Australia's consumer watchdog is taking legal action against Mazda, alleging it repeatedly refused to refund motorists whose lemon cars lost power while being driven.
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Seven cars sold between 2013 and 2017 had faults within the first two years of purchase, but the manufacturer gave customers the "run around" by not providing a refund or replacement, the Australian Competition and Consumer Commission said.
In four of the seven cases, the cars unexpectedly lost power and slowed while being driven, states the ACCC's legal action against Mazda Australia Pty Ltd filed in the Federal Court on Thursday.
Mazda says it will vigorously defend the legal action.
In one instance, a car allegedly lost power while travelling at speed on a highway, carrying the driver's children home from a holiday.
Another owner told Mazda the car was a "lemon" after it stalled and lost power four times in three months.
Despite the vehicles being taken to Mazda dealers for repairs, including multiple engine replacements, owners were repeatedly denied refunds or replacements and pressured to accept lesser offers, the watchdog said.
"In short, our case is that Mazda gave these consumers the run around while denying their consumer guarantee rights," ACCC chairman Rod Sims said.
Australian consumer law guarantees customers whose vehicles cannot be repaired within a reasonable time, or at all, a right to a refund or replacement.
In this case it's alleged consumers were forced to contact Mazda multiple times over months and even years as the faults continued, but the company told them the only available remedy was another repair.
The firm is accused of, contrary to consumer law, asking the owners to pay towards a replacement car or accept compensation of only a portion of the purchase price.
The ACCC said it was alarmed about the "barrage" of issues issues consumers faced and warned they would continue to take action against manufacturers and suppliers who do not adhere to the law.
Mazda has said it believes it "consistently exceeds its legal obligations".
"It is, therefore, disappointed that the ACCC has chosen to commence legal proceedings against it for alleged breaches of the Australian Consumer Law," the firm said in a statement.
"Those proceedings will be vigorously defended."
The maximum penalty per breach is $1.1 million, and for one of the cars could stretch to $10 million after the upper limit was increased in 2018.
This case related to Mazda models: 2, 6, CX-5, CX-5B, CX-3 and BT-50.
Australian Associated Press
