Chattanooga Honda Dealer Fined for Allegedly Selling Recalled Models

The National Highway Traffic Safety Administration has levied a $125,000 fine against Southern Honda Powersports following an investigation into allegations the Chattanooga, Tenn., dealership sold unrepaired recalled models. Southern Honda Powersports bills itself as the “World’s largest Honda powersports dealer”.

Federal laws require dealers to stop selling models that are recalled until the defect or noncompliance issue has been remedied. A NHTSA investigation concluded Southern Honda Powersports had sold and delivered 329 recalled motorcycles between 2007 and 2012 without inspecting or repairing any defects.

Southern Honda Powersports denies the allegations, which were sparked allegations raised last October. The dealership reached a settlement with NHTSA to pay a sum of $125,000 to the U.S. Treasury in installments of $25,000 a year until 2017. Under the terms of the agreement, Southern Honda Powersports admits to no liability or culpability. Without this agreement, the dealership faced a potential fine of up to $6,000 per vehicle, which could have amounted to $1,974,000.

“Safety is our highest priority,” says David Strickland, NHTSA administrator. “NHTSA expects all manufacturers and dealerships to work together to ensure that recalls are completed before new vehicles are sold to the driving public.”

The allegations first surfaced when a former Southern Honda marketing consultant Ernest “Pug” Vickers III claimed more than 25,000 new motorcycles and ATVs were unsafely prepared by the dealership from February 2004 to May 2007. Vickers alleged Southern Honda sold hundreds to thousands of recalled vehicles without correcting their problems.

In a Oct. 28, 2012, report by USA Today, Southern Honda Powersports owner Tim Kelly denied Vickers’ allegations. Kelly told USA Today some motorcycles may have been delivered but their owners were notified and the affected units repaired. Kelly also says he had recently fired one salesman for selling a recalled vehicle.

The NHTSA investigation covers a period that follows the time frame Vickers raised. Vickers continues to press the issue, telling USA Today: “Considering the fact that so many lives have been placed at risk … (it) is absolutely unbelievable that they settled for such a minuscule amount of money.”

[Source: NHTSA, USA Today]

By Dennis Chung