Fight the Power

  • Would-be car buyers launch a class action suit claiming sticker prices on Canadian cars are illegal. One analyst points out that when the C$ was at US$0.65 — not so very long ago — prices here were actually lower and no one was complaining.
  • What the plaintiffs ignore is that Canada is a different country than the U.S., with a population smaller than California’s. (Are the class action participants not getting the same junk mail from the Council of Canadians I am talking up Canada’s sovereignty? Lucky them.) There’s no reason whatsoever that items should be sold at the same price on both sides of the border, as a distributor or retailer may well need to apply a much greater mark up to make a comparable, or any, profit in the Canadian market.
  • A simple glance at a price tag in Mexx or Zara shows how prices differ from one country to another in the Eurozone — and they’re even using the same currency.
  • 2 of the 4 plaintiffs bought pricey SUVs:

• Daniel Berkovits leased a Jeep Grand Cherokee, which, under the lease, had a sales price of $58,645 (Canadian), when Chrysler was advertising it in the United States at less than $40,000 (U.S.).

• David Bain bought a GMC Yukon Denali at a sale price of $69,615 (Canadian) under the lease, when the advertised U.S. price was about $50,000 (U.S.).

  •  If no one were willing to pay $70,000 for a Yukon Denali (Denali’s in Alaska, by the way… but I digress) in Canada, the prices might come down. Consumers have a lot of pricing power in the flagging auto market, and it doesn’t need to be legislated. But this lawsuit, like the endless assertions of collusion in the gasoline market, is based on a gut feeling that someone’s ripping the “little guy” (driving a $70K SUV) off. Whether or not it’s true is immaterial.