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Tuesday, March 31, 2015

Car Arbitrage

Maserati LaMaserati Concept
California Bob reports:
There's a business on the floor where I work that buys new luxury cars here and ships them to China.  Land Rover, Maserati etc. have dealerships in China but the prices are very high. These guys can buy a car new here, pay shipping, import duties and all that, take a fat markup and still deliver a bargain for Chinese customers.

The manufacturers hate this, and have to school their dealerships to weed out export buyers.  Whereas most Honda and Toyota dealers are begging you to buy cars, apparently when you go into a Land Rover dealership, they pepper you with questions: what are you going to do with the car?  Is the car for your own use?  Where is the money coming from?  Can we see 6 months of financial statements?  And other unbelievable bullshit.

And they make you sign non-resale or non-export agreements if you buy.  All the guys at the firm are on exporter lists, so they front the money to straw buyers to make the purchases for them.

I asked why don't they just buy used cars; the guy claims the Chinese won't let you import used cars.  But if a straw buyer buys the car from the dealer, and sells it to an exporter, that's a used car -- so I need to understand the distinction.

I'm fascinated by this but am reluctant to sign a non-export agreement and then breach that agreement -- there are too many lawyers out there.

Anyway, if any of you know any lawyers out there, ask about these dealer-stipulated non-export agreements.  Can manufacturers/dealers bring nuisance lawsuits if you break a non-resale agreement?
The New York Times has a story:


22WWLP (a Massachusetts TV station):

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