(CNN) — The market for luxury cars is growing, and it’s not just car dealers who are cashing in on the profits.
They’re fast, furious and in great demand in Beijing and beyond.
Porsche, BMW, Land Rover and Mercedes Benz.
Small-time exporters are making big bucks shipping luxury vehicles to countries like China, the world’s largest car market.
“Something that sells for 50-60 thousand in the US Can go for 150-200 thousand in China. People can buy these cars, send them over there and make a lot of money, considering the risk they go through in some of these cases,” said Nick Bunkley, Automotive News.
Risky business indeed. Car-makers say quick turn-around sales of luxury vehicles is illegal.
In a statement, BMW told CNN, “the BMW U.S. dealer agreement forbids the sale of vehicles to brokers or for export.”
Under pressure from car-makers, federal authorities have started cracking down, seizing assets and fining exporters.
Attorney Elly Goldin, whose clients have had assets frozen, says the feds are overstepping.
“I don’t think the government has any business telling private citizens what to do with their property after they buy it. There’s no haggling or negotiation going on, they’re buying an expensive car and they want to ship it overseas. What right does the government have to tell them no?” Goldin said.
To tighten the loopholes, luxury carmakers are pressuring dealers to carefully vet would-be buyers and in some cases penalizing dealers.
“In many circumstances, dealers are now requiring buyers to sign what is called a no-export contract. Essentially they say, we don’t want you exporting the car,” Goldin said.
But dealers are in the business of selling cars. And it may be hard to stop exports entirely, especially with so many “legal” gray areas.
After all if tourists can buy iPhones in the U.S. to sell back home, why not a car?
“They’ve had a lot of difficulty prosecuting anyone-and getting it to stop because there are questions about what exactly is going on that breaks any laws,” Bunkley said.
A huge market and a big profit motive with the growing thirst for luxury in China, this is one fight the feds could be battling for some time.