March 28, 2014 / 4:35 PM / 5 years ago

GM faces French dealer challenge over Chevy exit

A man walks through a pedestrian bridge near the General Motors headquarters in Detroit, Michigan December 3, 2013.REUTERS/Joshua Lott

PARIS (Reuters) - General Motors (GM.N) is facing a legal battle with a group of French Chevrolet dealers who are preparing to go to court over the terms of the brand’s withdrawal from Europe.

The U.S. carmaker said in December it would halt Chevrolet sales in the region at the end of next year, opening negotiations to end dealer contracts.

But France’s CNPA, which represents retailers, repair shops and service providers across the auto industry, has called a news conference on Tuesday to announce legal action on behalf of a group of Chevrolet dealers who have rejected GM’s terms.

The court challenge, to be filed on Monday, accuses GM of failing to honor compensation payments owed to dealers as it unwinds franchise contracts, a CNPA spokeswoman said.

GM France said the Detroit-based automaker was not yet aware of any legal action.

“All contracts have been respected,” a spokesman said, declining to comment on their terms. Cancellations are being negotiated on a case-by-case basis, he added.

Dealers are seeking redress for restructuring costs, previous investments to meet GM showroom requirements and the impact of Chevrolet’s withdrawal on the value of their businesses and vehicle stocks, according to the CNPA.

The association declined to say how many of the Chevrolet brand’s 133 French dealers are backing the challenge.

Reporting by Laurence Frost; Editing by Pravin Char

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