$2B lawsuit accuses carmakers of keeping Canadian prices high

[Ilpav]

http://www.cbc.ca/money/story/2007/0...n.html?ref=rss

Canadian car buyers have been the victims of an illegal plot by automakers to inflate the prices of cars in Canada and discourage cross-border car buying, according to a $2-billion class-action lawsuit.

The suit, filed by the Toronto law firm of Juroviesky and Ricci LLP, accuses the automakers of conspiring "to lessen competition and to unreasonably enhance the price of new cars sold in Canada," according to the statement of claim.

Most of the big North American and Japanese vehicle makers are named as defendants in the suit, along with the Canadian Automobile Dealers Association and its U.S. counterpart, the National Automobile Dealers Association.

The suit was filed on behalf of four Toronto residents who said they paid much more for their vehicles in Canada than identically equipped models in the U.S. The statement of claim alleges that the "price for identical product from U.S sources could be 25 to 35 per cent lower on average than in Canada" after adjusting for the exchange rate.

The suit gives a number of examples of recent large price differences in the same vehicles when the Canadian dollar was trading above 98 cents US:

* A Chrysler Grand Cherokee Laredo that was advertised for $29,215 in the U.S. and $36,215 in Canada
* A Honda Odyssey Minivan that was advertised for $25,645 in the U.S. and $33,333 in Canada
* A Range Rover Sport that was advertised for $58,500 in the U.S. and $78,300 in Canada

The lawsuit covers anyone who bought a vehicle in Canada between August 2005 and August 2007. It requires court approval to get certified as a class action.
Continue Article

Among other things, the lawsuit alleges that the defendants reduced competition by:

* requiring buyers to agree not to export their vehicles
* failing to honour warranties in Canada if vehicles were bought in the U.S.
* threatening or penalizing dealers who failed to follow the automakers' rules

The statement of claim's allegations have not been proven in court. In addition to $2 billion in general damages, the suit seeks $100 million in punitive damages.

A spokesperson for one of the defendants, the Canadian Automobile Dealers Association, told CBCNews.ca he hasn't seen any documentation and wouldn't comment on the lawsuit's allegations.

With the Canadian dollar near parity with the U.S. greenback, it has become easy to compare prices of similar vehicles on each side of the border.

A survey by automotive consultant Dennis DesRosiers earlier this month showed that the price gaps among smaller cars were not large, but that at the luxury end, Canadians were paying $11,000 to $13,000 more for the same vehicle than U.S. buyers were.

On Tuesday, Porsche became the first automaker to reduce its 2008 Canadian sticker prices to reflect parity. It chopped the price of its Cayenne model by almost $5,000.

"We cannot ignore our customers and dealers in Canada who can look to the U.S. and recognize a substantial price difference," a release from Porsche Cars North America said.

One of the lawyers who filed the suit was less than impressed by Porsche's action. "Their actions are too little, too late," Henry Juroviesky told CBC News. "I still don't think that their price decrease will account for the differential in absolute economic terms."

Five years ago, when the Canadian dollar was worth 62 cents US, the cross-border price differential was reversed. Canadian car prices then were often thousands of dollars cheaper than U.S. prices, after the exchange rate was factored in.

It must suck to run a car company's financial sector right now. You never know when the Canadian Dollar is gonna drop again; it'll be so complicated. And they have to deal with all these lawsuits.

[Wizegui]

Goddamnit it's about time. Canadian car prices are too high compared to their similarly specked American counter-parts

[cdbob]

THANK GOD, these prices were really getting out of hand.

[Shawn]

I totally sympathize with what's going on here... I've been whining about this for a few months and I'm sure there's evidence of it in my posts but it just hurts to be a poor consumer in Canada right now.

You actually feel sorry for the scumbag corporate people? Why do I need to pay an extra 20 percent for my car when a friend who lives 1.5 hours away in Seattle can get it for so much cheaper? It's the same story with any goods you wanna buy nowadays, but considering cars cost so much then it becomes an issue. I mean I don't care if a bag of chips costs a buck in the US and $1.25 in Canada, but when this price difference makes me unable to buy a class of car I want and can technically afford, then that pisses me off.

I guess I'm eligible for this if they win since I bought a car this April? Do I have to apply to get some money or what? The article is a little unclear... not that it really helps me out much now. It's not like I overcame the price gap and bought what I wanted and now I get some money reimbursed... I didn't get the car I wanted so this is pretty useless to me.

It's kinda funny though to see that so soon after I bought a car things are starting to unravel and consumers are waking up to the truth. I've been complaining since April but I didn't think anyone else would care.

P.S. When I first read the title I thought it said '$28 dollar lawsuit'.

[Hidden_Hunter]

We get shafted on cars here as well (currency conversion + taxes) still make them cost far more than they do in the US

[godlikepagan]

^^^Was just gonna say that about England. When i went there last year I was shocked. The cars are basically the same price in units as they are in the US, just in pounds

[NAIDANAC A]

Ya but they are in ENGLAND, is that a 20 minute drive from America?

[Shawn]

^ Yeah, that's the thing I always say when this discussion comes up about Canadian car prices not being so bad compared to Europe. The fact is that Canada is for better or worse basically the US with a few small differences... you can't compare the US and Canada and then go and compare the US and England... it really is like comparing apples and oranges.

The fact is that our consumer goods market is basically that of the US... I mean come on, more than half the car commercials I see are for America and advertise their cheap prices and rates.

