Manufacturers' Policies Frustrating Importers

Special Meeting For Importers Sponsored by NAATA

The North American Automobile Trade Association (NAATA) is holding a special meeting on July 17, 2008 at 2pm at the Credit Valley Golf & Country Club boardroom in Mississauga, Ontario.

If you have been affected by manufacturers' policies that have forced you to pay exorbitant costs or entirely prevented you from purchasing a certain vehicle from the US, this meeting is targeted to you.

To participate in the meeting or for more information, please contact Brian Osler at brian@naata.org.

Transport Canada Not Responsible For Auto Manufacturers Importing Policies

Manufacturers Ultimately Determine Whether Vehicles Comply And How The Vehicles May Be Modified Should They Not Comply

Submitted by : Mr. Jeff Newton - BMW Importer

Below is the response received from the Office of Honourable Lawrence Cannon, Minister of Transport, Infrastructure and Communities to Mr. Newton's inquiry:

Dear Mr. Newton:

Your Member of Parliament, Mr. James Moore, has forwarded to the Honourable Lawrence Cannon, Minister of Transport, Infrastructure and Communities, a copy of your e-mail of February 15, 2008, regarding the importation of vehicles from the United States. Minister Cannon has asked me to reply on his behalf.

By way of background, I should first mention that the Motor Vehicle Safety Act (MVSA), in effect since 1971, regulates the manufacture and importation of motor vehicles and motor vehicle equipment to reduce the risk of death and injury, and damage to property and the environment.

The MVSA requires that all vehicles imported into Canada comply with the Canada Motor Vehicle Safety Regulations and associated Canada Motor Vehicle Safety Standards (CMVSSs). However, subsection 7(2) of the MVSA provides an exception whereby vehicles purchased in the United States that are not in full compliance with the CMVSSs, may be imported into Canada, provided the vehicles were originally manufactured to comply with all applicable U.S. Federal Safety Standards, and provided they can be modified to comply with the CMVSSs. In addition, once modified, the vehicles must be inspected by a designated authority of Transport Canada. In this regard, in 1995, Transport Canada contracted with a private company to establish the Registrar of Imported Vehicles (RIV) program to develop and operate a system of inspection and certification of vehicles imported from the United States.

As a convenience to both importers and manufacturers, the RIV posts a List of Vehicles Admissible from the United States on its website at www.riv.ca . The list includes many 2008 model-year vehicles that are admissible for importation. It is the manufacturers' responsibility to certify that vehicles comply with Canadian safety standards or to certify that the vehicles can be modified to meet these standards. The manufacturers are also responsible for providing and updating the admissibility information. I should emphasize that the list is not mandated by law; rather, it is an administrative tool meant to assist in the processing of imported vehicles. Although manufacturers are not obligated to submit admissibility information, most do so voluntarily, since otherwise, they would have to deal with importers on an individual basis.
Because the information provided by manufacturers varies periodically, prospective Canadian importers must exercise caution and inform themselves thoroughly on all aspects of purchasing a vehicle in the United States, including warranty coverage, before purchasing a U.S. vehicle. Any inquiries about the accuracy of the information the List contains must therefore be addressed to the manufacturers directly.

For a variety of reasons, some manufacturers are reluctant to provide vehicle admissibility information to importers, the RIV and Transport Canada. In addition, some manufacturers are charging a fee to importers who ask for a letter specifying that there are no outstanding recalls on the vehicle they wish to import. Transport Canada has no authority to dictate to those manufacturers when and how this information ought to be supplied, or to request that they provide the recall information free-of-charge, since the manufacturers are normally located in the United States, and the vehicles in question are initially produced for the U.S. market.

I should note that neither Transport Canada nor the RIV has access to the recall information of manufacturers that produce vehicles for the U.S. market. The information in the department's database relates only to vehicles produced for the Canadian market and originally sold in Canada. In many instances, the Canadian company and the U.S. company are two separate entities and do not share recall information. Therefore, it is important to firmly establish, in a reliable manner, that there are no outstanding recalls on vehicles purchased at the retail level in the United States and imported into Canada. The verification is specific to each particular vehicle and is performed by manufacturers using the Vehicle Identification Number.

