CNCDA lawsuit alleges defendants knowingly violated California franchise laws by competing directly against their Honda and Acura franchisees
Sacramento, Calif.—The Los Angeles County Superior Court overruled a series of demurrers filed by American Honda Motor Co., Inc., and Sony Honda Mobility of America, Inc., in a lawsuit filed by the California New Car Dealers Association (CNCDA).
In its lawsuit, CNCDA alleges that the defendants are knowingly violating California franchise laws by competing directly against their Honda and Acura franchisees with the Afeela brand. The court rejected the defendants’ attempts to toss the case in Monday’s order.
In its order, the court found that Sony Honda’s $200 “Reservation Agreement” is the first step toward purchasing an Afeela vehicle. The court also ruled that Sony Honda is sufficiently affiliated with American Honda to allow the case to continue.
CNCDA alleges that Sony Honda and its partners are engaging in unfair competition and seeks declaratory and injunctive relief to stop illegal direct-to-consumer sales of Afeela-brand vehicles. After the court’s order, CNCDA’s lawsuit proceeds to discovery and the next stages of litigation.
Assembly Bill 473 (AB 473), enacted in 2023, prohibits automakers from using affiliated brands to compete with their own franchised dealers. Despite this law, Sony Honda and its partners continue to accept deposits from California consumers through its website for new Afeela-branded vehicles, thereby bypassing the state’s Honda and Acura dealerships. They have announced plans to deliver Afeela vehicles directly to California consumers in the second half of 2026.
“Franchised dealers are loyal business partners for the Honda and Acura brands, in many cases building trust and their brand strength over the span of decades,” said Brian Maas, CNCDA President. “By precluding them from selling new and exciting vehicles with the latest technologies, Sony Honda is essentially turning its back on their Honda and Acura dealer partners and the thousands of people they employ. Not to mention, it’s illegal.”
“Sony Honda actively lobbied against AB 473 when it was before the Legislature— and now that it’s the law, they’re simply ignoring it, forcing our non-profit trade association to take them and their high-priced lawyers to court. Today’s ruling makes clear that these ‘reservation’ practices are harmful. We will continue to fight for the rights of all California dealers,” said Maas.
CNCDA requests immediate injunctive relief to halt unlawful reservations and sales, along with enforcement of franchise laws to protect California’s dealer network and the consumers they serve.
CNCDA also filed a lawsuit against Scout Motors, a division of Volkswagen, in April 2025 for similar franchise-law violations. That case is pending.
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