Automotive News Canada - April 2017 - v2 - 24

* A PR IL 2 017

Judge says VW diesel owners
entitled to full refunds, damages
U.S. claims
are based on
depreciated
value, but
Canada's laws
are tougher
By STEPHANIE
WALLCRAFT
TORONTO CORRESPONDENT

TORONTO - LAWYERS
representing both
Volkswagen and VW diesel owners need to demonstrate why a proposed
$2.1-billion settlement is
fair and reasonable, citing a difference in payouts
between purchase price
and settlement compensation in the range of $10,000
or more, says the Ontario
Superior Court judge hearing the case.
Justice Edward
Belobaba said March 31
the outlined proposal is
"nowhere near" being in
the best interests of consumers directly affected by
VW's diesel-cheating scandal.
The proposed system
for compensation would
see owners of 2.0-litre
TDI-powered cars from
the model years 2009-'15
receive Canadian Black
Book value for their vehicle as of September 2015,
before their market value
was affected by news that
Volkswagen had installed
software that helped the
engines pass emissions
certification. There's also
additional damages payouts ranging from $5,100 to
$8,000.
Under the proposal,
which was agreed to by
Volkswagen Canada and
the counsel representing affected owners, VW's
projected total estimated
payout would be $2.1 billion. Claims for cars with
3.0-litre TDI engines are
not included in the settlement and have not yet been
determined.
Justice Belobaba said
that he could not approve
the settlement in its submitted form, citing two
"fundamental concerns."
The first was satisfied
in the courtroom. Justice
Belobaba asked for verification that the Canadian
settlement is on a par with
the approved settlement in
the United States. Counsel
demonstrated that about
500,000 TDI owners in the
United States involved in
the class action suit will
receive a settlement value
of US $10 billion. With
105,000 consumers named
in the Canadian class
action, the proposed payout of $2.1 billion, is proportionate.

New cross-border clause
'reflects well' on Volkswagen

DURING THE ONTARIO PROCEEDINGS OF THE
Volkswagen class-action settlement, an import-export
clause was added to the agreement that would see the
Canadian registration requirement for compensation
waived if the vehicle was registered in the United
States during the qualifying period, with a similar
clause being made available to U.S. consumers for
Canadian-registered vehicles.
Justice Edward Belobaba said that this update
"reflects well on Volkswagen" and its intentions
toward Canadian consumers and that the arrangement settles his concerns about class action, that the
Canadian settlement is on a par with the one reached
in the United States. - ANC

represented in the class
action, about 500 written objections to the current settlement have been
received by the court. Ten
were delivered orally at the
hearing.
Justice Edward Belobaba
has asked both sides to
explain why it's acceptable, when determining
compensation, to use
depreciated value of the
affected VW vehicles
instead of the original
purchase price.

The widely published
figure of $14.7 billion in the
U.S. suit includes administrative and legal- fee payouts, while the Canadian
figure does not; these fees
are being negotiated independent of the settlement
figure in Canada.

REFUNDS PLUS DAMAGES
Justice Belobaba's
second concern is that
Canadian consumer-protection laws are more
strict than their U.S.
equivalents. He cited section 18.2 of Ontario's
Consumer Protection Act,
under which, because of
Volkswagen's demonstrated intentional misrepresentation of its diesel emissions, TDI owners would
be entitled to a refund of
the original purchase price
as well as damages.
Justice Belobaba
said that the template
of Canadian Black Book
value plus damages could
still be accepted, but it falls
short of what Canadian
law says that consumers
are entitled to.
While he accepted that
depreciation could be a
valid factor in valuation,
he stated that lawyers representing both VW and
the vehicle owners need to
demonstrate why it is fair
and reasonable for the difference in payouts between
purchase price and settlement compensation is
in the range of $10,000 or
more.
Of the 105,000 Canadians

WHOLESALE VALUES
Most of those heard
in court pointed out that
Canadian Black Book values are at wholesale rather
than retail prices, and that
the settlement does not
compensate consumers for
extra costs such as dealer
accessories, extended warranties, fees or taxes.
Counsel on both sides
committed to file a requested memorandum to Justice
Belobaba by April 7 outlining the basis for the proposed compensation system and why the court
should deem it fair and
reasonable under the
Consumer Protection Act.
Once the memorandum
has been received and
reviewed by the court, the
hearing will reconvene.

