Car Makers Lose Power to Stop Gray Market - "talk about buying from an out of town dealer"

TORONTO, July 17 - The European Commission introduced bold new laws today to stop car manufacturers from restricting gray market sales. The new laws are designed to give consumers the benefits of free trade and to allow them to cross borders to buy cars. Independent vehicle dealers and consumer groups in Canada and the United States are already pushing for similar changes in North America.

The new laws became necessary when manufacturers tried too hard to keep gray market sales out of Europe. DaimlerChrysler, the company that has taken the harshest measures against gray markets in North America, was fined

(euro) 71.825 million last October by the European Commission. Volkswagen AG and General Motors Nederland BV were hit with similar fines. The European Commission found that manufacturer imposed restrictions hurt consumers and new rules to protect the gray market were needed. Brian Osler, President of the North American Automobile Trade Association (NAATA), applauded the changes. "It is completely unreasonable for manufacturers to restrict cross-border sales within a free trade zone like North America or Europe. Consumers should have a right to buy a car wherever they want, as long as safety and emissions standards are met."

The new rules in Europe protect the rights of gray market dealers to buy cars for export. A press release issued today by the European Commission notes that manufacturer restrictions on cross-border sales "...hamper what is a perfectly legitimate trade, and they will in future be prohibited."

"If manufacturers get too aggressive in fighting the gray market in Canada and the U.S., they will end up facing similar laws here too", says Mr. Osler. "Consumers are fed up with manufacturer price fixing. They want the gray market to bring them identical cars at lower prices."