Tim Reuss, President & CEO of the Canadian Automobile Dealers Association
With interest rising among Canadian dealers in potential partnerships with new automotive brands entering the market, the Canadian Automobile Dealers Association (CADA) has issued a special bulletin outlining key considerations before signing on.
The guidance comes as dealers explore opportunities with emerging OEMs — although it’s widely understood to include Chinese electric vehicle manufacturers — following the federal government’s decision to allow up to 49,000 Chinese EV imports into Canada in 2026. While the bulletin does not name any country or brand directly, CADA’s President and CEO Tim Reuss said the timing reflects a clear shift in dealer conversations across the country.
“We are aware that certain brands are talking to certain dealers, or dealers are talking to certain brands about the possibility of taking on a franchise,” said Reuss in an interview with Canadian auto dealer. “In those discussions, dealers are rightly focused on the business elements — product, pricing, supply, warranty — but we want to make sure they don’t forget about the guardrails.”
In the bulletin, a copy of which was obtained by Canadian auto dealer, CADA states it is “aware that some of you are in discussions with new brands that might be entering the Canadian market in the near future,” and it said the document is intended to provide “information and support… based on concrete examples, experiences and lessons learned” from other jurisdictions.
Reuss said those lessons, drawn from markets such as Australia, Brazil, Mexico and Europe, are informing CADA’s approach in Canada. “We felt it was important, even if it states the obvious, to put that information out there at the right time,” he said. “There are things dealers take for granted because they’ve always been part of doing business in Canada — but that might not be second nature to new market entrants.”
The bulletin places particular emphasis on dealer agreements. It states that “contractual conditions should be the same for all dealers signing on to the same brand,” and that agreements should include the National Automobile Dealer Arbitration Program (NADAP) as a dispute resolution mechanism.
It also specifies that “dealers have the right to form a dealer council and cannot be restrained from forming one,” while encouraging early formation of those councils.
Reuss said dealers should use the bulletin as a practical tool in discussions with prospective OEM partners. “If you’re having a conversation, slide that bulletin across the desk and say, ‘Where are we on all of these topics?’” he said. “Get clarity upfront.”
Beyond contractual terms, the bulletin outlines what it describes as “common industry practices in Canada.” These include participation in the Canadian Motor Vehicle Arbitration Plan (CAMVAP), membership in national industry associations, and sharing service and repair information with the aftermarket.
Reuss framed those expectations as foundational to the Canadian market. “It’s about ensuring a level playing field,” he said. “All manufacturers currently operating in Canada conform to these practices. New entrants should as well.”
He added that CADA has already communicated those expectations directly to some prospective OEMs. “If you come to Canada, here are the guardrails,” said Reuss. “We’ve been very clear and upfront about that.”
The bulletin also cautions dealers about early-stage market dynamics, noting that some new entrants may face “import quota driven volume limitations,” and that investment decisions should reflect that reality. Reuss reinforced that point, particularly around the lack of immediate aftersales opportunity.
“Dealers need to think about investment decisions in that context,” he said. “You may not have meaningful aftersales business right away because the car park hasn’t been built yet.”
Interest among dealers is growing quickly, he added, with inquiries coming from across the country as new brands begin exploratory discussions. “We’re not in the business of brokering deals,” said Reuss. “But we are here to provide advice, and that’s what this bulletin is about: helping dealers understand what to look out for.”
CADA’s guidance also reflects a broader effort to ensure Canada benefits from lessons learned in other markets that have already navigated the arrival of new global players.
“In some cases, those jurisdictions experienced challenges, for example, around dealer representation structures like councils,” Reuss said. “Canada has the advantage of being able to learn from that and get it right from the start.”
At the same time, CADA is maintaining a neutral stance on whether dealers should pursue partnerships with new entrants. “Our role is not to tip the scale one way or the other,” said Reuss. “It’s to make sure dealers are informed.”
That objective also underpins CADA’s latest dealer study tour to China happening this week, which will include more than 70 dealer participants and a visit to Auto China (the Beijing International Auto Show).
“The purpose is education,” said Reuss. “If you haven’t seen the pace of development and what’s happening there, it’s very difficult to fully grasp the scale of change in this industry.”
For dealers now weighing new opportunities, the message from CADA is straightforward: proceed, but do so with a full understanding of the terms, expectations and long-term implications.
“Ask the questions,” said Reuss. “Make sure the fundamentals are in place. Because those fundamentals are what protect dealers in the long run.”