There have been comments that some companies have refused to honour their U.S. warranties in Canada, have instructed their U.S.-based dealers not to sell to Canadian customers, or have delayed-or not responded at all-in providing a determination regarding the admissibility of their U.S. vehicles after September 2007. There have also been comments on price differences and what are alleged to be captive markets. I must emphasize that the MVSA does not mandate or regulate warranties, nor does it deal with the pricing of vehicles by manufacturers and importers. All of these issues pertain to company-specific policies, and these companies must be contacted directly to obtain additional details and clarifications.
In some cases, manufacturers are insisting that the modifications necessary to activate or install daytime running lights be performed by their authorized dealers and, in some cases, are also insisting that the instrument cluster be changed. The MVSA only requires that the importer ensure that the vehicle is made compliant with the applicable safety standards and is not specific as to who must do the work. However, the basic principle of compliance under the MVSA is a regime of self-certification whereby the manufacturer ultimately determines whether its vehicles comply with the CMVSSs and how the vehicles may be modified should they not comply.

A manufacturer can determine that various components must be replaced, and that such work can only be done by a qualified authorized dealer in order to ensure compliance, and Transport Canada is not in a position to challenge such a policy. The cost associated with such modifications is also beyond the control of Transport Canada. Concerns regarding such costs would be best addressed to Industry Canada's Office of Consumers Affairs or to the appropriate provincial/territorial Ministry of Consumer Affairs.

I trust that the foregoing has clarified the Minister's position with respect to this matter. Thank you for writing.

Yours truly,



Andrew Walasek
Special Assistant - Ontario and Western Canada


c.c. Office of Mr. James Moore, M.P.

BMW Imposing Fines on US Dealerships

Just when we had thought that we'd heard it all, a subscriber informed us today that "BMW dealers in the US are being charged $2,600 for each new car they sell that is exported unless it is registered, taxed, and titled in the US first."

And while BMW is penalizing its US dealerships, apparently "pre-owned cars to not attract the same fines as new ones."

So if you've been wondering what prompted the sudden change of heart at the BMW dealership in the US, wonder no more. BMW is playing hardball and the dealerships are fearful of suffering the wrath and having their profitability eroded.

The bigger question remains; who is going to buy the expected influx of pre-owned inventory on the US car lots? You guessed it...the Canadian BMW dealerships who will be glad to sell it to you at inflated prices.

If this policy upsets you, get the word out by contacting the media. If you are caught in the BMW obstacle course, don't suffer in silence; spread the word about these practices. Your stance today will project others in the future, or at least knock a little sense into the manufacturers.

30 Days Left To Import A New Subaru From The U.S: New Directive Aimed At Stopping Sales To Canadians

If Subaru of America, Inc. has its way, January 3, 2008 marks the date when a new directive to stop exports to Canada without express written consent comes into effect.

The reason they give to their US dealerships is that they should concentrate "on selling within their area of responsibility."

And while late model and pre-owned vehicles are also cheaper to purchase in the US, this edict flies in the face of NAFTA.

Here's what we suggest you do if you are in the market for a Subaru:

1. Purchase it within the next 30 days when you won't be subjected to surreptitious maneuvers such as using US post office box addresses or having a friend who is a US resident purchase the car for you;

2. Take a moment to sign the petition at www.carswithoutborders.com to demand fair treatment for the Canadian importer;

3. Raise your concerns with your MLA, even if you are not a Subaru purchaser. Your stance today may protect your right to purchase the car of your dreams tomorrow.

Importing A Car?: Canada Customs Is Offering Free Seminars

Dear Readers:

Now you can register online for a free seminar hosted by CBSA to learn the process of importing a car from the US.

"There will be importing seminars for the Canadian public who are interested in learning the process of importing cars into Canada and we're providing them at no charge," CBSA trade compliance officer Alan Barrados said. See complete article at http://www.cbc.ca/consumer/story/2007/11/26/bc-carseminars.html#skip300x250

CBSA will advise you to " check the Transport Canada list online before heading south to shop."

Cars Without Borders: Making Sense Of Transport Canada's Stance

Dear Readers:

In recent weeks we have witnessed an unprecedented volleying of responsibility between Transport Canada, RIV and the auto manufacturers. The issue in question has been the anti-theft device (the immobilizer) standard that was planned for introduction on 2008 vehicle models.

