Rising Canadian dollar could prompt deep price cuts

[Matt530i]

Re: Canadian Loonie reaches parity with U.S. dollar, so why are Canadian cars more ex

I don't understand the legal basis for the suit. Yeah, prices in Canada are higher than the US but there's no law that says the auto companies have to charge the same price in both countries. Market forces would suggest they should be closer though.

NAFTA gets into governments having to treat companies and individuals equal regardless of their country of origin but it doesn't extend to companies' behaviour as far as I know.

 

[siko]

The law suit is silly and will surely be thrown away by the first judge it passes by. At best, they are aiming for some sort of settlment to avoid bad publicity.

And I sincerely hope it will generate a wave of negative publicity for manufacturers and hopefully really bring out the issue to the public (who might not be as aware of the price difference as we may think).

 

[siko]

I just watched the news and got more details regarding the lawsuit.

The class-action is actually against only the manufacturers that deliberately refused to sell cars to Canadians (notably Honda) or those who void warranties when the cars are brought across the border. Both of those practices are deemed anti-competitive.

Target manufacturers are GM, Honda, Chrysler and Nissan. Toyota and Ford are expected to be added. GC manufacturers are not included since they both sell cars to Canadians and honour their warranty.

A similar suite was launched in 2003 in the US… back then the scenario was opposite and some manufacturers denied warranty claims to Americans who purchased a car in Canada.

So there’s actually some merit to this case after all.

 

[450SEL6.9]

Lawsuits like this happen because the Canadian legal system has bitten the class action bug. I'll have to check this fact, but I think class-action lawsuits weren't allowed prior to 1998 or 1999. If they were allowed, they were used in very limited ways.

 

[siko]

Lawsuits like this happen because the Canadian legal system has bitten the class action bug. I'll have to check this fact, but I think class-action lawsuits weren't allowed prior to 1998 or 1999. If they were allowed, they were used in very limited ways.

They still are fairly limited (at least compared to the States)... but this one has anti-competitiveness charges, which were always valid in the past.

 

[Bartek S.]

Porsche car prices: U.S vs. Canada
In our previous article, we wrote about Porsche slashing their prices in Canada to keep up with the recent changes in the U.S dollar vs Canadian dollar parity. We have also mentioned that the price discrepancy between U.S and Canada is still fairly large and we think it could be interesting to show you how this relates in some of the Porsche models base prices.
2008 Cayenne Tiptronic
2006/2007 MSRP: 64,300
2008 MSRP: 59,400
2008 Cayenne
2006/2007 MSRP: 60,100
2008 MSRP: 55,200
Current U.S. MSRP: 43,400
2008 Cayenne S
2006/2007 MSRP: 80,100
2008 MSRP: 72,200
Current U.S. MSRP: 57,900

