Stephen Becker Automotive Files Suit Against Shelby American
Introduced in late 2014 and put on sale in January 2015, the 50th Anniversary Cobra 427 meant that Shelby enthusiasts can purchase a limited-edition, classic-looking Cobra without having to pay the million-dollar sticker the original 427s fetch at auctions. A few months later, and the anniversary roadster could spell trouble for Shelby American, in the form of a lawsuit for alleged acts of unfair competition and breach of its dealer agreement.
In a complaint filed in Los Angeles Superior Court by Stephen Becker Automotive Group, a Georgia-based authorized Shelby dealer known as Planet Shelby Cobra (Planet Shelby), the manufacturer is accused of violating Plaintiff’s dealer agreement as well as California and Nevada statutes against unfair competition. Specifically, Stephen Becker Automotive Group claims Shelby American engaged in direct sales of vehicles to members of the general public and stopped referring customers to Planet Shelby, as required by the dealer agreement.
The complainant went on to add that Shelby American refused to provide a VIN number for a 50th Anniversary Cobra 427 it had ordered for one of its customers. Later on, Shelby informed dealerships it had already sold a "significant" number of the Anniversary roadsters directly to the public and gathered dealers, including Planet Shelby, to participate in a lottery to determine which would be able to order the cars. The lottery was contrary to the "first come first serve" basis promised initially, the dealership added.
Continue reading to learn more about the new lawsuit against Shelby.
Is Shelby Competing Against Its Own Dealerships?
Interestingly enough, Planet Shelby alleges that Shelby American sold at least one of the 2015 Anniversary Cobras directly to one of its customers, without Planet Shelby’s agreement or knowledge. The dealership also claims Shelby sold at least one car, with a fully installed engine, directly to a member of the public for about $500,000, "without providing any of the independent dealers an opportunity to sell the vehicle," which is also contrary to the agreement between Planet Shelby and Shelby American.
As a result, the dealership seeks damages for loss of investment, lost interest, loss of business goodwill and lost profits on business revenues that would have been earned if Shelby had dealt fairly with Planet Shelby. Planet Shelby also seeks punitive damages claiming that Shelby American "acted with a conscious disregard for Plaintiff’s rights, and with the intent to injure Plaintiff such as to constitute oppression, fraud, or malice under California Civil Code Section 3294."
Needless to say, this doesn’t look good at all.
Why it matters
Judging by the content of the complaint, things don’t look good at all for Shelby American, which apparently violated the contract their own attorneys wrote up with the dealer network. Competing with your own dealer is unfair practice no matter how you look at it and no matter the reasons behind it, in this case likely being a larger profit margin.
Interestingly enough, this isn’t the first time that Stephen Becker took Shelby to court. The dealership sued the company back in 2012 too after Shelby failed to the deliver several cars that were ordered, including 2012 Anniversary Cobras ordered 20 months earlier.
No matter the outcome this new case will have, Shelby American is about to receive a big blow. More importantly, Shelby’s decision to sell its cars directly to customers may very well mean the company is struggling financially.
Launched for the 2015 model year, the 50th Anniversary Cobra 427 will be built in only 50 units to celebrate the introduction of the initial Cobra 427. Each car will be documented in the World Registry alongside the original 343 Cobras built by Shelby Shelby American in the 1960s. The 2015 Cobra 427 will come with CSX4550 to CSX4599 serial numbers and a 1965 manufacturer’s statement of origin. Pricing begins from $119,995 for a fiberglass body and from $179,995 for an aluminum shell. The sticker doesn’t include the drivetrain components, which have to be purchased separately.
Find out more in our full review here.