Automotive News - May 26, 2008 - (Page 20)

20 • MAY 26, 2008 Estimated Europe light-vehicle registrations by manufacturer, April & 4 months A 2005 E320 sparked a lemon law dispute between the buyer and MercedesBenz. April 2008 April Percent 2007 change 4 mos. 2008 4 mos. Percent 2007 change Court: Buyers must act in good faith to win lemon law damages Eric Freedman freedma5@msu.edu Courtroom bound Issue: Did a Mercedes-Benz customer deliberately delay providing loan payoff information to justify lemon law damages? Where it stands: Wisconsin appeals court orders a trial, saying consumers must act in good faith when pursuing lemon law claims. For what is believed to be the first time, an appellate court has defined a consumer’s obligation in pursuing a lemon law case. Consumers — not just manufacturers — must act in good faith in lemon law disputes, the Wisconsin Court of Appeals has ruled in a lawsuit against Mercedes-Benz USA LLC. “A consumer fails to act in good faith when he or she intentionally prevents the manufacturer from complying” with the lemon law, the unanimous three-judge panel said. The decision may have a wide impact. “The consumer must have acted in good faith and cooperated willingly,” says Mercedes-Benz lawyer Patrick Wells of Milwaukee. He says the decision may “rein in some of the consumerlawyer tricks to game the system.” Plaintiff’s lawyer Vince Megna of Waukesha, whose client insists he acted in good faith, says the ruling could have national implications. “It establishes some good-faith parameters. That’s why it’s good news for the industry,” he says, noting that because of the similarity of lemon laws in many states, the court’s reasoning “could apply across the country.” Mercedes-Benz lawyer Wells says the company had arranged with its dealership to write a refund check as soon as it had the payoff figure. Marquez sued Mercedes-Benz on the 31st day, seeking double damages. Mercedes-Benz denied violating the lemon law, arguing that it could not make a proper refund without knowing the payoff amount that it was required to cover. Wells says Mercedes-Benz made a “strategic decision” not to dispute whether the car was a lemon and concentrated instead on the issue of good faith. A lower-court judge ruled in favor of Marquez without trial and awarded about $202,000 in damages, attorney fees and court costs. Volkswagen division 153,077 Audi 62,778 Seat 32,854 Skoda 44,418 Other 440 VOLKSWAGEN AG 293,567 Peugeot 100,706 Citroen 82,523 PSA GROUP 183,229 Ford division 109,835 Volvo 21,583 Land Rover 6,023 Jaguar 4,047 FORD MOTOR CO. 141,488 Opel/Vauxhall 112,788 Chevrolet/GM Daewoo.. 16,059 Saab 6,237 GM U.S 503 GENERAL MOTORS 135,587 Renault division 112,597 Dacia 14,666 RENAULT 127,263 Fiat division 94,289 Lancia 10,889 Alfa Romeo 9,715 Other 616 FIAT GROUP 115,509 Toyota Division 72,180 Lexus 2,704 TOYOTA MOTOR 74,884 Mercedes-Benz 69,310 Smart 10,350 DAIMLER AG† 79,660 BMW division 66,181 Mini 14,114 BMW GROUP 80,295 NISSAN 29,822 HONDA 22,941 HYUNDAI 25,289 MAZDA 21,978 SUZUKI 23,503 KIA 20,590 MITSUBISHI 11,227 CHRYSLER LLC† 9,190 OTHER 24,923 TOTAL 1,420,944 136,793 57,417 29,152 39,893 378 263,633 95,259 76,325 171,584 99,317 22,464 7,054 2,386 131,221 104,714 15,568 6,859 430 127,571 108,175 13,210 121,385 84,130 10,894 10,942 537 106,503 73,082 3,105 76,187 60,571 7,141 67,712 52,358 12,041 64,399 25,152 25,097 22,752 17,379 22,482 19,443 10,029 9,533 14,267 1,296,329 11.9 9.3 12.7 11.3 16.4 11.4 5.7 8.1 6.8 10.6 –3.9 –14.6 69.6 7.8 7.7 3.2 –9.1 17.0 6.3 4.1 11.0 4.8 12.1 0.0 –11.2 14.7 8.5 –1.2 –12.9 –1.7 14.4 44.9 17.6 26.4 17.2 24.7 18.6 –8.6 11.2 26.5 4.5 5.9 11.9 –3.6 74.7 9.6 556,613 223,507 131,753 163,439 1,585 1,076,897 395,432 323,631 719,063 463,792 88,393 30,573 12,629 595,387 451,356 68,077 25,540 2,159 547,132 423,569 61,051 484,620 374,814 43,391 31,784 2,636 452,625 298,160 11,818 309,978 258,760 32,372 291,132 241,288 55,119 296,407 138,150 109,905 98,862 96,465 92,576 90,070 51,212 38,601 86,481 5,575,564 540,479 227,945 133,335 164,493 1,816 1,068,068 398,337 335,246 733,583 467,939 96,562 35,108 12,574 612,183 473,440 68,429 28,835 2,024 572,728 425,696 47,488 473,184 353,087 48,563 53,780 2,078 457,508 324,793 14,640 339,433 249,199 19,888 269,087 215,528 