2008 Cayenne Turbo
2006/2007 MSRP: 126,900
2008 MSRP: 115,300
Current U.S. MSRP: 93,700
2008 Cayman
2006/2007 MSRP: 69,600
2008 MSRP: 63,500
Current U.S. MSRP: 49,400
2008 Cayman S
2006/2007 MSRP: 83,300
2008 MSRP: 75,300
Current U.S. MSRP: 59,100
2008 Cayman S Porsche Design
2008 MSRP: 89,100
2008 Boxster
2006/2007 MSRP: 63,600
2008 MSRP: 58,100
Current U.S. MSRP: 45,800
2008 Boxster S
2006/2007 MSRP: 77,300
2008 MSRP: 70,200
Current U.S. MSRP: 55,700
2008 Limited Edition Boxster
2008 MSRP: 61,700
2008 Limited Edition Boxster S
2008 MSRP: 73,900
2008 911 Carrera
2006/2007 MSRP: 100,700
2008 MSRP: 93,200
Current U.S. MSRP: 73,500
2008 911 Carrera S
2006/2007 MSRP: 114,800
2008 MSRP: 105,800
Current U.S. MSRP: 83,800
2008 911 Carrera Cabriolet
2006/2007 MSRP: 114,800
2008 MSRP: 105,800
Current U.S. MSRP: 83,800
2008 911 Carrera S Cabriolet
2006/2007 MSRP: 128,900
2008 MSRP: 118,400
Current U.S. MSRP: 94,100
2008 911 Carrera 4
2006/2007 MSRP: 108,700
2008 MSRP: 100,400
Current U.S. MSRP: 79,400
2008 911 Turbo
2006/2007 MSRP: 170,700
2008 MSRP: 158,300
Current U.S. MSRP: 126,200
2008 911 Carrera 4S
2006/2007 MSRP: 122,800
2008 MSRP: 113,100
Current U.S. MSRP: 89,700
2008 911 Targa 4
2006/2007 MSRP: 119,100
2008 MSRP: 109,700
Current U.S. MSRP: 87,000
2008 911 Targa 4S
2006/2007 MSRP: 133,200
2008 MSRP: 122,400
Current U.S. MSRP: 97,300
2008 911 Carrera 4 Cabriolet
2006/2007 MSRP: 122,800
2008 MSRP: 113,100
Current U.S. MSRP: 89,700
2008 911 Carrera 4S Cabriolet
2006/2007 MSRP: 136,900
2008 MSRP: 125,700
Current U.S. MSRP: 100,000
2008 911 Turbo Cabriolet
2006/2007 MSRP: 171,000
Current U.S. MSRP: 136,500
2008 911 GT3
2006/2007 MSRP: 147,300
2008 MSRP: 133,800
Current U.S. MSRP: 107,500
2008 911 GT2
2008 MSRP: 235,400
2008 911 GT3 RS
2006/2007 MSRP: 171,200
2008 MSRP: 155,100
Current U.S. MSRP: 124,900

 

[Matt530i]

Okay, so my good friends at BMW Canada finally got back to me with their response:

"Thank you for contacting BMW Canada.

In response to your inquiry, the balance of the New Car Limited Warranty of 4 years / 50,000 miles (or 80,000 km in Canada), whichever occurs first, is honoured in both Canada and the United States through the BMW Retailer network.

Please note that the Maintenance Program (Service Inclusive), Roadside Assistance and the Certified Series Protection Plan on vehicles purchased in the United States cannot be transferred to BMW Canada and will not be honoured once the vehicle is imported.

We are very cognizant of the U.S. pricing; however, we have to price for the long term in Canada. If we were to reduce prices on all new BMWs, it would reduce the value of every existing BMW in the country. We have a responsibility to protect our existing owners’ investment and BMW resale values in Canada. Raising and lowering prices based on short term exchange rate swings would cause great uncertainty and instability in the market.

When looking at importing a car from the U.S., one also has to take consideration the following items:

-Importation Duties
-Recall Clearance Letter (see attachment)
-GST/PST payable upfront
-Cost of complying with Canadian standards
-Inability to use attractive BMW Financial Services Canada Leasing / Financing Programs
-Scheduled Maintenance Costs (while the warranty remains with the vehicle, the scheduled maintenance does not transfer from the U.S.)
-Benefits of higher prices at Resale time
-Supporting and benefiting from your local Canadian BMW Retailer’s investment in facilities, and customer experience.

Please find attached an overview of the Recall Clearance Letter process for vehicles being imported into Canada from the United States and the associated fees."

This is pretty much what I expected. I'm generally disappointed that this standard response assumes that I'm uninformed (or stupid depending how you look at it)...

 

[siko]

Thanks for sharing Matt.

What does the "Recall Clearance Letter" contain exactly?

 

[Bruce]

Thanks for sharing Matt.

What does the "Recall Clearance Letter" contain exactly?

I obviously cannot tell you what Matt actually recieved, but I am more than familar with "Recall Clearance Letters". It is as it says, before you can take a car over the border they require that no out-standing recalls are required; specifically those which pertain to the vehicles' safety.

