July 18, 2002

European Commission ‘grey market’ laws may have implications for North America

Toronto, Ontario – The European Commission introduced new laws today to stop car manufacturers from restricting ‘grey market’ sales. A press release issued by the European Commission noted that manufacturer restrictions on cross-border sales “…hamper what is a perfectly legitimate trade, and they will in future be prohibited.” The new laws are designed to allow European consumers to cross borders to buy cars.

Last October, the European Commission fined DaimlerChrysler (Euro) 71.825 million, and Volkswagen AG and General Motors Nederland BV were hit with similar fines for trying to restrict dealers from selling to foreign customers.

Brian Osler, President of the North American Automobile Trade Association (NAATA), applauded the changes. “It is completely unreasonable for manufacturers to restrict cross-border sales within a free trade zone like North America or Europe. Consumers should have a right to buy a car wherever they want, as long as safety and emissions standards are met.”

“If manufacturers get too aggressive in fighting the grey market in Canada and the U.S., they will end up facing similar laws here too”, says Mr. Osler. “Consumers are fed up with manufacturer price fixing. They want the grey market to bring them identical cars at lower prices.”

Connect with Autos.ca