Cars sold as 'new' manufactured 2 years earlier

Cars sold as 'new' but manufactured two years earlier:
Daewoo fined $35,000

In a significant case for the motor vehicle industry, Daewoo Automotive Australia Pty Limited, trading as Daewoo Automotive New Zealand, today pleaded guilty to breaching the Fair Trading Act for selling vehicles as new when they were manufactured two years earlier. Judge Clapham fined the company $35,000 plus costs in the Manukau District Court.

A Commerce Commission investigation revealed that 52 “new” Daewoo Nubira vehicles sold through the company’s nationwide roadshows in 1999 were in fact manufactured in 1997, and had been sitting in storage in Korea.

The Commission alleged that Daewoo deliberately failed to disclose to prospective purchasers the year of manufacture of the vehicles and misled a number of customers who believed they were buying a new vehicle.

Commission Chair John Belgrave said that the issues raised in this case had key implications for the motor vehicle industry.

“Currently a motor vehicle dealer is not legally required to disclose ‘year of manufacture’ details, however, in this case, the claims made by Daewoo were incorrect and misleading. The vehicles cannot possibly have been said to be new”, he said.

In sentencing, Judge Clapham said that there was legislative interest in defining ‘new’ for the purpose of motor vehicles and that a requirement to disclose the manufacture date of vehicles would do away with any confusion.

“The defendant’s conduct interferes with market forces. It deprives consumers of the relevant date of manufacture and also impacts on those traders who disclose all details”, Judge Clapham said.

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