DETROIT -- A group of U.S. consumers has filed lawsuits against several automakers, charging that they conspire to prevent Americans from buying new cars and trucks in Canada, where vehicle prices are as much as 30 percent less.
The lawsuits allege that many top American, German and Japanese automakers conspire to prevent U.S. consumers from buying new vehicles across the border in Canada by refusing to honor warranties or punishing dealers who sell new cars and trucks in Canada to Americans.
Automakers generally charge less for new vehicles in Canada to make them more affordable to Canadians, who have higher taxes, lower after-tax incomes and higher costs for imports due to the weak Canadian dollar.
"Carmakers have rigged the deck to make U.S. consumers pay thousands of dollars more per vehicle than Canadians for virtually the same cars," said Joseph Tabacco Jr., a partner in the Boston law firm of Berman DeValerio, which filed the lawsuits on behalf of consumers.
Named as defendants in the lawsuit were General Motors, Ford Motor Co., DaimlerChrysler AG, Toyota Motor Corp., Honda Motor Co. Ltd., Nissan Motor Co. Ltd., BMW AG and the Canadian and American automobile dealers associations.
GM, Ford, DaimlerChrysler and the dealer associations did not return telephone calls from Reuters seeking comment.
Tabacco said the auto industry was strongly in favor of the North American Free Trade Agreement, "but when free trade threatened to cut into their U.S. profits, they worked to get around it -- and broke the law to keep prices high."
Estimates of the number of new cars and trucks available for sale in Canada that end up in the United States each year range from 5,000 to 100,000, said Dennis DesRosiers, president of DesRosiers Automotive Consultants Inc. in Richmond Hill, Ontario.
"We estimate it's at the low end of that range," DesRosiers said. "It's created this price gap between Canada and the United States ... of about $5,000 per vehicle. That has created an arbitrage situation between the two countries."
Many of those vehicles that end up in the United States are brought from Canada by export companies, rather than consumers who cross the border and shop in Canada.
The lawsuit said that vehicles sold in both countries were essentially the same, except for a metric speedometer and odometer in Canada and imperial gauges in the United States.
DesRosiers said there also were some differences in the safety and emissions standards between Canada and the United States that resulted in some small differences, but he said a vehicle sold in Canada was about as safe as one sold in the United States.