Daewoo tactic costs $35,000

A motor company which sold "new" vehicles that had been manufactured more than two years earlier has been convicted and fined $35,000.

Daewoo Automotive Australia Pty Ltd pleaded guilty to a charge of misleading conduct under the Fair Trading Act 1986 in the Manukau District Court yesterday.

Seven charges of false representation were withdrawn.

Appearing for the Commerce Commission, Crown prosecutor Simon Moore said the charge related to vehicles sold by the New Zealand registered company during its 14 nationwide roadshows between September and November 1999.

The roadshows were advertised and promoted throughout the country in newspapers, leaflet drops, on radio and billboards.

"The conduct of the defendant in advertising and promoting its 1999 roadshow gave the impression that those vehicles being sold by the defendant were new vehicles," Mr Moore said.

A total of 241 "new" vehicles were sold during the roadshows but commission inquiries revealed 52 were manufactured between May and September 1997. Another 15 were manufactured between July and December 1998 and the rest in 1999.

The commission alleged the company's conduct in representing the vehicles as new was false and misleading, given that some of them had been manufactured at least two years before they were sold.

Brett Vautier, appearing for Daewoo Automotive Australia, said the company had operated for a limited time in New Zealand and had not been trading here since August 2000.

Distribution of Daewoo vehicles had been taken over by another company.

The company claimed the year of manufacture was "not a relevant piece of information to be disclosed to the public". The vehicles were not previously owned or registered.

Mr Vautier said the company had pleaded guilty as it was the most economic way of bringing the matter to a close.

Judge Tony Clapham said by describing the vehicles as "new" there was the potential to mislead buyers.

Market forces could have seen other motor vehicle dealers affected and members of the public disadvantaged.

"Any person fixed with the knowledge as to the year of manufacture could not possibly register them as new for the purpose of sale."

Judge Clapham said the company was entitled to credit for previously good behaviour and he acknowledged the guilty plea.

In fixing the penalty he said he needed to take into account the "potential or actual loss"' suffered by those who bought the vehicles. He convicted and fined the company $35,000.

Judge Clapham said he wanted to emphasise the present distributors of Daewoo vehicles were not involved.