YAMAHA KAWASAKI, )

)

Petitioners, )

)

vs. ) CASE NO. 95-3852

)

CYCLE SPORTS CENTER, INC., )

AND J.P. CYCLES, INC., d/b/a )

SEMINOLE POWERSPORTS, )

)

Respondents. )

_______________________________)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly

designated hearing officer, Daniel Manry, held a formal hearing in this case on

November 9, 1995, in Tallahassee, Florida.

APPEARANCES

For Petitioner: Dean Bunch, Esquire

Kawasaki Motors Corp., Cabaniss & Burke, P.A.

U.S.A. 909 East Park Avenue

Tallahassee, Florida 32301

For Petitioner: Richard Weber, President

Richard Weber Real 9334 East Colonial Drive

Estate Investment Co. Orlando, Florida 32817

d/b/a Orlando Yamaha

Kawasaki

For Respondents: Lon Wagner, Qualified Representative

Cycle Sports Center 3812 Heatherington Road

Inc., and J. P. Cycles, Orlando, Florida 32808

Inc., d/b/a Seminole

Powersports

STATEMENT OF THE ISSUE

The issue for determination in this proceeding is whether Kawasaki Motors

Corp., U.S.A. ("Kawasaki") should establish a new dealership doing business as

Orlando Yamaha Kawasaki ("OYK").

PRELIMINARY STATEMENT

Respondents filed their protest in this matter on July 17, 1995, and timely

requested a formal hearing. At the formal hearing Kawasaki called Mr. Jim

Capps, its Regional Sales Manager, as its only witness. Kawasaki submitted 23

exhibits for admission in evidence. Petitioner, OYK, called no witnesses and

submitted no exhibits for admission in evidence.

Respondents called Mr. Mark Schmidt, owner of J.P. Cycles, Inc., d/b/a

Seminole Power Sports ("Seminole Power Sports"), and Mr. Thomas Wagner, owner of

Cycle Sports Center, Inc. ("Cycle Sports"), as their only witnesses.

Respondents submitted 12 exhibits for admission in evidence.

The identity of the exhibits and the rulings thereon are described in the

record of the formal hearing. None of the parties requested a transcript of the

formal hearing.

Kawasaki and Respondents timely filed their proposed recommended orders

("PROs") on November 27, 1995. OYK did not file a PRO. Proposed findings of

fact in Kawasaki's PRO are accepted in this Recommended Order. Proposed

findings of fact in Respondents' PRO are addressed in the Appendix to this

Recommended Order.

FINDINGS OF FACT

1. Cycle Sports is an existing Kawasaki dealer in Orange County, Florida

("Orange County"). It is located at 4001 John Young Parkway, in west Orlando,

Florida ("Orlando"), north of West Colonial Drive.

2. Seminole Powersports is an existing Kawasaki dealer in Seminole County,

Florida ("Seminole County"). It is located at 3401 North Highway 17-92, in

Longwood, Florida.

3. OYK is an existing dealer for Yamaha motorcycles. It is located in

east Orlando, at 9334 East Colonial Drive.

4. Kawasaki is an importer of motorcycles. It proposes to establish an

additional Kawasaki dealership at the present location of OYK (the "proposed

dealership"). The two dealerships operated by Respondents are each located

within 12.5 air miles of the proposed dealership.

5. Orange County has a population in excess of 300,000. On April 1, 1994,

the population of Orange County was 740,167.

1. Community or Territory

6. The term "community or territory" is not defined in Section 320.642,

Florida Statutes. 1/ The relevant community or territory to be considered in

determining whether the proposed dealership should be established is a question

of fact. 2/

7. Each dealer's primary area of responsibility is entitled to great

weight in determining the relevant community or territory. 3/ The dealer

agreements between Respondents and Kawasaki define each dealer's primary area of

responsibility as the area lying within a circle centered at each dealership,

with each circle having a radius of five miles.

8. The proposed dealership is not located in the primary area of

responsibility of either dealer. Cycle Sports is located approximately 10 miles

from the proposed dealership. Seminole Sports is located approximately 11.5

miles from the proposed dealership.

9. Buying patterns of Yamaha motorcycle purchasers at the proposed

dealership and those of Kawasaki motorcycle purchasers at Respondents'

dealerships provide a reasonable basis for determining the relevant community or

territory to be served by the proposed dealership. No Kawasaki sales records

are available for the proposed dealership. It is not yet a Kawasaki dealer.

