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From Auto Insider:

Carmakers sued over Canadian imports

U.S. consumers say industry illegally restricts competition

SAN FRANCISCO -- DaimlerChrysler AG, General Motors Corp., Ford Motor Co., Honda Motor Co. and other automakers were sued by a group of U.S. consumers who claim the manufacturers break antitrust laws by conspiring to prevent Americans from buying cars imported from Canada.

The lawsuit filed Friday in San Francisco says the industry illegally restricts competition by refusing to honor warranties on vehicles bought in Canada for U.S. use and by penalizing Canadian dealers who sell to American importers. A similar suit was filed Tuesday in Chicago.

Carmakers say they're losing out on more profitable U.S. sales when Americans buy cars meant for Canada. Automakers set lower prices in Canada because consumers there have less money to spend than American buyers.

Analyst Dennis DesRosiers at DesRosiers Auto Consultants said the industry sells 300,000 to 400,000 more cars each year in Canada by pricing them at about $4,000 less than in the United States. If they lose the legal fight, automakers would be forced to raise prices in Canada, DesRosiers said.

But the Canadian market is so competitive it cannot support price hikes, said North American Automobile Trade Association President Brian Osler, noting that car prices have not increased in five years."

The suit, filed in federal court, seeks class-action status on behalf of consumers who bought cars at authorized U.S. dealerships.

Officials at Ford and DaimlerChrysler's Chrysler unit said they had no immediate comment on the lawsuit. Toyota and Honda officials said they hadn't seen the suit and declined to comment.
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