GM Fights Cross-Border Sales
General Motors Corp. dealerships in the United States that sell or perform warranty service
on some vehicles built in Canada risk losing their allocations of the hottest new products, the automaker told them in a July 16 letter, according to an Associated Press story by Ed Garsten.
Between 25,000 and 30,000 so-called "gray market" vehicles are exported from Canada each year, mainly by brokers, because of the favorable exchange rate and the demand for hot products such as the Chevrolet Suburban, GM spokesman Tom Henderson said.
The practice, while not illegal, is discouraged by the automakers because they want to be able to control the product mix and pricing in the two countries. Exporting also threatens franchise agreements, according to the automakers.
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