With five years to prepare for the introduction of the new policy, to say that this situation has been mismanaged is an understatement. More that 3,000 people, have been caught in the "net".

The net spans from September 1, 2007 to November 1, 2007, a full 60 days where Transport Canada overlooked its responsibility to roll out the policy and market it accurately and proactively to potential importers. Now, instead of heading the pleas of these same folks to honour its website information and its employees' well meaning but downright misguided assurances, Transport Canada has chosen to not only uphold this policy, but to enforce it retroactively!

A new website has emerged to support those caught in the borderless confines of the importing process. Appropriately named Cars Without Borders, the website has been built and is being supported by volunteers and advocates who are seeking justice from a government who has turned a blind eye to these 3000 importers.

We as Canadians who are exercising our right to import vehicles under the NAFTA agreement, have a choice. Sit back and let the bureaucrats who aren't forced to hold their newly acquired vehicles in limbo run amok with our dollars and their double-speak OR speak up for those who are in the unfairly caught in the midst of this debacle and have tens of thousands of dollars to lose.

There is a democratic process in this Country and we urge you to exercise your rights. Visit Cars Without Borders and let them know how you can help.

Importing a 2008 Model Vehicle: CMVSS114 is here to stay

Dear Readers:

After repeated calls to RIV we understand that CMVSS114 (the immobilizer policy) is here to stay. This news comes as a surprise and a shock to us at UCanImport and we suggest that you contact your MP if you have purchased a vehicle and have a Bill of Sale dated earlier than November 1, 2007.

Below is a sample letter that was obtained and supplied by a UCanImport Subscriber. This letter was generously supplied by an extremely frustrated and out-of-pocket importer.
It was delivered to his MP who in turn delivered it to Minister Cannon.
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November 15, 2007

Hon Lawrence Cannon
Minister of Transport, Infrastructure and Communities
House of Commons
Ottawa, ONK1AOA6

Delivered by Hand

Dear Minister,

I am writing to you regarding a situation that has been brought to my attention by a constituent who has encountered difficulty during the importation of a vehicle he purchased in the United States. A copy of his letter is enclosed.

As you will read in his letter, Mr. ***** purchased a vehicle in the United States on November 5, 2007 with the intent of importing it into Canada. He had first confirmed that same day that the vehicle was considered “admissible” by Transport Canada. He sent the necessary documentation to the border and waited the required 3 days. On November 9th, he checked to ensure his vehicle was still admissible to Canada and found that it was now considered inadmissible.

Is there a mechanism in place that would allow Mr. ***** to import his vehicle into Canada considering that his vehicle was not on the inadmissible list on the day he purchased it and he went to great lengths to ensure he was complying with government regulations?

If there is no mechanism in place that reasonably addresses Mr. ****’s bureaucratic predicament, I request that you have one put in place. It could be as simple as a vehicle is considered “admissible” to Canada if it was not on the “inadmissible” list the day before the date of purchase. Another option could be that a vehicle is “admissible” if it is imported within 30 days of being added to the “inadmissible” list.

I appreciate your attention to this matter.

Sincerely,

,MP

Encl. 1

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Importing a Honda CRV from the US into Canada: Comments from UCanImport Subscriber

Submitted by UCanImport Subscriber:

" I am bit puzzled to hear that Honda is not letting CRV 2008 models to be imported from U.S.A. As per the NAFTA Free Trade agreement the trade barriers are lifted between U.S.A., Canada and Mexico. Then why is it Honda has put restrictions on Imports of 2008 CRV vehicles. If Honda is doing that, then they are violating Free Trade Agreement, hence the violators must procecuted. I have spoken to my M.P. about this and has asked him to question this in the parliament. I have spoken to Honda Canada and they say that they have no restrictions whatsoever on impotation of any Honda vehicles. I think it is the Dealers have put this restrictions on the imports from U.S.A."

Response by UCanImport:

You may consider sending this letter to your MP and expressing your frustration with the Honda and Toyota ban on new automobiles as well as the surprise immobilizer policy.

