Loaded Ford F-350's in the US and then... in Canada... Interesting

[Lenny]

http://www.globeinvestor.com:80/servlet/ArticleNews/story/RTGAM/20070926/wcarsuit0926/

There is a 30 Grand spread in the two vehicles, identical other than speedometer and decals/badges and yet we are on par for the Buck... :(

Interesting article. Many are aware of it. And NONE of the Dealer profit goes towards HealthCare.

:(

[VetteLT193]

http://www.globeinvestor.com:80/servlet/ArticleNews/story/RTGAM/20070926/wcarsuit0926/
There is a 30 Grand spread in the two vehicles, identical other than speedometer and decals/badges and yet we are on par for the Buck... :(
Interesting article. Many are aware of it. And NONE of the Dealer profit goes towards HealthCare.
:(

I don't know... if the car manufactures are smart enough to play well with each other and all do the same thing then you'd think they would do it in the USA too.

There isn't anything in the article about cost. If it costs more, for whatever reason, to send the car to Canada then it is going to cost more to the consumer. My guess is there is some other costs driving things up and in order to avoid dealers in Canada going out of business, the Manufacturers scare the dealers in the US.

[boxy]

Lenny, my Dad and I were talking about that article this morning. He's seriously considering buying a car South of the Border. He lives as close to the dealers in Watertown NY as he does to the dealers in Brockville Ont, plus he's in Florida 6 months of the year, so warranty work won't be a problem.

Vette, some of the models they are talking about are made in Canada then shipped to the US, and they are still more expensive.

[VetteLT193]

Lenny, my Dad and I were talking about that article this morning. He's seriously considering buying a car South of the Border. He lives as close to the dealers in Watertown NY as he does to the dealers in Brockville Ont, plus he's in Florida 6 months of the year, so warranty work won't be a problem.
Vette, some of the models they are talking about are made in Canada then shipped to the US, and they are still more expensive.

Beyond shipping there are other costs associated with building cars.

for example, in the US, every combination of each car has to be tested for gas mileage etc. and there is a fee associated with it. What I mean by every combination is, if you have a Honda Accord, and it is available with 4 cyl manual, 4 cyl auto, 6 cyl manual, 6 cyl auto; then Honda would have to have 4 different tests done and it is very expensive. I assume Canada has their own set of rules, regulations, and fees for auto manufacturers along with taxes, shipping etc. it winds up being a different cost.

I just can't see all the car manufactures getting together and doing this. One manufacturer would have gotten greedy by now, cut the prices down and sold a bajillion cars, and all the other manufacturers would have to follow to keep up.

Also, That article is so horribly written it is hard to tell. It compares some of the most widely optioned cars available (meaning, a car could sell for a little or a whole lot of money), compares 'lease sales price' (which is a total BS price) to advertised price in the US (another BS price in the other direction).

[gcarter]

I'm not hijacking this thread, but I have friends in Brittain where they have similar problems.
A Brit can go to Belgium or Holland and buy a new Volvo, for instance, take it home across the channel, pay taxes, and save $7K-$10K.
It's very blatant what the dealers are doing. Unfortunately, there were not any laws against it.

[roadtrip se]

At least when it comes to what a dealer pays for the car and what the MSRP is to start with on the showroom. Yes, a dealer can mark up the price on a hot vehicle, like the Shelby Mustang for example, but this is pretty rare and short lived.

Not that I buy it completely, but the reasoning I have been given when asking about north of the border pricing is the regulatory burden of certifying a vehicle for use in Canada, as well as the general lack of volume sold there. You still want infrastructure, parts, and dealer service departments to warranty and maintain your vehicle. This all costs money to set up and support. The USA generates 16-17M units per year and Canada is a fraction of this.

Ironically, the dealer margins in CA aren't that much different on new vehicles than in the US, so they have have to sell a lot of used cars, service, and parts to make money. A lot of Canadians just can't qualify to carry the note on these marked up beasts, so the dealer sells even less new volume. Even worse, less than 30% of people return for service after the warranty is out
and vehicles don't break like they used to, so the dealer gets squeezed even further.

