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Chrysler Makes Move to Stop Canadian 'Gray Market'

May 30, 2002

A growing trade in automobiles built for the lower-priced Canadian market but resold in America at large discounts has prompted Chrysler to void warranties on 2003 models sold in this "gray market," according to the Associated Press.

"It's a growing problem," said Dave Elshoff, spokesman for Chrysler Group of DaimlerChrysler AG, the first U.S. automaker to take such action. The corporation told its domestic dealers a week ago it would no longer honor new car warranties for the cars intended for sale in Canada, Elshoff said May 29.

Consumers, particularly in border states such

as New York, have been buying new American-made automobiles priced in Canada, Mexico, and other countries at thousands of dollars off the U.S.

price in a trade greased by the favorable currency exchange rate, according to Elshoff.

The cars, trucks and sport utility vehicles are marketed in Canada, but purchased and resold in the United States by auto brokers, used-car dealers, independent sellers and dealers, Elshoff said.

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