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Lawsuit Accuses Car Industry Of Inflating Prices
#1
Lawsuit accuses car industry of inflating prices
Wed. Sep. 26 2007
Source: CTV.ca News Staff

A class-action lawsuit launched in Toronto accuses major automakers and dealers of violating competition and consumer protection laws by conspiring to artificially inflate car prices in Canada.

Juroviesky and Ricci LLP have filed the suit in Ontario Superior Court.

Lawyer Henry Juroviesky told CTV.ca on Wednesday that prices are being inflated by automakers that tell U.S. dealers not to sell to Canadians.

"They dissuade and threaten their dealers from selling...(Canadians) cars," said Juroviesky.

"What that does is artificially inflate the prices of cars in Canada -- it does not allow the prices to fall to their natural level."

Juroviesky denounced dealer tactics, such as voiding warranties, used to stop cross-border shoppers.

"If a car in Canada is sold for $35,000, and you could go to Buffalo, New York and buy it for $25,000, then according to the natural rules of competition the price in Canada should fall to avoid you from going to Buffalo," said Juroviesky.

He said transportation costs should be the only add-on for cars sold in Canada.

Juroviesky said he got involved in the lawsuit after working with a company that helps Canadian auto dealers go to the U.S. to finance cars.

"The dealers came back and said 'We cannot get our hands on new cars,'" he said. "We started investigating why and we saw that the auto manufacturers have put these impediments in front of Canadians to... keep their prices higher."

Dealers in the past have used the large gap between the Canadian dollar and U.S. greenback to justify the higher prices in Canada, said Juroviesky.

"Now that the dollar is at parity they can't use that cloud... to mask what they're doing," he said.

U.S. lawsuits

Meanwhile, class-action suits in the U.S. -- launched in 2003 against automakers and dealer organizations -- are currently being heard in a court in Maine.

The lawsuits -- which came at a time when the Canadian dollar was valued in the 65-cent US range -- were launched after Americans crossing the border to buy cars were denied warranty coverage.

The lawsuits argue that the failure to honour warranties denied Americans the benefits of lower prices.

Juroviesky said it will take about nine months to find out if the lawsuit his firm filed will be certified. If it is, the lawsuit will include all people that bought or leased cars in Canada from 2005 to 2007.

The statement of claim names as defendants:

General Motors Corp., General Motors of Canada Ltd., American Honda Motor Co. Inc., Honda Canada Inc., Chrysler Canada Inc., Chrysler LLC, Nissan North America Inc., Nissan Canada Inc., along with the Canadian Automobile Dealers Association and the National Automobile Dealers Association in the United States.

The firm also plans to add Toyota and Ford, including their Canadian units, once it has signed up representative plaintiffs for each one.

Still, a recent study that compared car sales on both sides of the border found that price gaps are narrowing.

"In all of our 'popular' segments ... the price gap between Canada and the U.S. narrowed in 2007," said industry analyst Dennis DesRosiers, who compiled the study.

The segments include subcompact and compact cars, compact sport utility vehicles, minivans and full-sized pickup trucks which, combined, represent two-thirds of the vehicles Canadians buy annually.

However, major gaps do still exist for luxury sports car buyers -- where buying in the U.S. could mean an average savings of $14,000.
I was the only member on this board with a Yellow Focus Sedan, and a 2002+ Euro Facelift on a sedan.
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#2
Some cars are built in Ontario and they are less expensive if you buy them in the US.

So I vote for the Lawsuit.. :blink:


Martin !
...V8 RX7...

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#3
ABOUT f***ING TIME!!!!!!!!!!

I want to buy that man a beer
I drive a 2010 Golf that growls at people when it goes over 3000rpm.
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#4
mpcv2000,Sep 26 2007, 02:03 PM Wrote:Some cars are built in Ontario and they are less expensive if you buy them in the US.

So I vote for the Lawsuit..  :blink:
[right][snapback]249599[/snapback][/right]
Can we sue the gas companies as well then as our gas goes down there and we have to pay more for the same s***.

I also agree to this lawsuit
2005 Liquid Grey ZX3 RIP
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#5
Well, hopefully these suits will affect the Asian and European car makers too...

In terms of the price of Fuel....fuel is a consumer commodity, driven by the vicious supply vs demand circle, and likely won't ever be what we would consider "cheap again"...

I can't complain about the price of fuel, as both of my vehicles are V8's (one of them actually gets as good or better fuel economy on the highway than my Zetec powered ZX3 did), and I like to drive both of them...

Anyhoo, back on topic...I hope that the pricing of not just vehicles goes to normal in Canada, but also the price gouging we're usually getting from aftermarket suppliers south of the border too. They can't advertise 2 different prices, or expect to get paid them either, not with the money the way it is...

Bleeding Ford Blue again...
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#6
There was an article online from the G+M that states that realistically, at least "border towns" with identical cars should have started adjusting their prices already.

The dealers' excuse is that the selling price is based on previous allocation times (earlier in the year) and the amount they've already been invoiced for the cars.

So what, there are then potentially HOW MANY cars that may never be sold due to the rise in the loonie? I'm not buying that... no pun intended.

If you want new, go States-side. If you don't care about warranty, you're all set. More and more manufacturers are denying warranty coverage on new vehicles purchased in the US, so beware.
Daily driver 1: 2007 Jeep Wrangler Unlimited Sport "S"

33" BFG Mud-Terrain KM2s, lots of Rough Country gear - bumper, 2.5" lift, swaybar disconnects, Superwinch 10,000lb winch, Detroit Locker in rear D44 axle, custom exhaust, K+N filtercharger, Superchips-tuned.