10. The majority of Kawasaki motorcycle sales in 1994 made by Cycle Sports

were made to customers in Orange County. Sales were concentrated in the west

Orange County near the selling dealer.

11. The majority of Kawasaki motorcycle sales in 1994 made by Seminole

Powersports were made to customers in Seminole County. Although Seminole

Powersports made some sales to customers in Orange County, those sales comprised

a small portion of the total sales made by Seminole Powersports.

12. The majority of Yamaha sales in 1994 made by OYK were made to

customers residing in Orange County. Sales were concentrated in east Orange

County near OYK.

13. Based on consumer behavior, Orange County is the appropriate community

or territory to be considered in determining whether the proposed dealership

should be established. Respondents presented no credible and persuasive

evidence to support an alternative definition of the relevant community or

territory.

2. Adequacy Of Representation

14. Respondents do not adequately represent Kawasaki in the relevant

community or territory for purposes of Section 320.642. Adequacy of

representation is determined by considering relevant factors in Section 320.642.

2.1 Market Penetration

15. Market penetration, or market share, is the percentage of Kawasaki

products sold compared to the total products sold in the industry, regardless of

the selling dealer. Sales are determined on the basis of registration and other

sales information compiled by R. L. Polk and Co.("Polk") and the Motorcycle

Industry Council ("MIC").

2.1(a) Types Of Vehicles And Data

16. Polk data is used for years prior to January, 1994. Since then, sales

are measured by the information compiled by MIC.

17. Polk data includes on-highway motorcycles. On-highway motorcycles are

those registered in each state for use on highways. Most all terrain vehicles

("ATVs") are not registered in the State of Florida. Registrations of ATVs in

the Polk data are not useful in determining Kawasaki's market penetration.

18. Polk data includes registrations of motor scooters registered for

street use. Kawasaki does not compete in the motor scooter market.

19. Consideration of ATVs and motor scooters is not appropriate to

determine the adequacy of performance by Kawasaki dealers. Only registrations

of on-highway, two-wheel motorcycles in the Polk data are properly considered in

determining adequacy of performance.

20. MIC data includes sales of all vehicles sold by the major motorcycle

brands, regardless of whether the vehicles are registered for street use. MIC

data reflects all sales and is not limited to only those vehicles registered in

each state.

2.1(b) Inappropriate Standards

21. National and state averages are not appropriate standards for

measuring the adequacy of representation in Orange County. National and state

averages include dealers that provide inadequate representation.

22. The state average for Florida includes Pinellas County. In 1994,

Kawasaki achieved only 7.42 percent of the on-highway market in Pinellas County

compared to the Florida average of 15.23 percent. Kawasaki is "outdealered" by

its closest competitors in Pinellas County.

23. Osceola County is just south of Orange County. Kawasaki has no

dealers in Osceola County. Yamaha and Suzuki have dealers in Osceola County.

In 1994, Kawasaki achieved only 6.25 percent of the on-highway motorcycle market

in Osceola County.

2.1(c) Appropriate Standard: Duval County

24. Duval County, Florida ("Duval County"), represents a reasonably

achievable standard for evaluating Kawasaki's performance in Orange County.

When Kawasaki had an equal number of dealers in Duval and Orange counties as its

major competitors, Kawasaki achieved equivalent market penetration in both

counties.

25. In Duval County, Kawasaki has two dealerships. During a part of 1988,

all of 1989, and a part of 1990, Kawasaki had an two dealerships in Orange

County. The second dealership was approximately three miles closer to Cycle

Sports than the proposed dealership.

26. In 1989, Kawasaki's market penetration in Duval County was 27.48

percent, and its market penetration in Orange County was 30.56 percent. In

1994, Kawasaki also achieved a 27.48 percent market share of on-highway

motorcycles in Duval County.

2.2 Duval County Comparisons

27. In 1994, Kawasaki achieved a market penetration of 27.48 percent of

on-highway motorcycles in Duval County. Kawasaki's market share of dual-purpose

motorcycles was 47.05 percent. Its market share of off-road motorcycles was

21.84 percent. Its market share of other vehicles was 24.70 percent.

28. These percentages indicate the reasonably expected level of

penetration for the four segments in which Kawasaki competes ("expected sales").

Applying them to total industry registrations available in Orange County in

1994, Kawasaki achieved only 56 percent of its expected sales. Kawasaki lost

108 sales in Orange County from the reasonably expected penetration measured by

the Duval County standard.

