Topic: Car price class action from the FP

[tpl]

Yes!   but do they stand a chnace of the case being allowed to go forward?  I doubt it somehow.

Pricing of autos targeted
Canadian, U.S. manufacturers to face $2B class action over sales practices
Jim Middlemiss, Financial Post
Published: Wednesday, September 26, 2007

The major Canadian and U.S. auto manufacturers are about to be hit with a $2-billion class-action suit in Canada over their sales practices, which a law firm alleges artificially enhances the price of vehicles in Canada and dissuades consumers from crossing the border to take advantage of a stronger dollar to purchase or lease cheaper vehicles in the United States.

Toronto class-action law firm Juroviesky and Ricci is expected to file the suit on behalf of four Toronto residents who say they paid more for cars in Canada, after factoring in the exchange rate, than the comparable or identical cars cost in the United States. The suit covers consumers who bought cars between August, 2005, and August, 2007, a period when the Canadian dollar was rapidly appreciating. It also seeks $100-million in punitive damages.


More in the article itself

http://www.canada.com/nationalpost/financialpost/printedition/story.html?id=d6db47d3-ab3b-4e0b-bfe8-9c076c593bc2

[quadzilla]

Toronto class-action law firm Juroviesky and Ricci is expected to file the suit on behalf of four Toronto residents who say they paid more for cars in Canada, after factoring in the exchange rate, than the comparable or identical cars cost in the United States.

Why stop with cars.  This is stupid.

[The Mighty Duck]

It won't go forward. It may sound ridiculous to some, but Subaru of America and Subaru of Canada (for example) are different companies, and America and Canada are different markets.  The two companies are free to set prices for their market as they see fit...  there's no law that says that pricing must be equivalent between all countries on earth.  That's just silly.

[tpl]

I agree that it wont fly BUT the threat of it may persuade some mfrs to  look hard at their pricing IF AND ONLY IF  the $cdn stays up at >$US.95

[2latecrew]

I can't see them winning this. That's not to say it might not inspire some manufactures to make some kind of token gesture at reducing prices in Canada to show they are doing something.

[No H2O]

America and Canada are different markets.

Thats what Honda Canada told me yesterday when asked about the near $5000 difference in the base Accord LX sedan.

So what in "the" market justifies a 23% price gouge? Who cares if its a different market. Do the US models cost any less to make? In fact, isn't the Honda Accord made in Canada? And economies of scale don't apply...its not like Honda Canada is only selling 100 cars a year.

But they said they've been getting quite a few calls on the matter and that they are taking note. Proof of that will be in the pricing.

[Cord]

CADA has spent millions in legal fees in the still-undecided lawsuit brought by Americans 5 years ago when they had to pay more in the U.S.

Lawyers.

[Zombie]

If you consider the American and Canadian counter parts to be completely separate why do they discourage the cross border shopping? If neither had any influence on the other you wouldn't have American dealers saying that there not allowed to sell to Canadians anymore.

If it is cheaper to go across the border, buy a new car, pay the duty and taxes they should let consumer do it. Its supposed to be a competitive market but they are doing what they can to ensure larger profit margins in Canada. You as a consumer should have the right to purchase a product where ever you want as long as it is legal. It is your right and eventually this could force Canadian car prices down.

What I don't understand is why don't the smaller car manufactures like Subaru, Hyundai, Mutsu.. etc price there cars more competitively with there American counterparts eventually the other manufactures will follow suit or loose allot of sales.

[mdxtasy]

Toronto class-action law firm Juroviesky and Ricci is expected to file the suit on behalf of four Toronto residents who say they paid more for cars in Canada, after factoring in the exchange rate, than the comparable or identical cars cost in the United States.

Why stop with cars.  This is stupid.

  Nobody said lawyers were smart. 

[2latecrew]

If you consider the American and Canadian counter parts to be completely separate why do they discourage the cross border shopping? If neither had any influence on the other you wouldn't have American dealers saying that there not allowed to sell to Canadians anymore.

If it is cheaper to go across the border, buy a new car, pay the duty and taxes they should let consumer do it. Its supposed to be a competitive market but they are doing what they can to ensure larger profit margins in Canada. You as a consumer should have the right to purchase a product where ever you want as long as it is legal. It is your right and eventually this could force Canadian car prices down.

What I don't understand is why don't the smaller car manufactures like Subaru, Hyundai, Mutsu.. etc price there cars more competitively with there American counterparts eventually the other manufactures will follow suit or loose allot of sales.

While i don't like it its totally understandable to me whey Canadian manufactures price their cars higher here. BECUASE THEY CAN.

