Canadian labor/car prices and the fall of the US dollar
#1
Canadian labor/car prices and the fall of the US dollar
I just go back from a weekend in Montreal. I haven't been up there in at least 3 years and one thing I've noticed is it has gotten a lot more expensive. Not so much in Canadian dollars but because of the exchange rate. $50 American used to get you $75 Canadian. Now a lot of places are exchanging at 1 to 1, the best rate I found was 1:1.05. Yet cars in Canada are still priced a lot higher than in the USA, example: US base Corvette = $45K, Canada base Corvette = $68K.
Canadian dollar = ~94¢ US and by the end of the year they are expected to be equal. When that happens what will happen to Canadian car prices? will they drop to American levels?
Also what about Canadian Auto plants. One of the reason so many plants are in Canada is cheaper labor cost. I can't see CAW taking a pay cut. Maybe we will see more plants built in the USA
Canadian dollar = ~94¢ US and by the end of the year they are expected to be equal. When that happens what will happen to Canadian car prices? will they drop to American levels?
Also what about Canadian Auto plants. One of the reason so many plants are in Canada is cheaper labor cost. I can't see CAW taking a pay cut. Maybe we will see more plants built in the USA
Last edited by Z28x; 06-19-2007 at 08:51 AM.
#2
Interesting..... that 29,000 ish price for an Impala SS in the US being the new price here in Canada, instead of the 36,000 ish it is now.....
Personally I don't see pricing changing too much or too often, tying prices of big ticket items like cars or trucks to exchange rates would be too volatile for the marketplace. I can see prices remaining more or less stable and where they are, despite the near parity in the currencies - sucks to be Canadian I guess - at least in that regard. The only "winner" here is GM (and the other maunfacturers) who will reap additional profits for cars sold here. However, when and if the currency tables flip and the Canadian dollar is weaker than the greenback, there are instances where cars sold here are actually cheaper than a straight dollar to dollar conversion would suggest.
So, I guess I'm saying that there are more factors than just currency rates that go into determining car prices.
Personally I don't see pricing changing too much or too often, tying prices of big ticket items like cars or trucks to exchange rates would be too volatile for the marketplace. I can see prices remaining more or less stable and where they are, despite the near parity in the currencies - sucks to be Canadian I guess - at least in that regard. The only "winner" here is GM (and the other maunfacturers) who will reap additional profits for cars sold here. However, when and if the currency tables flip and the Canadian dollar is weaker than the greenback, there are instances where cars sold here are actually cheaper than a straight dollar to dollar conversion would suggest.
So, I guess I'm saying that there are more factors than just currency rates that go into determining car prices.
Last edited by SharpShooter_SS; 06-19-2007 at 09:21 AM.
#3
Hmmm... so what's to keep me from buying a Vette here and selling it up north for a big profit?
Or for that matter, vice-versa... if I was in Canada, I'd be shopping for a lightly used Vette down in the states long before I'd consider buying one new...
Or for that matter, vice-versa... if I was in Canada, I'd be shopping for a lightly used Vette down in the states long before I'd consider buying one new...
#5
Guy, are you saying that I would not be able to buy a vehicle for personal use in the States and move it to Canada? Or I would have to pay a lot in taxes/customs fee?
I know there is embargo on certain vehicles, meaning some vehicles cannot be exported. One such vehicle is Audi RS4, which costs $66K in the US and costs nearly $100K here.
I know there is embargo on certain vehicles, meaning some vehicles cannot be exported. One such vehicle is Audi RS4, which costs $66K in the US and costs nearly $100K here.
#6
Guy, are you saying that I would not be able to buy a vehicle for personal use in the States and move it to Canada? Or I would have to pay a lot in taxes/customs fee?
I know there is embargo on certain vehicles, meaning some vehicles cannot be exported. One such vehicle is Audi RS4, which costs $66K in the US and costs nearly $100K here.
I know there is embargo on certain vehicles, meaning some vehicles cannot be exported. One such vehicle is Audi RS4, which costs $66K in the US and costs nearly $100K here.
I saw a piece a couple of months ago about buying buying and moving late model cars across the border. For some models it is cheaper than buying a car here. Corvette was an exception. It's actually more expensive to go to the US and buy a new vette and transfer it to Canadian ownership than to buy the car here new - and not just a little bit more expensive either, if I recall it was in excess of $12,000 Canadian in the difference.
For vehicles of varying age or different type it became more viable. As far as the new vette scenario goes I think it has to do with protecting new car vendors and yes it's tariffs, taxes and fees.
Last edited by SharpShooter_SS; 06-19-2007 at 12:43 PM.
#7
"If you don't want to pay our price then we will charge you anyways"
Is a way of protecting the rich from the poor.
