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camber 06-22-2006 12:53 PM

Canadian cars more expensive than in U.S.(Globe & Mail)


Canadian cars more expensive than in U.S.

Canadian Press

Auto makers have not adjusted their prices to reflect the strong Canadian dollar and the typical new vehicle now costs 17 per cent more in Canada than in the United States, according to a study by DesRosiers Automotive Consultants.
This differential averaging $5,842 in Canadian-dollar terms reverses a Canadian price advantage of $3,167 when the Toronto-based consultancy first studied the matter in 1999.
DesRosiers noted that the survey released today is based on listed manufacturers' suggested retail prices not actual transaction prices after dickering and incentives, which could yield substantially different results.
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Analyst Dennis DesRosiers noted that the exchange rate with the Canadian dollar near 90 cents US, up from about 67 cents in 1999 has enabled auto makers to be aggressive with Canadian incentives.
However, "it appears that, to date, automakers have not adjusted their MSRPs to reflect our dollar's new-found strength, and Canadian vehicle buyers have not reaped the benefits resultant from a strong currency."
The study found the North American Big Three General Motors (NYSE: GM), Ford (NYSE: F) and DaimlerChrysler (NYSE: DCX) generally have much smaller Canada-U.S. price gaps than auto makers based abroad.
GM, Ford and Chrysler prices average $4,332 over American list prices for passenger cars and $3,639 for light trucks, compared with import-nameplate cross-border differences of $7,939 for cars and $6,432 for pickups, sport utility vehicles and minivans.
The study found General Motors has the closest parity between Canadian and U.S. prices, with a currency-adjusted differences typically less than 5 per cent outside the luxury segments.
Only five models surveyed were more affordable in Canada than in the United States: the Pontiac Montana SV6 minivan, the Chrysler PT Cruiser convertible, the Canadian-made Toyota Corolla and South Korea's Hyundai Elantra and Accent.
The Canada-U.S. price gap was generally smallest for compact and subcompact cars, and widest on high-priced models.
The Chevrolet Corvette and Lexus LS430, for example, "carry an astonishing 25 per cent Canadian-market differential."
The North American Big Three are pricing large pickup trucks almost identically in Canada and the U.S., but Japanese trucks are noticeably more expensive in Canada, with Toyota's Tundra carrying a 25 per cent differential.
The biggest single differential was for the Nissan Murano intermediate SUV, priced 26 per cent higher in Windsor, Ont., than in neighbouring Detroit.
DesRosiers sees five factors behind relatively high Canadian pricing:
  • Prices in Canadian dollars remain flat.
  • Stable prices "have a lot of merit. Drop prices too quickly and consumers will just wait for the next price decrease."
  • The economy and the vehicle market are strong and manufacturers "can get away with these prices."
  • Some foreign auto makers have most of their costs in home-market currencies, not U.S. dollars, and have little or no exchange-rate advantage.
  • Profits in Canada "have been very lean for a long time."
List prices on minivans average 8 per cent higher in Canada, but DesRosiers said the prices actually paid probably align closely with U.S. values because minivans are "one of the most heavily incentivized segments."
Despite the general price disadvantage in Canada, DesRosiers doubts many individuals will brave the complexity of crossing the border to buy new vehicles, although dealers in late-model used cars may exploit the prospects for arbitrage.

subiesales05gt 06-22-2006 01:19 PM

everything in canada cost more:icon_mad: . but we do average more money per year here in canada so its kind of a trade off.

subiesales05gt 06-22-2006 01:22 PM

hey camber. where abouts are you located.

ctown 06-22-2006 04:50 PM

Obviously who ever wrote this article has not imported a car from the US. I would characterized it as a simple process if you did any research using goggle.

LittleBlueGT 06-22-2006 05:26 PM

Sucks to be here now!

Gire 06-22-2006 05:50 PM

Makes me shake my head in frustration every time it's brought up.

$40K CAN for a Leg GT? Plus 14% tax? Thanks Subaru.

+1 on the importing from the States. In another thread I think it worked out to an $8K savings...

But we all know the auto makers aren't going to lower prices in Canadian MSRP's now... if you think that, I have some swamp land to sell you.

johndas 06-22-2006 06:00 PM

Dooh...I was just down at Carte Suby in Seattle...they were great to deal with...they even Warranteed something of mine that broke while I was down there...nice guys...I picked up the rear parrier for my Dog for half the price it was listed at up here...