Daily driver 2: 2006 Subaru Legacy GT

COBB Stage 1+ package - AccessPort tuner, COBB intake and airbox. Stage 2 coming shortly - COBB 3" AT stainless DP and race cat, custom 3" Magnaflow-based exhaust and Stage 2 COBB tune.
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#7
The beef is with the manufacturers not the dealers.

The manufacturers arbitrarily set retail prices and the price the dealer pays is always a percentage of MSRP - usually in the area of 90% of MSRP.

Typical dealer margins at MSRP are in the range of 10 to 12% depending on option content, and real-world margins are closer to 4 to 5%.

So there's no way a dealer can make up the difference, the reduction in prices has to come from the manufacturer and it has to be represented as a reduction in the MSRP.

If you read your Focus owners manual it clearly states that your warranty is good throughout North America - and Americans get the same manual. AFAIK it's only Honda that is using the "warranty threat" and they're really treading on thin ice with that one.

But let's be careful what we ask for ... the only real long-term solution is to price our vehicles exactly the same as they are in the U.S. and that means stating prices here in U.S. dollars, 'cause you know it will never happen the other way.

Otherwise all Canadian manufacturers would be changing their pricing every time the dollar moved; it's almost impossible to run a business like that and consumers would never stand for it.

NOS2Go4Me,Sep 27 2007, 07:55 AM Wrote:There was an article online from the G+M that states that realistically, at least "border towns" with identical cars should have started adjusting their prices already.

The dealers' excuse is that the selling price is based on previous allocation times (earlier in the year) and the amount they've already been invoiced for the cars.

So what, there are then potentially HOW MANY cars that may never be sold due to the rise in the loonie? I'm not buying that... no pun intended.

If you want new, go States-side. If you don't care about warranty, you're all set. More and more manufacturers are denying warranty coverage on new vehicles purchased in the US, so beware.
[right][snapback]249639[/snapback][/right]
2008 Fusion SEL MTX - DD1 * 2009 Fusion SEL - DD2 * 2007 Focus ZXW - R*I*P * 2004 Focus ZTW CD Silver - sold * 2004 Focus ZTW Black - sold * 2003 Focus ZTW Black - sold * 2001 Focus ZTW Gold - sold * 2000 Focus SE Wagon (ZTW option) - Black - sold * 2000 Focus SE Wagon (ZTW option) - Gold R*I*P

2003 Focus ZX5 infra-red Track Rat - R*I*P
2003 ZX5 CD Silver Track Rat - retired, but still in the driveway


New track rat: 2000 ZX3, Atlantic Blue * JRSC with lots more to come

* New Zetec crate motor - NFG - thanks Topspeed *
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#8
^--- that's sort of what I was thinking.

I remember when I bought my Cannondale umpteen years ago... price of the bike between when I started shopping and when I finally put the down payment on it went up by nearly $200 simply because of the fluctuation in the canadian dollar.

And my dealer could only give me the options of not ordering the bike, or ponying up the extra. That's what happens when prices are 'equal' across the border!

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#9
the trend of parity between the US and Canadian Dollar would have to be for 12 to 18 months or when all the inventory that was created before it was made at the one amount is cleared out before we will see the prices even out between the two countries.
'03 Focus SVT
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#10
People have been buiying Dodges/Chryslers down south (south of the 49th) for the lifetime Powertrain warranties and they're being told that they'll only receive the Canadian powertrain coverage length on the American vehicles.

The question is - is that stand legal or not?
Daily driver 1: 2007 Jeep Wrangler Unlimited Sport "S"

33" BFG Mud-Terrain KM2s, lots of Rough Country gear - bumper, 2.5" lift, swaybar disconnects, Superwinch 10,000lb winch, Detroit Locker in rear D44 axle, custom exhaust, K+N filtercharger, Superchips-tuned.

Daily driver 2: 2006 Subaru Legacy GT

COBB Stage 1+ package - AccessPort tuner, COBB intake and airbox. Stage 2 coming shortly - COBB 3" AT stainless DP and race cat, custom 3" Magnaflow-based exhaust and Stage 2 COBB tune.
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#11
Well ... there's legal and then there's practical.

Unless the purchase agreement (contract) the Canadian customer signs with the dealer specifically states that the Powertrain warranty is different for that customer, then in short it's not legal to deny warranty coverage. What about an American who moves to Canada - does his warranty change once he crosses the border? I think not.

But if the company flags your VIN for certain different warranty treatment - what are you going to do about it in a practical sense? Sue? ... that'll take forever and will cost ... and you might have to sue in the states ... and in the meantime you still need to maintain and repair your car and the dealer will do what the company tells them to.

Public scrutiny, media pressure, activist pressure, and class action lawsuits will make a difference in the long run ... in the meantime, if I was in the market I'd look at importing a very slightly used vehicle - problem solved.

NOS2Go4Me,Sep 28 2007, 09:28 AM Wrote:People have been buiying Dodges/Chryslers down south (south of the 49th) for the lifetime Powertrain warranties and they're being told that they'll only receive the Canadian powertrain coverage length on the American vehicles.

The question is - is that stand legal or not?
[right][snapback]249721[/snapback][/right]
2008 Fusion SEL MTX - DD1 * 2009 Fusion SEL - DD2 * 2007 Focus ZXW - R*I*P * 2004 Focus ZTW CD Silver - sold * 2004 Focus ZTW Black - sold * 2003 Focus ZTW Black - sold * 2001 Focus ZTW Gold - sold * 2000 Focus SE Wagon (ZTW option) - Black - sold * 2000 Focus SE Wagon (ZTW option) - Gold R*I*P

2003 Focus ZX5 infra-red Track Rat - R*I*P
2003 ZX5 CD Silver Track Rat - retired, but still in the driveway


New track rat: 2000 ZX3, Atlantic Blue * JRSC with lots more to come

* New Zetec crate motor - NFG - thanks Topspeed *
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