Automakers hit with Canada lawsuit

North American auto manufacturers have been slapped with a $2-billion class action lawsuit by four Toronto residents who claim the auto industry conspired to inflate the price of automobiles in Canada and also inhibited cross-border vehicle shopping on the strong Canadian dollar.

The suit, filed Wednesday by Toronto-based law firm Juroviesky and Ricci, covers consumers who bought cars between August 2005 and August 2007.

They say they paid more money to buy cars in Canada than similar or identical models cost in the United States.

Included in the allegations are claims that the automakers agreed not to honor warranties for vehicles purchased in the U.S., forcing Canadian consumers who wanted a manufacturer's warranty to pay 25 to 35 percent more on average for a vehicle in Canada.

None of the allegations has been proven in court.

Named in the lawsuit are the Canadian and U.S. divisions of General Motors, Honda, Nissan and Chrysler.

Also named in the suit are the Canadian Automobile Dealers Association and the National Automobile Dealers Association, a U.S. partner based in Virginia.

Meanwhile, the Canadian dollar has been gaining ground on its American counterpart in recent years and reached par last week after hitting an all-time low of 61.79 U.S. cents on Jan. 21, 2002.

Many goods in Canada haven't been reduced yet to reflect the rising Canadian dollar.

Doug Porter, deputy chief economist at the Bank of Montreal, released a study Friday that indicates Canadians are paying roughly 24 percent more than Americans on identical goods despite parity in the U.S and Canadian dollars.

The plaintiffs claim a “conspiracy” among automakers involved agreements between the companies designed to minimize cross-border competition and the number of new cars that crossed the border.

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