M-B Inquiry Could Rattle the Industry

AUTOMOTIVE NEWS reported that aJustice Department probe of alleged price fixing by Mercedes-Benz USA LLC could be a bombshell for the industry - particularly if Mercedes is sanctioned for practices similar to those of other automakers. When the very successful team of Mike Jackson and Michael Bassermann were growing market share and paring dealer discounts throughout the 1990s, one disgruntled dealer and some consumers complained it was an attempt to prevent dealers in the New York area from dickering, which ultimately forced consumers to pay higher prices set by both the dealers and the factory. If Mercedes crossed a fine line, many rivals may be in the same position because they, too, cut dealer discounts, insisted on no-dicker stickers and encouraged their dealers to compete with other brands, not each other. The Justice Department won't say what it's looking for, or even confirm the existence of the investigation. But DaimlerChrysler, Mercedes' corporate parent, confirmed July 19 in its second-quarter report that the investigation stems from a lawsuit filed in 1999 by six Mercedes customers from New York and New Jersey. The customers contend that they paid too much for their vehicles because the 27 Mercedes dealerships in metropolitan New York, New Jersey and Connecticut had agreed not to undercut each other on price - at the factory's urging. Such a practice would be illegal, lawyers say.