29. The majority of lost sales were sales of on-highway and dual purpose

motorcycles. In 1994, 91 lost sales came from these street-legal segments.

Thus, on-highway sales comprise 84 percent of total lost sales.

30. In 1994, Kawasaki sold 27.48 percent of on-highway motorcycles in

Duval County. The same year Kawasaki sold only 11.69 percent of on-highway

motorcycles in Orange County. Kawasaki's market penetration in Orange County

was only 42.5 percent of that in Duval County. For the first six months of

1995, the efficiency of Orange County compared to Duval County was only 35.2

percent, i.e., 9.84 percent in Orange County compared to 27.98 percent in Duval

County.

31. In 1994, Kawasaki sold 47.05 percent of dual-purpose motorcycles in

Duval County but only 22.6 percent of the same segment in Orange County. That

is an efficiency rating of only 48 percent.

32. In 1994, Kawasaki achieved an efficiency of 67 percent in the off-road

category, i.e., 14.7 percent in Orange County compared to 21.84 percent in Duval

County. In ATVs Kawasaki's Orange County performance achieved 82 percent of the

penetration in Duval County, i.e., 22.60 percent in Orange County and 27.48

percent in Duval County.

2.3 Comparisons To National and State Averages

33. As previously found, national and state averages are not appropriate

standards for determining adequacy of representation. Those averages contain

dealers that inadequately represent Kawasaki. Nevertheless, Kawasaki's

representation in Orange County fell short of those standards in 1994 and 1995.

34. The on-highway segment accounts for most of the units sold in the

United States and in Florida. In that segment, Orange County performed poorly

in comparison to national and state averages.

35. In 1994, Kawasaki's market penetration in Orange County achieved only

77 percent of the Florida average, i.e., 11.69 percent compared to 15.23

percent. It achieved only 85 percent of the national average, i.e., 11.69

percent compared to 13.80 percent.

36. For the first six months of 1995, Kawasaki did worse in Orange County.

It achieved only 59 percent of the Florida average, i.e., 9.84 percent compared

to 16.54 percent, and 62 percent of the national average, i.e., 9.84 percent

compared to 15.93 percent.

37. In the first six months of 1995, Kawasaki's penetration in the on-

highway segment in Orange County was down almost two percentage points, from

11.69 percent to 9.84 percent. The state and national averages were both up

from 15.23 percent to 16.54 percent in Florida and from 13.80 percent to 15.93

percent nationally.

38. The lower penetration in Orange County at a time when state and

national averages are up is the lowest efficiency for Orange County since 1987.

1987 was the year before a second Orange County Kawasaki dealership was

established from 1988 through 1990.

39. The only year in which a second Kawasaki dealer was in business in

Orange County for the entire year was 1989. Kawasaki's market penetration in

Orange County in 1989 was approximately twice its market penetration during 1994

and the first six months of 1995. In 1989, for example, Orange County achieved

30.56 percent of on-highway motorcycle registrations, or 141 percent of the

Florida average of 21.75 percent and 160 percent of the national average of

19.13 percent.

i-County Comparison

40. If Orange, Seminole, and Osceola counties are used as the relevant

community or territory, the performance of Kawasaki differs little from the

market penetration in Orange County alone. In the on-highway segment,

Kawasaki's market share for the three-county area in 1994 was 81 percent of the

state average and 90 percent of the national average. For the first six months

in 1995, however, Kawasaki's market penetration in Orange County dropped to 58

and 60 percent of the state and national averages, respectively.

2.5 Likely Cause

41. The motorcycle market in Orange County has increased consistently

since 1991. In 1991, total on-highway motorcycle registrations were 431. In

1992 they were 502. In 1993, they were 623. In 1994, they were 650.

Registrations increased 50.8 percent from 1991-1994.

42. The likely cause of Kawasaki's inadequate representation in Orange

County is the inability of a single dealer to keep up with such growth.

Kawasaki sales in Orange County fell after Kawasaki was left with only one

dealer in Orange County in 1991.

43. Orange County has a population of more than twice that of Seminole

County. Orange County is projected to continue its population growth through

2020.

44. Orange County has become too large for one Kawasaki dealer to serve.

The addition of a Kawasaki dealership in east Orlando is justified by growth in

the motorcycle market and by population growth generally.