I have seen a lot of press on this suit in the industry rags. Unfortunately, I wouldn't count on anything coming from it very soon.

And before someone wants to jump into my cheerios about this, I have been in the automotive space my entire career.
Growing up hanging around a Ford store, marketing software and training to dealers, and now working with large OEMS to design custom applications and training to help dealers treat you better as the customer. As for getting dealers to actually treat you better as the customer, I like to say that my work will never be done. And I did not sleep at a holiday inn express last night.

[boxy]

Todd isn't a lot of the regulatory change (7 kph bumpers, daytime running lights.....) due to lobbying by the big 3 OEM to prevent northern flow of southern cars ?

As for the the general lack of volume, you're right. People forget we have a population roughly equal to New York State, only we are spread from the Atlantic to the Pacific.

[roadtrip se]

But I sincerely doubt the big three have much real influence over it.

A classic example of how the CA government messes with the market has to do with your gas prices and the supplemental taxes on SUVs. That pushes CA customers to Asian cars for mileage purposes hurting the big three, who still make their biggest profits on suvs, trucks, and larger cars.

The big three don't want to build a different car for every market as this just costs them money. For example, the attempt by California and several New England states to force stricter air pollution controls is being fought by all of the car manufacturers, because it introduces more complexity and raises costs to manage. They would prefer to see one reasonable standard across all markets a car is sold in, even if it is a higher standard like pollution controls. Ultimately, the consumer pays for the stuff to meet regs any way.

No the OEMS, including the Asians, can and will be a lot heavier handed and just void your warranty in some instances.

[Lenny]

Todd, "folks" here buy from Washington State and Oregon all the time. Put decals on the speedometer for Kilometers and add the appropriate lighting (which in most cases is none).

Why tho, is a truck off the assemble line, LOADED, 72$K here and about 50$K there??? Is it the population? and units sold?

A NEW Ford van on special (dozens actually) at a car Dealer on my way home today in Northern Washington was $16,250. The SAME van here, is currently $31,500. :(

[roadtrip se]

Why tho, is a truck off the assemble line, LOADED, 72$K here and about 50$K there??? Is it the population? and units sold?
:(

Yes and yes. At least that is what the OEMs state as their justification.

As I stated earlier, the results are fewer sales of hyper-inflated new vehicles,
dealers that get squeezed, and pissed off Canadian customers.

[boxy]

It's a deckal.... :wink::yes::pimp:

I thought you pronounced it deeeeecal.... :D :propeller: :D

[Lenny]

Ok Todd, that "kinda makes sense" ... but what I do NOT understand is that this "SPREAD" we'll call it, existed in the same proportion when we had a $.61 US dollar and that was the logic THEN for the difference in vehicles. Today, our dollar opened up at $1.02 US :eek: so I don't buy the theory shift as it now applies to the difference in the two prices.

Boxy, I guess the local boat shops in Toronto will have to drop the price of their DONZI's soon as well. ;)

[JPR]

The same thing happens with larger trucks. I bought 4 trucks in the US last year as the dollar made it's march upward. It is not that hard to import a new vehicle. You have to pay the taxes, do a RIV inspection (Registrar of Imported Vehicles), change whatever is not in compliance (usually a daytime running light relay, the speedos usually have both calibrations) then you are away to the races. One thing to note, the manufacturer does support it's dealers in so far as the warranty will not be honoured at a Canadian dealer for 6 months. If something major goes wrong, you would have to take it back accross the line for warranty service. I found the price differntial and stock availablility to make it worth the risk.

[boxy]

Boxy, I guess the local boat shops in Toronto will have to drop the price of their DONZI's soon as well. ;)

FrankC and I were talking about that the other day. There are going to be a lot of Canadian boat owners who bought boats 4-5 years ago who are going to be really upside down if they try to enter the used boat market in the next year.
A $9000 Donzi cost $15000 5 years ago, it costs a little more than $9000 today.