Manufacturers are stupid on many levels but pricing isn't usually one of them. Point of diminishing returns. They are going to price them as high as possible without losing enough sales to erode their total profit (and also to a lesser degree support a dealer/service network).

If you can sell 100 cars at 10 $ each or 70 cars at $15 each what would you pick? They had an "excuse" before with the lower $ and now the market is "set". In order for the price to adjust their must be some kind of action that cuases them to want to do it. That is a decrease in profits or pressure form key stakeholders (dealers).

neither thing has happened or likley will happen. Unless one manufacturer bites the bullet and does a mjor price reduction resulting in lost sales, masive numbers of people flood to the US (enough to really get the big dealers up in arms) they will and should do nothing.

[BJB]

Toronto class-action law firm Juroviesky and Ricci is expected to file the suit on behalf of four Toronto residents who say they paid more for cars in Canada, after factoring in the exchange rate, than the comparable or identical cars cost in the United States.

Why stop with cars.  This is stupid.

  Nobody said lawyers were smart. 

ouch, that hurts!

this lawsuit is ridiculous and won't go anywhere

[No H2O]

If you can sell 100 cars at 10 $ each or 70 cars at $15 each what would you pick?

I'd sooner sell 100 cars at $10 each because I know where my bread is buttered...servicing!

[froggy]

It sounds like a violation of the NAFTA agreement or the WTO rules to forbid the customers to buy the products in the US, provided they pay all the inferent duties, doesn't it?
The manufacturer is free to set the price of their goods at any leve for a said marketl, but preventing dealers to supply to non-resident (by direct threats such as cutting supply, voiding warranties,...) seems to go agaisnt the free-market philosophy...
Mind you, the americans get the same treatment as far as drugs are concerned, since importing meds from Canada is illegal... How are such measures legally enforced in a seemingly free-trade world 

[Zombie]

Mind you, the americans get the same treatment as far as drugs are concerned, since importing meds from Canada is illegal... How are such measures legally enforced in a seemingly free-trade world 

Drugs are not the same as cars because Canadian drug prices are regulated by the government (I think)

[carcrazy]

While I don't agree with the higher Canadian car prices, it's a free market and the manufacturers can set their prices the way they want. The consumer is also free not to buy their cars.
What I cannot understand though is, under the same free market concept, denying the US dealers to sell to Canadians. This is what the class action should be all about IMO and it should be justified.

[tpl]

I agree but I think that there are no grounds to go to court in Canada to prevent retailers in a foreign country  from discriminating against Canadians.  Toyota(BMW/Honda/Whatever) worldwide can just shrug its corporate shoulders and say... thats the way we do business, we support our dealer network worldwide.

I wonder tho' is a case brought in the USA would work.

[jcon]

I agree but I think that there are no grounds to go to court in Canada to prevent retailers in a foreign country  from discriminating against Canadians.  Toyota(BMW/Honda/Whatever) worldwide can just shrug its corporate shoulders and say... thats the way we do business, we support our dealer network worldwide.

I wonder tho' is a case brought in the USA would work.

I would say that this would fall under the WTO or at least that's the forum that I would investigate. I think its rather unlikely that a traditional court is going to hear this case in the US but maybe a WTO ruling may push the companies.

It would be bad publicity that would change these automakers minds, not a court (or whatever) ruling.

[tpl]

I was thinking of general anti-discrimination state laws  For instance, if you were a black Canadian would that end up forcing the US dealer to sell to you?

Or the Interstate commerce commision maybe    I dunno.  Mitlov might know.

[ghost]

if anything it further exposes to the public the car price disparity b/t US and Cdn.

[The Mighty Duck]

America and Canada are different markets.

Thats what Honda Canada told me yesterday when asked about the near $5000 difference in the base Accord LX sedan.

So what in "the" market justifies a 23% price gouge? Who cares if its a different market. Do the US models cost any less to make? In fact, isn't the Honda Accord made in Canada? And economies of scale don't apply...its not like Honda Canada is only selling 100 cars a year.

But they said they've been getting quite a few calls on the matter and that they are taking note. Proof of that will be in the pricing.

Obviously there is no magic "something" in the Canadian market that means cars are priced higher.  But pricing is based on demand, that is, what the market is willing and able to pay.  Simply put, our market has long been willing and able to pay higher prices than in the United States.  Why this is I've no idea - ask Canadians.  Now, with the dollar at par, I imagine many Canadians will be less willing to pay the prices set for our market, and this will cause the automakers to lower their prices.

But the price differential has nothing to do with the cost of building the car, or how many they sell.  It has everything to do with how, frankly, how ignorant Canadian cat buyers are.