2.6 Inter-brand Comparisons

45. Kawasaki suffers inadequate representation when inter-brand

competition is considered. Kawasaki enjoys relatively equal dealer

representation with its major competitors in Duval County. In Orange County,

however, Kawasaki has only one dealer compared to two dealers for Yamaha and

Suzuki.

46. There is ample opportunity for two Kawasaki dealers to share the

Orange County market. Even with two dealers in Orange County, Kawasaki will

have only as many dealers as do two of its major competitors.

2.6(a) Sales Patterns

47. Yamaha has two dealerships in Orange County. Yamaha enjoys superior

sales in east Orlando where OYK is located. The adverse affect of distance on

Respondents' ability to adequately represent Kawasaki in Orange County is

demonstrated by the dearth of Kawasaki sales in east Orlando.

48. Sales patterns of the dealerships demonstrate that Respondents are not

located to provide convenient interbrand competition. Customers opt for the

brand represented in east Orlando, i.e., Yamaha. Kawasaki is not represented in

east Orlando. Respondents are too far from the proposed location to overcome

the convenience disadvantage suffered by consumers there.

2.6(b) Customer Convenience

49. The distance between Cycle Sports in west Orlando and OYK is 12.1

miles. This represents a driving time of 25 to 31 minutes. The distance

between OYK and Seminole Powersports, in Seminole County, is 15.3 miles. This

represents a driving time of 25 to 47 minutes.

50. Customers in east Orange County can travel a very short distance to

OYK, a Yamaha dealership. To buy a Kawasaki, customers must travel 25 to 31

minutes west, or 25 to 47 minutes north, to a Kawasaki dealership.

2.6(c) National And State Averages

51. From 1989 to 1994, Kawasaki sales in Orange County fell 61 percent

while its national and state market share fell only 28 percent and 30 percent,

respectively. Kawasaki's market share of on-highway motorcycles fell 28 percent

from 19.13 percent to 13.80 percent. The state market share fell 30 percent

from 21.75 percent to 15.23 percent. In Orange County, Kawasaki's market share

fell from 30.56 percent, in 1989, to 11.69 percent in 1994.

3. Impact Of Proposed Dealership

52. Sales patterns of Cycle Sports most overlap those of the proposed

dealership. Cycle Sports is not primarily concerned with an additional

motorcycle dealership. The primary concern of Cycle Sports is that Kawasaki

will permit the proposed dealership to establish another watercraft dealer.

53. Respondents presented no credible and persuasive evidence of any

adverse impact on profitability or sales from the proposed dealership. The

proposed dealership will not negatively impact existing dealers. The proposed

dealership will bring additional exposure for the brand and additional

opportunity for customers to comparison shop among brands.

54. The negative impact on Kawasaki is measured by lost sales

opportunities. The proposed dealership will provide Kawasaki with an

opportunity to capture those lost sales.

55. The addition of a Kawasaki dealer in Orange County will have a

positive impact on consumers. They will benefit from additional inter-brand and

intra-brand competition. That competition will benefit consumers in terms of

price, service, and product availability.

4. Size And Permanency Of Investment By Existing Dealer

56. Respondents expanded their respective facilities since purchasing

their Kawasaki dealerships. The additional investment represented by the

expansion of both dealerships was not required by Kawasaki to comply with

respective dealer agreements or otherwise. The additional investment was the

result of Respondents' separate and independent choice.

CONCLUSIONS OF LAW

57. The Division of Administrative Hearings has jurisdiction over this

proceeding pursuant to Section 120.57(1). The parties received adequate notice

of the formal hearing.

5. Standing

58. Respondents have standing to protest the proposed dealership within

the meaning of Section 320.642(3)(b). Respondents are each located within 12.5

miles of the proposed dealership.

6. Burden Of Proof

59. Section 320.642 governs Kawasaki's request to establish OYK as a

Kawasaki motorcycle dealership. Petitioners must show that existing Kawasaki

dealers are not providing adequate representation in the community or territory

to be served by the proposed dealership.

7. Inadequate Representation

60. Respondents do not adequately represent Kawasaki in Orange County.

Representation is inadequate based on types of vehicles and market penetration

in the community or territory.

7.1 Types Of Vehicle

61. Kawasaki's motorcycle dealers sell four basic types of wheeled

vehicles. They are: on-highway motorcycles, which possess the appropriate

equipment to be registered for highway use; dual purpose motorcycles, which are

equipped for street use, but may also be used off road; off-road motorcycles

which are not equipped for street use, and cannot be registered for that

purpose; and all terrain vehicles, or ATVs , which are used in off-road

settings.

