Wednesday, September 19, 2007

Price Gouging by Auto Manufacturers

Submitted by Ron Tanguay
Responses requested
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My friendly Toyota dealer in Bellingham, Washington has confirmed to me that he is now prohibited by Toyota USA from selling to me the Prius I want because I live in Canada.

Prior to this prohibition, sales of new cars to Canadians had grown to 60% of his volume. He -- and I -- are understandably irate with Toyota (and with other automakers like GM who restrict their dealers in this way). This dealer hinted at possible or pending legal action to challenge the automakers on this point.

Are you aware of any such action? Can we as consumers join in or otherwise lend our support to any such actions? Are you aware of effective ways around these unfair and possibly illegal maneuvers by the automakers? They appear determined to gouge Canadians by setting the prices they charge their Canadian dealers much higher than the prices they charge their US dealers.

From a recent CBC News article, I am also aware of a New York State Toyota retail dealer who was (and is perhaps still?) selling significant numbers of new Toyotas to Ontario and Quebec Toyota dealers who are benefitting from lower prices than they are able to get from Toyota Canada!

I look forward to hearing from you.

5 comments:

Anonymous said...

Ron,

Toyota has tried pulling something like this before in Canada. You can read up about what happened back in 2003 at this link;

http://www.cbc.ca/disclosure/archives/030211_notebook.html

It includes links to Canada's competition Act, including direct links to "Conspiracy", "False or misleading representations" as well as "Price maintenance".

All of the information that was discovered was turned over to the federal government. There is a link there called "Information to Obtain a Search Warrant".

The higher prices that are always being charged by Toyota has to do with their Access program.

I don't know the results of this investigation by the federal government, but your best bet is to buy from a different manufacturer. Until they realize the losses they are going to occur from hampering consumers to purchase at reduced prices, or if there is a class action suit brought against them not much will change.

I was looking to buy a Toyota back in 2004 until I came across this information. I chose to by from Volkswagen instead after this came to my attention, and I sent an email to Toyota informing them of my decision.

I empowered myself with the infomation I attained and utilized it to shop smarter.

I hope that you are able to do the same!!!!

Chris said...

I find it appalling that we are even forced into having this conversation. In 2007, in North America, with free trade and all that nonsense why should Canadians have to bother crossing the border, putting sales commissions in American dealers pockets, having to fight for warranty work? How uncompetitive, how monopolistic? I'm not one for government intervention but think that the regulatory bodies need to look at this and fast. The auto companies also need to launch a massive PR campaign if there is any validity to their actions whatsoever. In the absence of any such defence they should immediately price their Canadian vehicles at a level that makes them competitive with what American consumers pay. I hate feeling like an impotent Canadian being taken advantage again!!!

gonson said...

Yep - experiencing the same pain with Audi at the moment - to buy an Audi S4 there is a $25,000 price differencial.

Audi in Vancouver suggested I try South of the border. He did however add that Audi Canada plans to introduce new rules that they won't recognise warranties on cars imported from the US.

Audi in Bellingham - the guy said he would lose his job if he sold an Audi to someone with a Canadian licence.

Audi in Seattle - does not have a problem.

It is all very confusing. The problem is they are trying to differentiate markets but there are no barriers to entry....so the car manufacturers are trying to artificially create them.

Anonymous said...

Remember folks, these US dealers are business persons first --- and Toyota dealers second.

Provide them a US address - chances are they'll write up the deal.

And if they won't budge, give a US resident [IE: a friend or relative, obviously] your quid and have them purchase the vehicle in their name.

Even if you end up paying the state sales tax before having the title transferred, you would be looking at a state tax often as low as 5% in many jurisdictions.

So - what odds?

What I'm saying is this: if you're looking at saving...say 10 grand on your purchase and you end up paying the state tax to make it happen -- you've still saved 8,500 bux.

DO IT!! MAKE IT HAPPEN!! And then tell everyone about it!

With sufficient pressure exerted upon them, the Canadian divisions of the various automakers will have no choice but to correct this ridiculous disparity.

Anonymous said...

While trying to buy a Audi Q7 4.2, I discovered thet the price of the vehicle is $16,500 dollars cheaper in the US.

The way to deal with this price gouging by the foreign car manufacurers is to start a national campaign to boycott their products