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GM fights cross-border sales July 17, 2002
BY ED GARSTEN Approximately 25,000-30,000 so-called gray market vehicles are exported from Canada each year, mainly by brokers, because of the favorable exchange rate and the demand for hot products such as the Chevrolet Suburban, GM spokesman Tom Henderson said. The practice, while not illegal, is discouraged by the automakers because they want to be able to control the product mix and pricing in the two countries. Exporting also threatens franchise agreements, they say. GM did not eliminate warranty coverage out of consideration for customers who might be unaware they are driving a gray market vehicle. GM's Canadian unit told dealers in that country they are prohibited from selling new vehicles for resale or primary use outside Canada. Vehicles must be registered in Canada for at least six months of primary use and be driven about 7,500 miles before sale outside the country would be permitted. The rule answers complaints from the GM dealer council, according to cochairman Glenn Ritchey, a Daytona, Fla., Chevrolet dealer. Rochester Hills dealer Russ Shelton said the policy puts much of the onus on dealers to catch gray market vehicles, but "I'm glad they're taking action." About 5,000 gray market GM vehicles enter the United States each year, Henderson said. Ford Motor Co. is allowing its dealers to perform warranty work on gray market vehicles because the company doesn't want to inconvenience a customer who might have been unaware of the vehicle's origin, Krusel said. The Chrysler Group of DaimlerChrysler AG voids the warranty of gray market vehicles. |