But what really gets me is that you can just go and buy a car in the US and bring it over with little hassle. How easy is it to buy a car in the US and ship it to Europe to save money? Then these car companies realize what the poor customers are having to do and they put all kinds of loopholes in your way in terms of warranty and service to try and dissuade people from importing US cars so they can enjoy getting their 20-40 percent extra profit.

It's just pure greed; there's no other reason why things have to cost so much more in Canada... fine, we're a socialist nation and have free health care and that means taxes are higher here... but it's not the tax that's making cars so expensive here, it's just that MSRPs are so much higher. When you hear people from Europe or Asia complain it's often because of monstrous car taxes and greedy governments, not greedy corporations.

[I'm not Takumi]

I feel no sympathy for the canucks. After all, they can get some good shit from Japan, yet we Americans can't due to litigation Bullshittery.

[BlaRo]

Originally Posted by I'm not Takumi

I feel no sympathy for the canucks. After all, they can get some good shit from Japan, yet we Americans can't due to litigation Bullshittery.

Well we DID get the Lancer EVO and the GTO, and they didn't...

[thedguy]

So the Attorney handling this is going to make $1.5B while the people who actually got ripped are are going to get $100?

[skr]

I think the companies were really happy about the exchang rate change during the last few years and hoped that nobody will notice.
How hard is it to get a US car into Canada? In the Europeen Union it's quite easy (there are also quite some differences but after the Euro was introduced the differences seem to shrink).It's a bit harder to get a US car though since you have to pay a customs tax, but with the greenback on an alltime low it still makes a lot of sense.

[GM_IV]

Originally Posted by skr

How hard is it to get a US car into Canada?

Depends what it is, for some reason some cars are just not allowed into this country. Scion tC, Mitsubishi Evo and Pontiac GTO are some of the most notable. Other than 15+ year old cars I am not aware we get cars that Americans don't get. I laugh at the notion we get "good" Japanese cars the R32 Skyline GT-R is really the only notable Japanese car we can get that American's can't get, anything else newer than 1992 go to America unless for some reason you want an Echo hatchback. Canadian buyers are stingy with money which is why the Mk IV Supra died so quickly here(1995).

[Mopar Man]

Yea its about god damn time, I hate how the cars built in Canada, such as the Dodge Charger, Chrysler 300, and Dodge Magnum are more expensive here, where they are BUILT, than in the US.

[Shawn]

It's not very hard at all... just fill out some forms and pay some duties and stuff. There are even companies that do this for people for a relatively modest sum.

But this still doesn't make it okay that cars are such a ripoff in Canada now. Not everyone's going to go the import route. For one a lot of people are still oblivious about the price differences, and I'm sure there are others who would stay away from importing just because they think it's risky. Plus you have to deal with the fact that the US uses MPH and we use KPH and other units are different if you have an on-board computer or whatever.

The reason I didn't get a US car is because I needed to be able to lease or finance the car and obviously you can't finance a car in the US and just export it.

My dad, though, bought a US car and it's working out fine for him... but in order for Mercedes to honour the US warranty in Canada they required his car to get retrofitted with a few things. Like the starter button in the US says ON|OFF but in Canada it's just a logo to accomodate French, so he had to get the button changed to the logo one to get his warranty coverage here. They also swapped his dials for kilometre ones and some other stuff I don't remember. All in all, it cost about $1200 for the whole conversion. Not a bad deal but these companies are doing everything they can to stop the importing of cars from the US.

Originally Posted by skr

How hard is it to get a US car into Canada?

[epp_b]

Well, it's high time this happened! I'm tired of being ripped off for anything and everything to do with cars in this Country.

Not a bad deal but these companies are doing everything they can to stop the importing of cars from the US.

Gee, you think that, perhaps, if they'd stop ripping us off, the importing might stop?

[jayhawk]

Originally Posted by BlaRo

Well we DID get the Lancer EVO and the GTO, and they didn't...

I know quite a few Canadians who hopping mad they didn't get the GTO, and even now, cannot import them!

To a car enthusiast, that is just plain sick and wrong. Same goes for the EVO, even though it is my arch rival....

[Shawn]

Of course, that's the point I was making. These stupid car companies wanna have their cake and eat it too, well they can't. Either stop ripping us off or in the very least let those brave and adventurous enough to bring over a US car.

Originally Posted by epp_b

Gee, you think that, perhaps, if they'd stop ripping us off, the importing might stop?

[Shawn]

Yeah I have no idea what that Takumi is on about... one car I can think of that we can buy here but not in America is the Smart. That's about it, and who wants the Smart?

But on the flipside the US gets quite a few cars we don't... such as Scion and I guess Alfa Romeo soon enough.

Originally Posted by jayhawk

I know quite a few Canadians who hopping mad they didn't get the GTO, and even now, cannot import them!

To a car enthusiast, that is just plain sick and wrong. Same goes for the EVO, even though it is my arch rival....

[otispunkmeyer]

Originally Posted by godlikepagan

^^^Was just gonna say that about England. When i went there last year I was shocked. The cars are basically the same price in units as they are in the US, just in pounds

tell me about it, doing straight dollars to pounds a Z06 is the bargain of the damn century here if we could buy it at that price. what is it like $50,000 or something, in todays climate thats around £25-26k....bargain, thats about what a Nissan 350z costs here or a half decenty spec'd audi tt.

but then again, its not so bad because i think many times in comparable jobs between the US and UK we get paid the same units....just ours is in pounds, so really you could say its even stevens.

you make $60,000 a year and own a $30,000 BMW. we make £60,000 and own a £30,000 BMW. its all the same when it comes down to it, even though when you convert to dollars we're making twice as much as you and paying twice as much again for the car.

and man this new apple keyboard is a joy to type on