The U.S. Supreme Court ruled in favor of Volvo Trucks North America Jan. 10 in a dispute with one of its dealers regarding pricing practices.
In the case of Volvo Trucks North America vs. Redder-Simco GMC, the court upheld the practice of competitive pricing in the heavy-duty truck industry by a 7-2 vote. The case concerned specially ordered products for heavy-duty trucks supplied by Volvo Trucks and sold by franchised dealers through a competitive bidding process.
“In this process, the retail customer states its specifications and invites bids, generally from dealers franchised by different manufacturers,” said U.S. Supreme Court Justice Ruth Bader Ginsburg, in the court’s opinion. “Only when a Volvo dealer’s bid proves successful does the dealer arrange to purchase the trucks, which Volvo then builds to meet the customer’s specifications.”
Reeder-Simco GMC filed suit against Volvo alleging that Reeder’s sales and profits declined because Volvo offered other dealers better prices than those offered to Reeder.
The court ruled Volvo’s actions do not violate the Robinson-Patman Act, a federal antitrust law forbidding certain forms of price discrimination. Volvo hailed the ruling as an affirmation of competitive pricing in the heavy-duty truck industry.
“Competitive pricing fosters competition by giving each seller the opportunity to respond to specific situations by offering lower prices to dealers in order to secure sales to end customers,” said Peter Karlsten, president and CEO of Volvo Trucks North America. “The court’s opinion is a clear statement of the validity, fairness and legality of pricing practices used throughout the heavy-duty truck industry, and in many other industries that rely on competitive, commercial sales policies.”