62. Section 320.642 governs only the addition of motor vehicle dealerships

as that term is defined in Section 320.60(11). Section 320.60(11) defines a

"motor vehicle dealer" as any person or entity that sells, repairs, or services

three or more motor vehicles annually. Section 320.60(10) defines the term

"motor vehicle" as: 

any new automobile, motorcycle or truck

the equitable or legal title to which has

never been transferred by a manufacturer,

distributor, importer or dealer to an

ultimate purchaser. (Emphasis supplied).

63. In order to be a motorcycle dealer, the vehicle sold must be a "motor

vehicle". The term "motor vehicle" is defined in Section 320.01(1)(a), as

follows:

(a) An automobile, motorcycle, truck,

trailer, semitrailer, truck tractor and

semitrailer combination, or any other

vehicle operated on the roads of this

state, used to transport persons or property,

and propelled by power other than muscular

power, but the term does not include traction

engines, road rollers, such vehicles as run

only upon a track, bicycles, or mopeds.

(Emphasis supplied).

64. Section 320.27(1)(a), defines a motor vehicle as:

any motor vehicle of the type required to be

registered and titled under Chapters 319 and 320...

65. Only on-highway and dual purpose motorcycles are "motor vehicles"

within the meaning of Section 320.27(1)(a). Only on-highway and dual purpose

motorcycles are required to be registered and titled and driven on the roads of

this state. Other products, such as off-road vehicles and personal watercraft,

may or may not be manufactured and distributed by the same entity which

distributes motorcycles. However, the sales of those other products are not

governed by Section 320.642.

66. Inadequate representation exists for on-highway and dual purpose

vehicles. It also exists if the analysis is expanded to all wheeled vehicles

sold by Kawasaki dealers, including off-road and ATV vehicles.

7.2 Community Or Territory

67. Section 320.642 does not define community or territory. The relevant

community or territory must be determined according to the facts and

circumstances in each case. Sea Crest Cadillac, Inc. v. Larry Dimmitt Cadillac,

Inc., DOAH Case No. 88-2252 (Fla. Dept. of Highway Safety and Motor Vehicles

1989), aff'd Larry Dimmitt Cadillac, Inc. v. Sea Crest Cadillac, Inc., 558 So.2d

136 (Fla. 1st DCA 1990).

68. In determining the relevant community or territory, the area described

in the contract is a material fact entitled to "great weight." However, it is

not conclusive. Bill Kelley Chevrolet, Inc. v. Calvin, 308 So.2d 199, 201

(Fla. 1st DCA 1974); Larry Dimmitt, 558 So.2d at 136.

69. Consumers do not treat Orange and Seminole counties as a single

interconnected market. There is very limited cross-sell across counties.

Consumer behavior shows that Orange County is the appropriate community or

territory. Even if Seminole and Osceola counties are considered to be the

community or territory, Kawasaki is inadequately represented.

70. Inadequate representation may be demonstrated in the community or

territory as a whole, or in an identifiable plot within the community or

territory. Dave Zinn Toyota, Inc. v. Department of Highway Safety and Motor

Vehicles, 432 So.2d 1320, 1322 (Fla. 3d DCA 1983), (community or territory as

a whole); Bill Kelley Chevrolet v. Calvin, 322 So.2d 50, 52 (Fla. 1st DCA 1975)

cert. denied 336 So.2d 1180 (Fla. 1976)(identifiable plot within a community or

territory). If Orange, Seminole and Osceola counties are considered to be the

community or territory, Orange County may be considered to be an identifiable

plot within the community or territory.

8. Legislative Purpose

71. Section 320.642 was not enacted to foster combinations to prevent the

introduction of dealer competition which is reasonably justified in terms of

market potential. Bill Kelley Chevrolet, 322 So.2d 50 at 52. The express goal

of Chapter 320 is to protect the welfare of Florida citizens by: (1) maintaining

competition; (2) providing consumer protection and fair trade; and (3) providing

minorities with opportunities for full participation as motor vehicle dealers in

the community. Section 320.605.

72. The addition of OYK as a Kawasaki dealership in Orange County will

advance the legislative purpose for Section 320.642. It will protect the

welfare of Florida citizens by providing additional competition and consumer

benefits such as enhanced competition in service, availability, and price.

