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#13: 06-26-2006, 04:43 PM
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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."