Honestly, it's just a bunch of rubbish. My Father took a car over the board a couple of years back (a BMW E34) and before he was able to do so he had to get a long over due recalled radiator cap replaced.

 

[Matt530i]

I forgot to mention the best part. BMW Canada charges $500 to provide the recall clearance letter.

 

[siko]

Regarding importing a car, I found this post on another forum regarding the import of a new C-class.

What was interesting was that the cost of conforming the vehicle to Canadian regulations was over 4.5 k$ !!

So all that to say, this additional cost cannot be neglected.



Thread here:
Modifying a US C230 To Meet Canadian Standards - MBWorld.org Forums

 

[Matt530i]

I think that Mercedes' have more things that need to be adjusted.

I checked out photos of the E-Class and new C-Class and neither so kilometers on the speedometer (don't know if the odometer can be changed electronically).

I checked with RIV and they told me that for a BMW, the speedometer doesn't need to be changed (it shows kms on an inside ring). Daytime running lights need to be activated and they didn't mention anything about the bumper but it was a rather generic answer. I've contacted a US dealer to find out the some of the questions.

 

[siko]

Agreed Matt, not all manufacturers have the same level of required modifications.

I was simply using it as an example only.

 

[Matt530i]

I wasn't trying to say that it shouldn't be a consideration, just that I'm trying to find the same information out for BMW.

I agree with what one of the guys at MBWorld.org said, that said Mercedes in Canada seems to be trying to make the conversion costs so high that it makes it not worth it for Canadians to shop in the US.

At the end of the day, I think I will just end up using most of my research to just negotiate a better price here to avoid all the hassle which seems considerable.

 

[siko]

BMW just put all their MY2008 on the configurator... I noticed the priced haven't changed (at least 3er and X3) .

Further, to compensate for not upping their prices, they slightly increased the options. A same config 328xi is about 500 bucks more expensive.

This sucks, guess my run of 3er ends with this one and next year I'll be driving a C300 4Matic... which is cheaper and offers way more.

 

[Matt530i]

BMW just put all their MY2008 on the configurator... I noticed the priced haven't changed (at least 3er and X3) .

Further, to compensate for not upping their prices, they slightly increased the options. A same config 328xi is about 500 bucks more expensive.

This sucks, guess my run of 3er ends with this one and next year I'll be driving a C300 4Matic... which is cheaper and offers way more.

I went to BMW Toronto last weekend to test drive a 535i (which is an amazing car with the M package, btw).

They're not willing to concede the currency adjustment issue. Their story on the whole currency thing is that Porsche had the highest margins in Canada so they could afford to lower their prices and they provide better financing deals (i.e. low lease rates, at least on the 5er).

My wife and I don't need the power of a 535i so we were trying to work something out on a 528i. They were willing to knock of 3.5%. We wanted around 5.5% (what we had on our last car). As I kept saying I could achieve savings buying in the US (where'd I have to buy) they said they would knock off an additional $5k (the 'value' of the leasing deal on the 528) if we pay cash. We prefer to lease, so we're going to shop around some more to see if we can't get a better deal.

Don't automatically give up hope though, they're willing to do something behind the scenes.

 

[Bartek S.]

New website helps Canadians import cars from U.S. for less


Last month we became very interested in the plight of Canadian consumers after witnessing first hand the disparity between the price of automobiles in their country and the U.S. The disparity became crystal clear when the Canadian Looney and U.S. dollar spent some time at parity, which revealed that, for instance, a Lincoln Navigator starting at $47,755 in this country goes for $76,299 in Canada. The range of disparity varies from car to car, but it's there on every model sold in the Great White North.