9. Section 320.642(2)(b)3. and 11: Reasonably Expected

Market Penetration And Volume of Registrations of

Existing Dealers

73. Kawasaki's reasonably expected market penetration in the community or

territory is appropriately determined by comparing a metropolitan market that is

performing adequately. That market is Duval County. Such comparison markets

are routinely used instead of state or national averages as the appropriate

standard to determine performance in the market at issue. See, Teriy Ford

Company and Ford Motor Company v. Hollywood Ford, Inc., DOAH Case No. 94-402,

page 7, (Fla. Dept. of Highway Safety and Motor Vehicles 1995); American Suzuki

Motor Corp., and Fun Stream Recreation, Inc. v. Mechanical Services of West Palm

Beach, Inc. and Deerfield Suzuki, Inc., DOAH Case Nos. 94-6991 and 95-27, page

17, (Fla. Dept. of Highway Safety and Motor Vehicles 1995).

74. Even if the market penetration in the community or territory is

compared to state and national averages, Kawasaki's penetration is inadequate.

Kawasaki's Orange County market penetration has been well below reasonably

expected levels since 1991. The level of registrations achieved by Kawasaki

dealers selling motorcycles in Orange County has declined.

10. Section 320.642(2)(b)10: Economic and Market Conditions

75. Orange County has experienced considerable growth in the motorcycle

market in the last few years. That growth is projected to continue. The same

is true for the projected population growth in Orange County.

11. Section 320.642(2)(b)6: Distance Between Existing

Kawasaki Dealers and the Proposed Dealer Location

76. The ability of existing Kawasaki dealers to sell Kawasaki motorcycles

in the market diminishes with distance. Kawasaki cannot compete effectively

with non-Kawasaki dealers located in east Orange County.

77. Establishment of a Kawasaki dealer at the proposed location will

enable Kawasaki to offer better convenience to consumers. It will not threaten

competitive advantages the existing Kawasaki dealers enjoy near their own

dealerships.

78. Existing Kawasaki dealers are so far from east Orlando that their

sales are not likely to be substantially impacted by the addition of OYK. The

location of the proposed dealership is three miles further away from the

existing dealer in Orange County than was the second Kawasaki dealership that

previously existed in Orange County.

12. Section 320.642(2)(b)9: Adequacy of Competition

79. An inter-brand competitor in east Orlando, Yamaha, offers greater

convenience to east Orlando consumers. That has resulted in inadequate Kawasaki

inter-brand competition in Orange County as a whole. Kawasaki's market share is

low. Its effectiveness in Orange County has declined.

13. Section 320.642(2)(b)9: Adequacy of Convenient

Consumer Care for Kawasaki

80. Existing Kawasaki dealerships in west Orange County and in Seminole

County are not conveniently located to provide adequate Kawasaki sales and

service in east Orlando. A Kawasaki dealer in east Orlando will benefit

consumers. It will provide a growing number of Orange County residents with a

more convenient place to shop for a new Kawasaki motorcycle and with a more

convenient Kawasaki service location. It will also provide Orange County

consumers with an increased inventory to choose from and expanded opportunities

to compare the value and service offered by Kawasaki and other brand dealers.

14. Section 320.642(2)(b)1: Impact On Existing Dealers

81. Respondents presented no credible and persuasive evidence of any

adverse impact on profitability or sales from the proposed dealership. The

proposed dealership will not negatively impact existing dealers. The proposed

dealership will bring additional exposure for the brand and additional

opportunity for customers to comparison shop among brands.

15. Section 320.642(2)(b)1: Impact on Kawasaki

82. Kawasaki is currently losing available sales each year due to the

inability of existing Kawasaki dealers to penetrate the Orange County market at

reasonably expected levels. In light of the opportunity available, lost

motorcycle sales are significant.

83. Lost sales are due in relevant part to the inability of existing

dealers to adequately represent Kawasaki in a large and expanding market. The

addition of a Kawasaki dealer in east Orlando will make Kawasaki more

competitive and enable it to capture a reasonable share of the market.

16. Section 320.642(2) (b) 1: Financial Impact on the

Protesting Dealer

84. Existing dealers will not lose sales as a result of the addition of

the proposed dealership. Even if some sales are lost, the manufacturer is not

statutorily required to prove an absence of any financial impact on the

protesting dealer. Monmouth Chrysler-Plymouth, Inc. v. Chrysler Corp., 509 A.2d

161, 168-69 (N.J. 1986).