#8
that's exactly it.. they are protecting the dealers... so you the regular guy has to buy them from them. So, basically the taxes, fees, and all of that is a way of saying:
"If you don't want to pay our price then we will charge you anyways"
Is a way of protecting the rich from the poor.
"If you don't want to pay our price then we will charge you anyways"
Is a way of protecting the rich from the poor.
If you, as consumer, try to play in the "free" market, you're locked out.
Sigh...
#9
#10
Sharpshooter, I'd like to see the source for your Vette information. Or perhaps it was a misunderstanding. The thing with Corvettes is that from 2003 and up (not sure why it isn't 2005+) they require bumper modifications to be registered in Canada. I imagine that's where the extra $12,000 comes from, not any kind of taxes or tariffs.
As far a customs is concerned, you can bring any North American made vehicle into Canada and not pay any duties. Just pay your GST when crossing the border and your PST when registering at the MTO, and that's it for taxes. This even applies to brand new vehicles. That's NAFTA at work for you. However with new vehicles, most manufacturers will refuse warranty coverage if it's exported when newer than 6 months/10,000 miles (though not all of them).
I'm a frequent grumbler about Canadian car prices (a Sky Redline for almost C$40k? WTF?). But I do understand them. Back when our dollar was worth 62 cents the majority of cars were cheaper in Canada than they were in the US. In fact I recall a very vibrant export business sending low low-mileage SUVs to the US. But all through that time the automakers didn't raise prices significantly. Now that we're approaching parity and the tables have turned, again the automakers are holding constant on the prices. Basically, automakers price at what the market will bear, and since the market pays in Canadian dollars, the prices have little reason to change. From a longer term point of view, it could be argued that price stability is much more important to the market than trying to line up prices with a foreign market.
Another thing to consider is that GM manufacturers about twice as many vehicles in Canada than they sell. Thus when the loonie rises, their manufacturing costs also rise. So GM is not "winning" with a stronger Canadian dollar because they lose more in higher manufacturing costs than they gain in higher sales prices.
As far a customs is concerned, you can bring any North American made vehicle into Canada and not pay any duties. Just pay your GST when crossing the border and your PST when registering at the MTO, and that's it for taxes. This even applies to brand new vehicles. That's NAFTA at work for you. However with new vehicles, most manufacturers will refuse warranty coverage if it's exported when newer than 6 months/10,000 miles (though not all of them).
I'm a frequent grumbler about Canadian car prices (a Sky Redline for almost C$40k? WTF?). But I do understand them. Back when our dollar was worth 62 cents the majority of cars were cheaper in Canada than they were in the US. In fact I recall a very vibrant export business sending low low-mileage SUVs to the US. But all through that time the automakers didn't raise prices significantly. Now that we're approaching parity and the tables have turned, again the automakers are holding constant on the prices. Basically, automakers price at what the market will bear, and since the market pays in Canadian dollars, the prices have little reason to change. From a longer term point of view, it could be argued that price stability is much more important to the market than trying to line up prices with a foreign market.
Another thing to consider is that GM manufacturers about twice as many vehicles in Canada than they sell. Thus when the loonie rises, their manufacturing costs also rise. So GM is not "winning" with a stronger Canadian dollar because they lose more in higher manufacturing costs than they gain in higher sales prices.
#11
To answer the original poster. We still have the health care advantage.
To the import question ... everything you wanted to know is right here ..
http://www.riv.ca/
2 of the 4 vehicles in my sig are of U.S. origin. I saved about 25% on the TB/SS bringing it up from the U.S. of A. or depending on how you look at it.
BTW .. as far as GM is concerned anyway ... it's franchise agreements not the government that prevents the free flow of new vehicles across the border.
To the import question ... everything you wanted to know is right here ..
http://www.riv.ca/
2 of the 4 vehicles in my sig are of U.S. origin. I saved about 25% on the TB/SS bringing it up from the U.S. of A. or depending on how you look at it.
BTW .. as far as GM is concerned anyway ... it's franchise agreements not the government that prevents the free flow of new vehicles across the border.
Last edited by poSSum; 06-19-2007 at 06:10 PM.
#12
Originally posted by R377
Sharpshooter, I'd like to see the source for your Vette information. Or perhaps it was a misunderstanding. The thing with Corvettes is that from 2003 and up (not sure why it isn't 2005+) they require bumper modifications to be registered in Canada. I imagine that's where the extra $12,000 comes from, not any kind of taxes or tariffs.
Sharpshooter, I'd like to see the source for your Vette information. Or perhaps it was a misunderstanding. The thing with Corvettes is that from 2003 and up (not sure why it isn't 2005+) they require bumper modifications to be registered in Canada. I imagine that's where the extra $12,000 comes from, not any kind of taxes or tariffs.
Last edited by SharpShooter_SS; 06-21-2007 at 01:40 PM.
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