43,220 258,748 98,454 111,780 103,226 86,294 96,764 84,038 50,539 40,139 66,513 5,522,269 3.0 –1.9 –1.2 –0.6 –12.7 0.8 –0.7 –3.5 –2.0 –0.9 –8.5 –12.9 0.4 –2.7 –4.7 –0.5 –11.4 6.7 –4.5 –0.5 28.6 2.4 6.2 –10.7 –40.9 26.9 –1.1 –8.2 –19.3 –8.7 3.8 62.8 8.2 12.0 27.5 14.6 40.3 –1.7 –4.2 11.8 –4.3 7.2 1.3 –3.8 30.0 1.0 †DaimlerChrysler sold the Chrysler group on Aug. 3, 2007; Chrysler LLC and Daimler AG totals through July 2007 are extracted from DaimlerChrysler. Note: Reflects estimated registration data from 28 European countries; excludes most commercial vehicles Source: ACEA Appeals court ruling But the Court of Appeals reversed that decision and ordered a trial to determine whether, as Mercedes-Benz contends, Marquez deliberately thwarted the company’s effort to make a refund by the 30-day deadline. The court agreed with MercedesBenz that knowledge of the payoff amount was essential for the company to comply with the lemon law because the bank was listed as a secured party on the title application. Thus Mercedes-Benz was obligated to write a separate check to the bank, not simply give Marquez a lump-sum check. “This is a case in which the manufacturer stood ready to comply with its statutory obligations and was prevented from doing so by the consumer’s deliberate obstruction, a case in which the manufacturer was lost at sea due to the consumer’s alleged evasiveness,” the court said in an opinion written by Judge Richard Brown. The court noted that state law does not explicitly forbid consumers from deliberately forcing manufacturers to violate the 30-day rule as a strategy to collect higher damages but said “it would be absurd to imagine that the legislature, in passing the lemon law, intended to allow this sort of abuse.” However, the court did not rule on whether Marquez had such a motive. Says Megna: “What Mercedes-Benz did wrong was wait until the 30th day to contact the bank. The industry can’t wait until the last day.” c Germany leads rise in Europe sales European vehicle sales rose 9.6 percent in April, spurred mainly by strong increases in the largest market, Germany, and in France. German automakers in particular reaped the benefit. The industry sold 1,420,944 units, up 124,615 from April 2007. Sales in Germany were up 20 percent, at 317,960 units. French sales rose 15.0 percent. The April sales spike pushed European sales ahead of 2007, up 1.0 percent from the first four months of last year. Among brands, Volkswagen remained the industry leader in April, with 153,077 units sold, an 11.9 percent year-over-year increase. General Motors’ Opel/Vauxhall came in second with 112,788, edging Renault division by 191 units. Ford division, with 109,835 units, and Peugeot, with 100,706 units, rounded out the top five brands. German luxury brands had a strong month. Mercedes-Benz was up 14.4 percent year over year, BMW was up 26.4 percent and Audi was up 9.3 percent. For the year to date, VW leads other brands by a healthy margin, tallying 556,613 units. Runner-up Ford brand sold 463,792 units in the first four months. Among companies, Volkswagen AG led automakers in April. VW is Estimated Europe registrations by country 4 mos. Percent 2008 change The case The dispute involved the 2005 E320 that Marco Marquez bought for $55,400 from a Milwaukee dealership with bank financing. After the car turned out to be a lemon, according to the court, Marquez sent MercedesBenz a letter demanding a refund and spoke several times with a Mercedes-Benz representative, who said the company would make the refund once Marquez provided loan payoff information. Marquez did not directly provide the information, the court said, and the bank refused to release it directly to a Mercedes-Benz representative because of privacy laws. But Megna, Marquez’s lawyer, contends that Marquez’s written lemon law notice to Mercedes-Benz authorized the bank to release the payout information but that the MercedesBenz representative who contacted the bank just before the deadline did not tell the bank about it. “MercedesBenz had authorization from our client but didn’t know they had it,” Megna says. Under Wisconsin law, consumers can sue only if a manufacturer fails to make a refund or provide a replacement within 30 days after the request. Germany 