85. There are significant sales available, even if the projected growth of

Orange County is disregarded. The proposed dealership will not have a negative

affect on existing dealers.

17. Section 320.642(2) (b)2: Dealers' Investment To Comply

With Dealer Agreements.

86. Respondents introduced evidence of additional investments in their

respective facilities since acquiring their Kawasaki dealerships. Neither of

the dealers offered any evidence that the investments were made to comply with

their dealer agreements, were suggested by Kawasaki, or were undertaken

primarily to serve Kawasaki. The investments, were made at the dealers' own

instance and do not demonstrate that the need for an additional dealership

should go unsatisfied.

18. Section 320.642(2)(b): Weighing of the Factors.

87. Conflicting factors in Section 320.642 must be balanced. Graham v.

Estuary Properties, Inc., 399 So.2d 1374, 1378 (Fla. 1981). The appropriate

weight to be given each factor is not prescribed statutorily but varies

depending on the facts in each case. North Ridge General Hospital v. NME

Hospitals, Inc., 487 So.2d 1138, 1139 (Fla. 1st DCA 1988).

88. Taking each of the factors listed in Section 320.642 into

consideration, existing Kawasaki dealers are not adequately representing

Kawasaki in the relevant community or territory. Kawasaki satisfied its burden

of proof. Kawasaki showed that an additional dealership at the proposed

location is appropriate.

RECOMMENDATION

Based upon the above findings of fact and conclusions of law, it is,

RECOMMENDED that a Final Order be issued granting the application of OYK to

establish an additional Kawasaki dealership at 9334 East Colonial Drive,

Orlando, Orange County, Florida.

DONE and ORDERED this 5th day of January, 1996, in Tallahassee, Leon

County, Florida.

___________________________________

DANIEL S. MANRY, Hearing Officer

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

[phone]

Filed with the Clerk of the

Division of Administrative Hearings

this 5th day of January, 1996.

ENDNOTES

1/ All references herein to Sections, unless otherwise noted, shall be to

Florida Statutes (1993).

2/ The argument the term "community or territory" is defined as in Section

320.642(3)(b)1 as the 12.5 mile circle around each dealership has been

repeatedly rejected. Gulf Oldsmobile GMC Truck, Inc. v. Stinnetts' Pontiac

Service, Inc. DOAH Case No. 90-3030, Order dated August 14, 1990; and Coral

Oldsmobile-GMC Truck, Inc. v. King Motor Company, DOAH Case No. 91-0861, Order

dated August 6, 1991, attached, as Exhibits A and B.

3/ Larry Dimmitt Cadillac, Inc. v. Seacrest Cadillac, Inc., 558 So.2d 136 (Fla.

1st DCA 1990).

APPENDIX TO CASE NO. 95-3852

Respondents' Proposed Findings Of Fact

1.-2. Accepted in substance

3. Accepted in part and rejected in part as not supported

by credible and persuasive evidence

4.-5. Rejected as not supported by credible and persuasive

evidence

6. Rejected as irrelevant and immaterial

7.-8. Rejected as not supported by credible and persuasive

evidence

9. Rejected as recited testimony

10.-12. Rejected as not supported by credible and persuasive

evidence

13. Rejected as irrelevant and immaterial

14.-17. Rejected as not supported by credible and persuasive

evidence

18.-19. Rejected as irrelevant and immaterial

20., 22. Rejected as not supported by credible and persuasive

evidence

21. Rejected as irrelevant and immaterial

COPIES FURNISHED:

Dean Bunch, Esquire

Cabaniss & Burke, P.A.

909 East Park Avenue

Tallahassee, Florida 32301

Richard Weber, Esquire

9334 East Colonial Drive

Orlando, Florida 32817

Lon Wagner, Qualified Representative

3812 Heatherington Road

Orlando, Florida 32808

Charles J. Brantley, Director

Division of Motor Vehicles

Room B439, Neil Kirkman Building

Tallahassee, Florida 32399-0500

Enoch Jon Whitney, Esquire

General Counsel

Neil Kirkman Building

Tallahassee, Florida 32399-0500

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to this Recommended

Order. All agencies allow each party at least 10 days in which to submit

written exceptions. Some agencies allow a larger period within which to submit

written exceptions. You should contact the agency that will issue the final

order in this case concerning agency rules on the deadline for filing exceptions

to this Recommended Order. Any exceptions to this Recommended Order should be

filed with the agency that will issue the final order in this case.