Works for me...just wish I had imported!

johndas 06-22-2006 06:00 PM

Carter Suby that is...

deimos 06-22-2006 06:09 PM

There was an article in the Toronto Star last weekend as well. Its supposedly fairly easy to do, and cheap, however there can be complications with warranties and such.

I will prob at least look at the option next time I buy a car, the price difference really is silly on a lot of cars.

Gire 06-22-2006 06:47 PM

Search / Read the Klaus thread "import from US- excellent experience"

luvbster 06-23-2006 10:53 PM

its cause we suckers here...they make all the money from us...hahaha.

*Jedimaster* 06-24-2006 08:45 AM

Blame Canada.

camber 06-26-2006 04:43 PM

Looks like there is some backlash from the Canadian Car industry....


Cross-border price study garners flak

by GARY NORRIS -- Canadian Pressposted June 23, 2006 TORONTO - A study finding that the typical new car costs 17 per cent more in Canada than in the United States has "generated a considerable amount of flak from various circles inside and outside the automotive sector," says auto industry analyst Dennis DesRosiers.
The president of DesRosiers Automotive Consultants noted when he released the price data on Wednesday that cross-border comparisons are complex, and he acknowledged Friday that in at least one case the differential was overstated, though in another it was underestimated.
The Nissan Murano mid-sized sport utility vehicle - reported to cost an industry-leading 26 per cent more in Canada after currency adjustments - is much more luxuriously equipped in Canada than the American model with the same designation.
After accounting for the Canadian Murano SE's heated leather seats, sunroof, traction control and other features, the cross-border differential is only about 14 per cent, DesRosiers said.
He added that a review of another vehicle which he didn't name increased its price gap to 17 per cent from 11 per cent.
The changes don't significantly affect his overall findings, he added.
"The salient point is that differentials on these particular vehicles still represent a sizable price differential between the two countries."
His original article, which said automakers have not adjusted prices to reflect the strong Canadian dollar, noted that it's difficult to make precise comparisons because of differences in trim level.
It also said automakers' incentives for buyers likely mean that actual transaction prices don't reflect the list prices the study surveyed.
In a clarifying commentary DesRosiers noted that his firm's cross-border price comparison - which for years showed a big advantage for Canadians when the loonie was weak - is not suggesting that carmakers and dealers are ripping off Canadian motorists.
His original report noted that prices in Canadian dollars remain flat and reducing them quickly would cause sales to fall as consumers waited for further decreases. It also observed that profits in Canada "have been very lean for a long time."
At Nissan Canada, manager of product planning Hugh Wickham said a loaded Murano SE carries a list price of $48,598 in Canada and the comparably equipped U.S. model costs $36,870 US - an 18 per cent difference at the loonie's current level but about 14 per cent at the first-quarter exchange rate used in the DesRosiers survey.
"The U.S. carries a very different packaging structure than we do," Wickham said, noting that items like heated seats aren't in big demand in the southern states.
There are 64 Murano variants in the United States compared with six trim levels in Canada, Wickham added, but the currency-adjusted price differential on comparable models "is below the segment average" computed by DesRosiers.
A precise review of cross-border pricing "would take a full-time analyst," DesRosiers said in an e-mail distributed to his industry clients, adding that this is the most requested analysis his firm does each year in its newsletter.
"We spent a couple weeks on this and that is a lot of our time - remember we don't get paid for this analysis. It is simply part of our newsletter. We would like some OEM (original equipment manufacturer) to fund such a study; none have asked."

algrande 06-27-2006 09:17 AM

I just bought XT Ltd from Carter in Seattle paid 32,000 cdn vs. 46,000 Cdn msrp. no-brainer!!!!

Garandman 07-03-2006 12:24 AM


Originally Posted by subiesales05gt
everything in canada cost more:icon_mad: . but we do average more money per year here in canada so its kind of a trade off.

More money than ???

Income per person in Canada is about 79% of that in the US, according to Canada Beats USA - But Loses Gold to Sweden.

Another source puts per capita income as $31,500 for Canada and $40,100 for the US.

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