QUEBEC DECISION PENDING
This is the second
Canadian hearing on
the VW settlement in as
many weeks. On March
22, Justice Marie-Claude
Lalande of the Superior
Court of Quebec presided
over a hearing in Montreal.
Her decision is pending.
"The hearing saw thorough and constructive discussion of aspects of the
settlement in response
to questions from the
Court," a Volkswagen
Canada representative
said in an official statement. "Volkswagen Group
Canada is confident that
the settlement provides
a fair resolution for our
affected Volkswagen and
Audi customers." As the
matter remains before the
courts, company officials
at Volkswagen Canada
declined further comment.
If both hearings result
in approval, affected consumers will be able to
begin filing for claims on
April 28. - ANC

March sales record
pushes Q1 to 4.5%
above 2016 mark
FCA and Ford were
stagnant, but GM
pulled off a stout
22.9-per-cent increase
By JEREMY SINEK
TORONTO CORRESPONDENT

AUTO SALES IN CANADA
continued to defy gravity in March
as a resurgent General Motors
paced the industry to a new March
record. The total of 187,808 cars and
light trucks sold was a 6.7-per-cent
increase over March 2016, itself a
record-setter.
That made it a three-peat
for sales growth in 2017, with
first-quarter sales up 4.5 per cent
over last year's total.
While FCA and Ford both stagnated with 0.2-per-cent gains, GM's
22.9-per-cent surge was enough to
help the Detroit automakers (up
7.1 per cent, collectively) claw back
a little lost ground from the global automakers (up 6.1 per cent). It
also put GM at the top of the sales
chart for the month.

CUV CRAZE CARRIES ON
In another respect, however,
March confirmed the "new normal" as light trucks (up 11 per
cent) outperformed passenger cars
(down one per cent) and scored 67
per cent of the market.
There were, however, some
stand-out exceptions to the truck
trend. Big gains were posted by
mainstream compact cars such as
the Honda Civic (up 37 per cent),
Toyota Corolla (32 per cent) and
Mazda3 (22 per cent), each of which
outperformed its respective compact-utility siblings.
Mazda's total car sales surged
32 per cent (Mazda6 and Mazda5
also prospered) while light trucks
dipped 1.3 per cent. The truck slide
was all down to the popular CX-5
compact utility, with a hiatus in
availability between run-out of the
old model and arrival of the new
2017 CX-5 late in the month, said
Mazda Canada spokesman Chuck
Reimer. As well, "on the car side

MOVERS
& SHAKERS

(Compared with the same
month a year ago)
* Bentley :+340%
* Jaguar: +227%
* Maserati: +198%
* All Italian cars*: +204%
* Nissan Rogue: +63%
* Fiat 500 L: -90%
* Smart: -84%
* Lexus ES: -70%
* Hyundai Santa Fe XL: -62%
* Volkswagen: -22 %
FULL OF SURPRISES
* Volvo V60: +487%
* Lexus GS: +329%
* Hyundai Veloster: +225%
* Alfa Romeo, Ferrari, Fiat, Lamborghini, Maserati

Three small cars posted significant gains in March. The Honda
Civic, pictured, was up 37 per
cent and the Toyota Corolla
and Mazda3 gained 32 per cent.
(PHOTO: HONDA)

(Mazda3/Mazda6), there were some
additional incentives available
based on the fact that we knew
CX-5 supply was running short,"
Reimer added. "There was also an
attractive fleet deal available on
the Mazda5."
Another compact utility, the
Nissan Rogue, spiked 63 per cent,
making it the segment's top seller
for the month and also, by a sliver,
year-to-date.
GM's blockbuster month included a 35-per-cent leap in sales of the
Silverado/Sierra pickups, 59-percent higher compact utility sales
(paced by Chevrolet Equinox), and
a 27-per-cent increase for Chevrolet
Cruze (another compact car).
"March was our best GM Canada
sales month since 2008," said John
Roth, vice-president, sales, service
and marketing.

JEEP SALES SLIDE
A model-change-supply hiatus also held back FCA Canada,
despite a 47-per-cent hike in Grand
Caravan sales and 40-per-cent higher Dodge Journey sales. What hurt
Chrysler was a 27-per-cent decline
for Jeep. Inventory of the outgoing Compass and Patriot dried up
in March (production ended in
December) before the debut of the
new Compass in April.
Conversely Ford was strong on
utility sales, including a March
record for Escape and a doubling of
Expedition sales, but its total was
stalled by a 20-per-cent slide on the
car side.
One of the biggest increases was posted by Jaguar, which
was up 227 per cent on the back
of new nameplates, chiefly the XE
sedan and especially the F-Pace
tall wagon. The 359 sales in March
came close to matching the sales of
all Jaguar's car nameplates, combined.
Not all automakers benefited from spring fever, however. Declines were posted by
Hyundai, Mitsubishi, Smart and
Volkswagen. While VW sales have
been recovering in the United
States, Canada was down 15.5
per cent year to date. Spokesman
Thomas Tetzlaff attributed the difference to the quicker resolution
of the diesel issue in the United
States, which includes compensation cheques and buy-outs.
"The U.S. situation is settled.
We're not there yet.
"U.S. customers know they are
going to get a big fat cheque."
- ANC

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