Paperwork snag halts sales of new Volvos in Hawaii - Hawaii News Now - KGMB and KHNL

Paperwork snag halts sales of new Volvos in Hawaii

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KAKAAKO (HawaiiNewsNow) -

Yellow decals on the windshields of Volvo vehicles lining the lot at Volvo Cars of Honolulu show which cars the dealer can't be sold.

They have been off-limits since last Friday when the dealership suddenly slammed the brakes on selling new Volvos.

"We can't negotiate or sell cars right now. We also have several customers that have pre-ordered vehicles that are sitting at the docks right now because we can't pick them up," said John Martinho, vice president of Volvo Cars of Honolulu.

The problem is a paperwork issue.

There isn't a signed agreement between the manufacturer Volvo Group of Sweden and the distributor Volvo Car USA LLC. That means Hawaii's Motor Vehicle Industry Licensing Board can't issue a license to Volvo Car USA.

Volvo Cars of Honolulu, a locally owned franchise, is paying the price.

"If we're not authorized to sell new cars, then we could definitely lose the company," Martinho said.

He calculates he's losing $1,200 a day. Volvo Car USA also shipped him $700,000 worth of new vehicles. The bill is running up for interest charges and depreciation. Adding to the angst, 45 people work for Volvo Cars of Honolulu.

"The sales team is strictly off commission," Martinho said. "If they don't sell anything then basically they don't make a paycheck."

In a letter dated Dec. 29, the state announced it had deferred making a decision on Volvo Car USA's license application in Hawaii. It advised that the application was in "pending status" and Volvo Car USA was not "authorized to distribute motor vehicles in the state."  

Martinho said he hasn't been able to get an answer from the state or the New Jersey-based distributor on whether his dealership is legally allowed to sell new Volvos in the interim. 

His company could be in limbo until the Motor Vehicle Industry Licensing Board's next meeting on Feb. 21.

"It's scary for us," he said.

Volvo Cars of Honolulu is selling used Volvos and servicing Volvos.

At this point Martinho said he isn't sure if those business dealings will also have to stop.

The state Department of Commerce and Consumer Affairs issued the following statement on the issue:

At its Dec. 20, 2016 regular meeting, the Motor Vehicle Licensing Board reviewed the license application and oral testimony presented by the applicant, Volvo Car USA LLC. After deliberations, the Board determined that the applicant had not yet provided the documentation required under Hawaii Revised Statutes, Section 437-7(f) and as such, deferred decision making on the application. The application is in pending status until the Board receives and reviews a complete application.

Professional and Vocational Licensing Division staff works with applicants to address discrepancies. When the information required by law is received, and the application is in order, the staff would be able to take additional action.

Volvo Cars of North America LLC was licensed in the State of Hawaii as a motor vehicle distributor. The license was not renewed and was forfeited effective June 30, 2016. The current application by Volvo Car USA LLC before the Board is for a new license to distribute cars in Hawaii. Licensed distributors sell cars and parts to local dealerships and the current license application process only involves Volvo Car USA LLC. 

The Board’s determination to defer decision making on Volvo Car USA LLC’s application relates to Volvo Car USA LLC—a national distributor for Volvo products. It does not relate to Envy Hawaii LLC, dba Volvo of Honolulu, which serves as a local dealer/retailer in the State of Hawaii. 

Applicants have a privacy interest in the application process and DCCA does not provide specifics on pending applications. Information about Volvo Car USA LLC’s pending application was publically discussed at a recent Board meeting.  

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