$2 Billion Dollar Class Action Against Automakers for Canada-US Price Discrepencies

[Kitdy]

Remember how we were talking about this in the Canadian dollar = US dollar thread? Some people are pissed off and a group of Toronto lawyers are setting up a class action. Apparently, the phones of the office are running off the hook.

From Autoblog:

A few days ago we posted on the price discrepancy between identical vehicles sold in the U.S. and Canada. The discrepancy was always there, but became apparent when the value of the Canadian Loonie reached parity with the U.S. dollar recently. It was then that consumers couldn't ignore the fact that they were paying more for vehicles than their U.S. neighbors, up to 38% in some cases.

The Toronto-based class-action lawsuit firm Juroviesky and Ricci is taking up the case and expected to file a $2 billion class-action suit on behalf of four Canadians who feel that they paid more for their cars than they would have in the U.S. The class-action suit is open to any Canadian consumer who bought a new vehicle between August, 2005 and August, 2007 when the Canadian dollar was rapidly appreciating, but the prices of Canadian cars weren't adjusting.

From Canada.com:

The suit claims the defendants engaged in a "series of concerted actions, agreements and directives amongst each other" that had the effect of reducing competition in the U.S. and Canadian marketplace for new cars. They did so by attempting to control and limit the cross-shipping of new cars across the border, the suit claims.

Such actions allegedly include:

-forcing consumers to sign "no-export clauses" in their sales contracts to prevent them from taking vehicles home to Canada or the United States;

-failing to honour warranties from vehicles purchased on the other side of the border;

-penalizing dealers who sold vehicles, which were later exported, through the use of "chargebacks" or threatening to withhold inventory or popular styles and colour of vehicles;

-Threatening to terminate dealerships of Canadian dealers that didn't comply.

As I mentioned and as is directly applicable in my case as a Torontonian:

"Right now you should be able to go to Buffalo and get a fully loaded Camry for the mid-20s. In a Toronto showroom you're walking out at $36,000 or $37,000 and it [the dollar] is at par."

In response to the rising strength of the Loonie, Porsche has dropped prices 10% across the model range for all 2008 models, yet us Canadians are still getting screwed in many cases. Here are some Porsche prices:

2008 Boxster
2006/2007 MSRP: 63,600
2008 MSRP: 58,100
Current U.S. MSRP: 45,800

2008 Cayman
2006/2007 MSRP: 69,600
2008 MSRP: 63,500
Current U.S. MSRP: 49,400

2008 911 Carrera
2006/2007 MSRP: 100,700
2008 MSRP: 93,200
Current U.S. MSRP: 73,500

2008 911 GT3
2006/2007 MSRP: 147,300
2008 MSRP: 133,800
Current U.S. MSRP: 107,500

It is my belief that corporations in Canada may have to charge higher prices in Canada to make as much as a profit as they do in the US but surely an as high as 38% increase in price more than covers this. The automotive companies are gouging us and now they are getting their comeuppance for trying to stop Canadians from buying cars in the US.

[fisetdavid26]

Well that's great news. That's not fair for us paying more than the Americans to begin with, and 38% more is completely ridiculous. I hope we'll win the case.

[Egg Nog]

With the dollar being equal, it's more than a bit ridiculous that they be asking nearly 70 grand for a new Lotus Elise when they cost around 40 grand south of the border. That's the most extreme example I can think of.

And naturally the Elise is blacklisted in regard to US imports. Greedy dealerships are to blame.

[bmwpower]

How about all the canadian members hook up with the Us ones and start a smuggling ring? They buy it as americans and then sell it to us..there was an article in the toronto star about a dealership that buys porsches from the US, you buy the car, ship it up here, pay taxes for it and dealer fees, and still save 20 grand, that's obscene!

[kingofthering]

Whatever, at least Canadians can freely import R32 GT-Rs.

[fisetdavid26]

Whatever, at least Canadians can freely import R32 GT-Rs.

There are so many around it's almost incredible. I saw 5 GT-Rs in two weeks. And they sell for approximately $10k stock. Daddy wants.

[2ndclasscitizen]

Err, how do the Canadian import taxes and tariffs and sales taxes compare to those in the US?

[zeppelin]

Err, how do the Canadian import taxes and tariffs and sales taxes compare to those in the US?

Not sure about import taxes, but in Ontario sales tax is 14% (7% provincial, 7% federal) versus the States' 7% sales tax average. I know it's regional down there, but I've never seen a state's tax above 7% in my visits.

[2ndclasscitizen]

Not sure about import taxes, but in Ontario sales tax is 14% (7% provincial, 7% federal) versus the States' 7% sales tax average. I know it's regional down there, but I've never seen a state's tax above 7% in my visits.

Was that extra 7% tax factored in when these prices discrepancies were figured out? Were the differences in taxes and tariffs on imports considered as well?

[The_Canuck]

Porsche cuts Canadian prices: 'cannot ignore' cross-border difference
CP - Tue Sep 25, 01:05 PM EDT
By The Canadian Press

TORONTO - Porsche, facing an uprising among its well-heeled and well-informed clientele, said Tuesday it is lowering Canadian prices on 2008 models by an average of about eight per cent.

"We cannot ignore our customers and dealers in Canada who can look to the U.S. and recognize a substantial price difference," stated Peter Schwarzenbauer, president of Porsche Cars North America Inc.

Including improvements in equipment, he said, the typical price decrease amounts to 10 per cent.

"We listened to the market and did what is best for our customers in Canada."

Amid outraged tales of prices being higher in Canada than in the U.S. by 30 per cent or more as the Canadian dollar approached parity with the American currency, Porsche said its suggested base retail price for a new Boxster roadster is $58,100, compared with $63,600 for the 2007 model.

A base Cayenne SUV is $55,200, down from $60,100, while a Cayman coupe drops to $63,500 from $69,600 and a 911 Turbo gets marked down to $158,300 from $170,700

Porsche <3