1,053,874 7.3 Italy 867,207 –8.2 United Kingdom 859,017 0.0 France 724,679 4.8 Spain 471,303 –11.5 Belgium 231,567 9.5 Netherlands 206,121 2.9 Poland 115,000 17.3 Greece 107,307 5.3 Ireland 106,307 –9.3 Austria 105,591 0.8 Romania 96,971 17.3 Switzerland 94,888 8.0 Sweden 89,301 –6.6 Portugal 73,655 12.1 Finland 61,631 17.4 Hungary 54,002 –1.0 Denmark 52,256 6.1 Czech Republic 47,808 13.6 Norway 41,678 –2.2 Slovenia 26,529 16.5 Slovakia 22,401 23.3 Luxembourg 19,906 –0.6 Bulgaria 15,538 16.5 Estonia 9,928 –5.7 Lithuania 8,845 63.9 Latvia 8,170 –24.2 Iceland 4,085 –3.0 TOTAL 5,575,564 1.0 Note: Excludes most commercial vehicles Source: ACEA the only automaker above 1 million units for the year to date. PSA Group ranked second and Ford Motor third for both April and the year to date. April was difficult for Toyota Motor, down 1.7 percent, and Honda Motor, down 8.6 percent. Asian automakers that posted sales increases were Nissan, Mazda, Hyundai, Suzuki, Kia and Mitsubishi. — Dave Guilford

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Automotive News - May 26, 2008 Bad times? Not for CEO paychecks GM seeks Volt tax break to avoid $40k sticker Ford's big cuts aim for a Honda-sized lineup Automotive News gets new marketing communications director Toyota pushes N.A. suppliers to match offshore prices VW predicts 5% U.S. sales gain Toyota plans 3 plants for hybrid batteries GM's American Axle strike tab: $2.82 billion Lawsuit in Florida targets congressman's dealership Orbiting the blogosphere Kia to build small cars in U.S. plant VW Mexico exec will run North American purchasing Fiat mulls 500 minicar for U.S. GM scraps big rwd sedans for Chevrolet and Buick Hyundai spends like never before to launch Genesis luxury sedan Surprise: Suzuki slides as fuel prices rise GM paid Walter Chrysler a whopping $600,000 a year Chrysler sends mystery shoppers to dealerships Toyota owes royalties on some hybrids GM, American Axle to resume output Ford predicts bigger demand for smaller engines in Escape This is Volvo? Ads sell chic, not just safety An overnight success in 50 years Obama's comments were out of line Japan does it; why shouldn't we? 25% is high, but Chrysler is wise to revisit SCORE Safety efforts must focus on the driver Blame the dealer for poor service Don't judge Ford quality by just one car Ford quality is best in many years Mitsubishi considers piggybacking with Caterpillar suppliers to cut costs Nissan to make lithium ion batteries 'Boss Ket,' Connery inspire Tim Jackson Germany leads rise in Europe sales Court: Buyers must act in good faith to win lemon law damages Nissan wants suppliers to reduce utility bills Bajaj: From scooters to autos The next $2,500 car? Infiniti will look different, add engine power in Europe Lamborghini boss wants to keep the big engines Lamborghini ups ante in 'entry' supercars Continental exec: We're done selling VDO assets Honda plans Fit hybrid Outgoing Visteon CEO to receive $2.5 million Audi production chief: Cooperation with Porsche will grow Picture this RV shipments fall in March M-B will buy Chrysler studio Supplier personnel VW expects to reap big share of U.S. diesel market Valeo CEO Morin: Pass rising costs to consumers Suppliers to the 2008 Nissan Altima Dealers Auction workshops demystify Web buying April used-vehicle prices: Light trucks fall and cars rise Volvo certified plan offers free satellite radio Mulally: Full speed toward smaller Toyota plans credit card Sanfilippo switches agencies International idles plant Honda Pilot starts at $28,230 Plastech plans assets auction What counts GM's 2-pronged strategy for Calif. rules: If you can't beat 'em . . . meet 'em New wheels for the cop shop The cost of luxury? For Hyundai, it would have been $2.5 billion New tools allow early design input from consumers Lexus in the sky with carbon: How ex-Beatle's PR effort tanked Buy an '08 . . . get a .44 $4 gasoline gives new cachet to aging econo-beaters Time tips its hat to Tata Car marketers: Magazines must widen ad reach Automakers seek 'one-to-one' approach to magazine ads Auto ads go to the movies Here's the next big thing: Ads tailored to you GMC courts women with Acadia

Automotive News - May 26, 2008

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