Class Action Lawsuit Charges US Auto Dealer Conspiracy Against Border Crossing Canadians

Glenn Swanson
by Glenn Swanson

CTV reports that a class action lawsuit suit filed in Ontario Superior Court claims carmakers and dealers conspired to violate “competition and consumer protection laws.” Lawyer Henry Juroviesky claims US car dealers suppressed cross-border shopping by limiting supply, inflating prices and voiding warranties. In the past, dealers “used the large gap between the Canadian dollar and U.S. greenback to justify the higher prices in Canada,” says Juroviesky. "Now that the dollar is at parity they can't use that cloud… to mask what they're doing.” Meanwhile, a recent study says the problem is going away. "In all of our 'popular' segments… the price gap between Canada and the U.S. narrowed in 2007," says Dennis DesRosiers, President of DesRosiers Automotive Consultants Inc. of Richmond Hill, Ontario.

Glenn Swanson
Glenn Swanson

Glenn is a baby-boomer, born in 1954. Along with his wife, he makes his home in Connecticut. Employed in the public sector as an Information Tedchnology Specialist, Glenn has long been a car fan. Past rides have included heavy iron such as a 1967 GTO, to a V8 T-Bird. In between those high-horsepower cars, he's owned a pair of BMW 320i's. Now, with a daily commute of 40 miles, his concession to MPG dictates the ownership of a 2006 Honda Civic coupe which, while fun to drive, is a modest car for a pistonhead. As an avid reader, Glenn enjoys TTAC, along with many other auto-realated sites, and the occasional good book. As an avid electronic junkie, Glenn holds an Advanced Class amateur ("ham") radio license, and is into many things electronic. From a satellite radio and portable GPS unit in the cars, to a modest home theater system and radio-intercom in his home, if it's run by the movement of electrons, he's interested. :-)

More by Glenn Swanson

Join the conversation
4 of 26 comments
  • AGR AGR on Sep 27, 2007

    In Ontario its 8% PST not 7. It gets interesting with hi line vehicles that have to pay the "Green Levy" which is federal, and Ontario Gas Guzzler. It goes: price of vehicle+Green Levy+Gas Guzzler=Total+6%GST+8%PST=price taxes in. Gas at $1.00 per litre = $4.00 per gallon.

  • Ryan Knuckles Ryan Knuckles on Sep 27, 2007

    mikey: Just as well. I prefer to be hot than cold anyway. Here, in SE Missouri, we get all of it. 0 degrees (F) in the winter, 110+ in the summer, 90% humidity, near torrential rains in the spring, and a beautiful fall. We actually have a saying.."Don't like the weather? Wait 10 minutes." I would love to work for in the automotive field, but I'll have to move pretty far to do it. I worked with PLCs, robots, lasers, etc. at old internship (I'm a young buck - 24 y/o), which was a blast. Where can you find more of that stuff than in the automotive field of manufacturing?

  • Rtx Rtx on Sep 27, 2007

    "dean" had it right. The only reason that dealers can charge more for cars in Canada is that there are enough suckers walking through the door with pen in hand willing to sign up for any 0% or 2.9% BS that the manufacturers can dream up. There are many here who are "car poor" .....people who have that hulking Silverado in the driveway purchased at 1.9% over 5 or 6 years with 2 grand down....and $700/mo. to cover vehicle and insurance......oh...forgot about the $100 fill-up once or twice a week. If there are enough people here that are willing to squander a mortgage payment on a depreciating asset then the dealers will continue to have their way. I have owned a couple of new vehicles and will never buy new again....its only new until you cross the curb at the dealers lot then you are out 10 grand in depreciation and taxes. I buy 2 yr old vehicles @ 55% of new and sleep better at night. But.....somebody has to buy new and if you're that person don't get gouged by a Canadian dealer now that our $ are at par. Try buying a current year demo from an American dealer. You can pay your kids college tuition for a year or two on what you will save.

  • Tomot Tomot on Sep 28, 2007

    I think its time to get some commonly used terms properly defined, in this forum. I don't know what this exact law suit alleges, or if someone in the media simply used the term Dealer, when it should have been Auto Manufacturer. Its not the Mercedes Benz Dealer in Bellingham or Seattle that does not want to sell a new car to me. Its the policy of Mercedes Benz in Germany that dictates to Mercedes Benz US who their Dealers can sell cars to. The Dealer in the US cannot sell a Car to me because I'm not an American Resident. The Dealer can lose his or her license should they sell cars from that Manufacturer or face a huge fine. A friend of mine a retired Import Dealer her in Canada was fined $100,000.00 by Toyota for selling Cars to US customers several years ago. Furthermore it should be remembered that Canada represents only about 2 percent of the worldwide car sales market. the US market represents about 20 percent. Hence these multinational Manufacturers have a lot of clout. They don't care if they have to pull the plug on a Canadian or US Dealership. The following is a quote from a former Toyota employee, at another forum: There are different levels of management here. Take the Toyota example, with three levels of management in the equation: Toyota Japan, Toyota USA and Toyota Canada. Japan has the world-wide balance sheet, so every sale makes an impact on the total bottom line for them. They don't care where the sales come from, and will direct the cars to wherever they believe they will be sold. Both USA and Canada operate as their own business units. They have their own targets and report financially to Toyota Japan as separate units. They each want to show as much profitability as they possibly can to the parent. Toyota Japan sets vehicle allocation world-wide. They decide to send 100 units to the US and 10 units to Canada. But the US dealers then sends 10 of their hundred units to Canada because the exchange rate today makes it more profitable for the individual dealer. Those 10 sales appear this year in Toyota USA's balance sheet, but Toyota Japan sees where the cars went, and next year they send the US 90 units and Canada 20 units. This puts the sales into Canada's balance sheet for each subsequent year unless Japan decides to change the allocations. The big loser is USA, who lost 10 vehicles in the allocation. So making a quick buck on fluctuating currency exchanges can cost in the long run. If the Canadian dollar dropped to .75 US next year, Toyota Canada will still have the extra allocation of vehicles and will still be able to generate profit on them. Toyota USA has nothing and their profit drops. The bottom line; large multinational companies decide how you and me the average consumer are going to spend our after tax dollars. After all they paid for that clout through their lobbying efforts and campaign contributions to those people running for public office, naturally those also happen to be the same people we think we elect.