$2 Billion Lawsuit against Car-Makers for "tinkering" with natural market forces…


I seem to be writing in two’s lately.  I wrote that guest article for the Million Dollar Journey on Convertible Bond Arbitrage as a two part series, I wrote two consecutive articles on illegal broker activities, and now this article follows on the heals of yesterday’s article citing a 10% drop in prices by Porsche on it’s Canadian lineup due to the strength of the loonie…

CarVintage.jpgYou see, a law-firm and four plaintiffs in Ontario have launched a Class-Action lawsuit against Honda, GM, Chrysler and Nissan alleging that they have "tinkered" with natural market forces in order to essentially gouge the Canadian consumer. As you know, even until this day, it would be cheaper to buy a car from across the border.  There are a few modifications necessary – like installing a daytime-running-light circuit, and modifying the odometer and speedometer to read in km and km/h respectively, etc. (I don’t know the actual and complete list – you’ll have to look that up if you are interested) which cost maybe $1,000 and after any other fees, you are still way better off buying most cars south of the border and bringing them up here.

It is alleged that the car companies tried to prevent this by penalizing American dealerships for selling to Canadians and also by not honouring warranty work done at Canadian dealership and service centres.  By not adjusting the Canadian prices of vehicles as the loonie started soaring, and further allegedly implementing these protocols they would’ve provided a mechanism to gouge Canadian customers.  Canucks would not be able to get a discount across the border without giving up peace of mind afforded by the warranties and they could only buy in Canada at drastically higher prices (in the 20%-30% range!).

CLICK HERE TO READ THE ARTICLE ON CBC’S WEBSITE 

If you found this article of interest, please consider subscribing to my RSS Feed. If you want to learn more about what an RSS Feed is, click here. Thanks!


 
Preet Banerjee
Preet Banerjee
...is an independent consultant to the financial services industry and a personal finance commentator. You can learn more about Preet at his personal website and you can click here to follow him on Twitter.
Related Posts