The obvious workaround here is for Canadians to buy their cars in the U.S. and import them into Canada. It's not an easy thing to do, but until automakers address the inequality of MSRPs (they may be forced to), it remains a worthwhile endeavor. That's why we were pleased to be pointed to the ImportCarCanada.com website that helps Canadians navigate the mine field that is cross-country importation of autos.

Navigating the site ourselves we learned a few things that were news to us. For instance, did you know there's a list of admissible vehicles in Canada? Sorry Ford Thunderbird fans (hello, anyone?), you're not allowed to enjoy the maple syrup above the border. Also, if the vehicle you're buying was built in North America, you don't have to pay taxes on it or duty fees at the border. Buy a BMW built in Germany, however, and you'll be hit with a 6.1% duty fee. Finally, customs is obviously a nightmare, and the site offers many guides to help Canadians keep their forms in order.

None of us on the Autoblog team lives in Canada and thus enjoy the relatively inexpensive cost of owning a car here in the U.S., but we're glad to know that Canadians can do something about the short end of the stick they're left holding.

 

[siko]

Volvo's reaction to the dollar...



Volvo Canada announces new cash rebates for all buyers

Toronto, Ontario - Volvo Cars of Canada has announced that, effective yesterday, a new program will offer customers a rebate of up to $5,000 toward the purchase price of a Volvo, regardless if it is a cash, finance or lease transaction. The program covers the S40, S60, S80, V50, XC90, C30 and C70 models.

"Volvo Canada and its retailers review all customers equally," says Steve Blyth, President and CEO of Volvo Cars of Canada Corp. "The company will not offer an incentive program to cash-paying customers that is different than one offered to our finance or lease customers. This new rebate program will be available on the majority of Volvo vehicles to all customers, regardless of how they would like to conduct the transaction."

The incentive program is focused primarily on model-year 2008 and remaining model-year 2007 vehicles, and offers different cash rebates according to the nameplate.

"This new cash rebate program, when combined with some of the industry's best lease and finance rates, gives potential Volvo customers a compelling reason to visit a Volvo retailer in Canada," Blyth says. "We have lease rates starting from 2.9 per cent and finance rates starting from 3.9 per cent.

"We realize Canadians are looking to the U.S. market and comparing prices of vehicles with the same nameplate. We hope they also notice that Canadian Volvo vehicles have a longer list of standard equipment, a more comprehensive warranty offer and a retailer network equipped with parts to service built-for-Canada vehicles. That said, we recognize that the price is perhaps the most important factor in a purchase decision. Our plan is that this new rebate program will help customers avoid considering the added cost, hassle, time and intricacies of importing a vehicle from south of the border."

 

[Matt530i]

I truly hope that BMW takes this approach and adds something onto their lease program. I'm shopping for my next car and so far BMW isn't willing to go beyond their 'special' lease rate that they've basically had on since I leased my last car in '05.

I'm at the point that, even though I want another BMW, if they're not going to do something about the fact they sell cars to Americans for a lot less I'm going to just not get one at all. I'm even tempted to not get one ever again as I'm truly disappointed in them as a 'premium' retailer.

 

[450SEL6.9]

I'm not defending the retailers, but how can they really alter prices based on what many believe is a short-term phenomenon?

The fact of the matter is the Canadian dollar is so egregiously overvalued, according to many businesses and currency traders. It's gained 20 cents this year! It gained 2-cents on Friday on the back of a jobs report that is not that impressive. The 2-cent gain based on that jobs report was irrational in my opinion. The dollar is clearly going to 1.11 to 1.15 against the USD, based on momentum trading alone. I think there's a bubble in the Canadian dollar and many carmakers probably see it that way as well.

P.S. I'm kind of sick of watching the news reports about the surging dollar because I think they are naive. They always seem to interview teenage Paris Hilton wannabes when they report on the dollar. They always talk about these teens going down south to shop to take advantage and how Canadians are "proud" that their dollar is worth more than the greenback. I'm Canadian too, but the surging dollar has huge implications for things other than teenage shopping and national pride.