Buying your next vehicle in the US: "Free Market is not So Free for Consumers"

The question that many importers are asking at the moment is why, despite NAFTA, the only group to reap the rewards from the free trade policy has been the corporations who manufacture and sell automobiles. Why are consumers facing roadblocks every time they try to take advantage of the reciprocal free trade arrangement between the US and Canada.

The Montreal Gazette explores this question further in light of the immobilizer policy that is preventing Canadians from completing their importation from the US.

To read the article, click Free Market is not So Free for Consumers

Class Action Law Suit Filed Against Auto Manufacturers

Four Toronto residents have filed a $2 billion lawsuit against the Canadian and U.S. divisions of General Motors, Honda, Nissan and Chrysler.

Written by David Friend from The Canadian Press and entitled "Lawsuit Alleges Automakers Conspired to Boost Canadian Prices", this article claims the auto industry is engaged in a price conspiracy to artificially maintain car prices in Canada. Examples of differences in MSRPs between the two countries are provided.

The article is now available at:

http://www.ucanimport.com/show_news.aspx?id=15

E-mail from "Pissed Off Car Dealer"

Comments welcomed.

--------------------
(unedited)

First Name: Undisclosed
Last Name: Pissed off Car dealer
Company: Undisclosed
E-mail: Undisclosed@undisclosed.ca

"Are you a bonded customs broker? It seems to me that you are offering the services of a customs broker, except at a higher, and inflated price and benefiting from media splashing your webpage address around. How do you think it will go over in the media when you are in trouble for acting as a customs broker without the proper credentials? You are encouraging Canadians to spend their money outside of Canada and that hurts all Canadians. I hope that you get the repercussions of acting as a customs broker without bond or license. You should have just offered this for free and it wouldn't have raised any eyebrows, instead you are in it for greed.

This will go to the attention of the CADA (Canadian Auto Dealer Association) in hopes they have the resources to know what to do with this forwarding it on to whomever regulates the customs brokers industry. I don't feel bad for doing this to you, your webpage is designed to lose Canadian car dealers business which we can't afford to lose because of your propaganda. Given the fact that new cars purchased in the US don't qualify for any 0% finance or lease options, the average car isn't any cheaper anyways, but your webpage sure doesn't care to point that out does it."

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Comments by: Zabin Somani

The e-mail above is indicative of the "scare tactics" and mean-spirited messages I am now receiving almost on a daily basis from Canadian car dealers. I guess this is a sign that we are making some headway.

Until prices are on parity with the United States, I am going to stand my ground. As I have said before, I'm a proud Canadian and I would prefer that we buy all our goods in Canada. But if we are getting ripped off, then the only way we can stop it is to vote with our purchasing power and go elsewhere to obtain our goods until the situation changes. In the case of auto sales, when Canadian dealers see that they are losing significant business to our southern neighbours, they and the auto manufacturers will hopefully elect to rethink their strategy and adjust their pricing accordingly.

As a final note, if the individual had a leg to stand on regarding any of the points above, he/she would have left a name and contact information so that we could engage in a debate on the issues. For any other dealers that would like to engage with me, I welcome your e-mails. I would like all UCanImport readers to be able to make informed decisions, so I will post ALL of your messages to this blog for everyone to read. Tell me why Canadians should be paying up to 30% more for their vehicles than Americans. And lame reasons such as "we won't honour your warranty" or "we won't service cars sourced in the United States" won't cut it. I promise you that people will see right through these comments as simply price protectionism.

I stand behind our do-it-yourself guide, our assistance services and our web site. I am also committed to bringing to you every bit of information I can get my hands on that will enable you, the Canadian consumer, to make an informed decision with your next vehicle purchase... as they say, Power to the People!

Z.S.

US Dealer Encourages Canadians to Speak Out

Submitted by: Maria Mazzarolo
Re: E-mail Response from US Car Dealer (name withheld)

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Sent: Sunday, September 16, 2007 5:20 PM
Subject: Canadians Banned from New Toyota Sales

Hello Maria,

Thank-you for your inquiry.

Currently, I can only sell used vehicles to folks who live in Canada due to a prohibition from Toyota USA.

You can see my pre-owned inventory at [dealer car lot website].

I am encouraging everyone to make a complaint to your gov't about this apparent NAFTA Free Trade violation.