A seldom-used European Union trademark directive may become the most effective weapon official car distributors have to counter grey-market imports.
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Grey-market imports that circumvent official dealer channels are currently spreading all over Europe because of the low dollar exchange rate and the demand for specific models of US-marketed brands, Automotive News Europe said.
The unofficially imported cars are sourced from excess stock at mostly American dealers, often at sharply lower prices. But grey-market importers also offer models that are not yet available through official channels, such as the latest Cadillacs.
Customers can buy re-imported Porsche Cayennes or Nissan Muranos in Europe through these channels. Full-size American pickups and SUVs, which are not sold via official importers, are also in demand. Dutch or German grey-market importers mainly offer them.
The Dutch division of Kia Motors Europe has successfully used the directive to combat grey-market imports. Now other distributors will also use the law to fight grey-market imports.
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By GlobalData“It is now our strategy to fight grey-market importers on the basis of the EU trademark directive,” said Dick Braakhekke, spokesman for Cadillac Europe Co., which was established last October.
Kia Motors Holland filed a legal case against a private importer and won.
“We learned about a shipment of 30 Sorentos from Korea to Europe,” said Milco de Vries, managing director of Kia Motors Holland. “Demand for the model is so high, that private – or grey – importers saw their chance in offering them from stock at competitive prices.”
Kia’s 2003 legal action used the 1988 European Trade Mark Directive that took effect in 1996.
It gives the holder of a trademark registration the exclusive right to use that trademark. And it forbids import and distribution in the EU of the products covered, unless the specific owner of the brand name grants approval.
“There is jurisdiction about other products, such as jeans,” said Walter van Overbeeke, an Amsterdam lawyer who handled Kia’s case. “But in the car industry, it apparently has been overlooked so far.”
