Selling vehicles for export angers automakers, but is it illegal?

When U.S. Secret Service agents showed up at Jaguar Land Rover Cincinnati, a customer wearing a T-shirt and shorts who claimed to be a wealthy energy broker was about to buy a Range Rover with a cashier’s check for $93,005.

The agents watched the deal close, then followed the buyer to his home. There, they learned he was unemployed and lived with his mother, court documents show.

The man was buying the Range Rover for a company called Automotive Consultants of Hollywood. He was to leave it at a storage yard a few days later in exchange for $500. Had the agents not seized the SUV, they say, it was destined for a buyer in China who didn’t want to pay the marked-up prices at Land Rover dealerships there.

Authorities, who say these types of transactions happen frequently, began working last year to stop the increasing flow of high-end cars overseas. But they’ve run into a significant obstacle: What the exporters are doing may not be illegal — even if the government and the automakers don’t like it, and even if so-called straw buyers are sometimes deceptive.

Most automakers prohibit sales to exporters and have charged dealers who violate the bans more than $30 million in recent years, according to court testimony.

“What they’re complaining about is competition,” said Ely Goldin, a Pennsylvania lawyer representing several exporters that have had property seized. “Why should somebody who goes into a dealership and pays top dollar for a car be legally prohibited from selling the car to whoever they want to sell it to?”

The Secret Service, customs agents and authorities in at least 11 states have been cracking down on export operations but with relatively little to show for their efforts.

 

Original Article: https://www.autonews.com/article/20140721/LEGALFILE/307219975/selling-vehicles-for-export-angers-automakers-but-is-it-illegal