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Smart Shopper Importing Canadian Vehicles to the U.S.
391 messages, Last post on Dec 07, 2008 at 6:29 AM
You are in the Smart Shopper Forum. Your Hosts are kirstie_h & tidester
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Replying to: dusti (Apr 16, 2002 3:53 pm) From the dealer's point of view we are here to sell the product to whoever wants to buy it. It is very frustrating to have to jump through these hoops and to tell someone that no, we can't sell you the truck because we suspect it will be exported. There are larger issues that I'm sure are coming in to play from the manufacturer's perspective though regarding trade agreements, and plain old marketing. For example, the exporting issue has rendered the market for diesel trucks practically non-existant for a regular buyer and there is no such thing as a used diesel truck market. I read that something like 70% of the Thunderbirds sold in Canada are now in the U.S. In fact I've only seen one on the road without a dealer plate since they were introduced. Obviously, situations like these affect how a company markets its products but it still feels like the dealers are caught in the middle. |
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Replying to: dusti (Apr 16, 2002 3:53 pm) dusti is correct (see #7). Let's say you're a manufacturer and just trying to maximize your profit on your blahmobiles which cost $x to produce. Well, you could say that "the price is $y" (where y > x). And you could choose y very carefully to maximize profit. But then one day some joker in your marketing department reads an economics textbook and says, hmm, maybe we should try to get _every_ customer to pay the maximum that _that_particular_customer_ is willing to pay . . .Surely there are some customers who would have been willing to pay MORE than $y for a blahmobile. After all, they rushed in the door on day 1 and paid the asking price. And of course there are some who would pay $x + $100 who we're not selling to right now. So you'd make more money charging lots of different prices rather than just one price $y. Well, of course it's hard to charge a different price to every single customer. The customers start selling to each other! The guy to who whom you sold at $x + $100 resells at $x + $500, to someone from whom you would have otherwise been able to get $x + $2000. But if there are ways to prevent this, by "splitting your market", then you make more money by selling at different prices. In this case, there are only two prices we're talking about, the US price and the Canadian price. But the principle is the same. In general, you make more money selling at 2 prices rather than 1. From the consumer's perspective, this is irritating. Someone else gets to buy essentially the same car for much less. But this goes on all the time, with all sorts of consumer goods. DVD prices, for example, vary quite a lot from country to country. Anytime you see a coupon for something in the paper, that's an example of someone splitting their market. The two parts of the market are the coupon-clippers and the non-coupon-clippers. (There are also other purposes to coupons, but that's not the point here.) Ok, enough economics lecturing for today. |
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Replying to: dusti (Apr 16, 2002 3:53 pm) for more info and experiences with Canadian cars sold in the US......GEO |
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Replying to: dusti (Apr 16, 2002 3:53 pm) Throw in a middleman or two, and it becomes difficult to trace titles and vehicles coming into the US from Canada and there is a LOT of room for profit. Canadian cars certainly should be mfg similarly to those available in the US. But this practice is taking away sales from US distributors and because of the high level of fraud, (see the article) it does not benefit the distributors and certainly not the buyers. I agree with Kristi it is probably the distributors and perhaps with THEIR pressure to the mfgs. They hit the importer where it hurts by not honoring the warranties. I do believe it is that simple. MASSPECTOR - The economies, GNP, demographics, etc. between the US and Canada are VERY different. |
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Replying to: dusti (Apr 16, 2002 3:53 pm) Dusti...Right on. They are all for free trade as long as it benefits them, but heaven forbid it helps the consumer a little. Royce...I did not quite follow your example, but what does TMU mean? I think I understand what you are saying, but it appears to be just a perception thing. A Taurus in Canada is the same as a Taurus in America to me. Just the speedo is different. It doesn't make sense to me that it is worth 1/2 as much just because it started out with a Canadian title. Can't that be switched to a US title? landru...I agree with you 100%. Canadian dealer wants to sell car, american buyer wants to buy for cheaper price, manufacturer moves a unit...what is wrong with this? Are the manufacturers assuming that if you do not buy the car in Canada that you will buy it automatically in the US? The buyer is just using the currency conversion to his advantage, just like it is cheaper to eat in Canada on vacation for an American. What's next, American tourists have to sleep in the street and bring their own food so they can't save a buck on a canadian vacation? I have never taken a businees course, owned a business or been a CEO ( although I like to play one in my fantasies). I am just trying to understand this from a layman's perspective. The scenario of gray market cars seems to only hurt one party, US dealers. Like I said before, The dealer in canada is happy, the buyer form US is happy, and the carmaker sells one more unit. The only person that loses is the dealer in the US that did not get to sell a car. Of course this assumes that the buyer is going to buy a car, period, either in Canada or the US. If manufacturers price their product cheaper to canadian dealers, that may be true, but that makes no sense to me. If I ran the company, I would have a bottom line profit that I wanted from each car and that is the selling price (in my local currency), to whichever dealer buys the car. Of course if we had any factory reps to post here and clear this up would be nice, but they seem to never be on any edmund's boards. And if the manufacturers do price their product cheaper in other countries, then why do they care who buys it? The discussion of gray market products comes up in other products too, such as cameras and electronics. Manufacturers of these products have taken the same tack, not honoring warranties on products bought in other countries. I think that this is unfair to the consumer. The product is identical, just purchased in a different place. They are trying to artifically keep the prices higher in the US market. I will admit that a manufacturer may have a problem with an importer buying 1,000 copies of a product and then selling it in the US, but if an individual consumer wants to buy the identical product cheaper in another country, I do not see a problem with that, and the warranty should be honored. |
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Replying to: dusti (Apr 16, 2002 3:53 pm) Even on factory work .. it awful hard to explain away and people do have a tendency to draw a deaf ear to it ... no matter what the reason. Terry. |
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Replying to: dusti (Apr 16, 2002 3:53 pm) Also, would this be a big issue if I am buying a brand new car at a canadian dealer and the car has say 10KM on it? I am sure that canadian dealers have laws that apply to new and used cars just like here in the US. From what landru said it appears that this is not seen as a problem with cars after they are 6 months sold. Landru, help with this issue. Do you have to issue a statement, like here in the US, that the car is being sold as new and is not used (to the best of your knowledge)? |
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Replying to: dusti (Apr 16, 2002 3:53 pm) If all Canadian dealers sent their cars to the US for an easy sale, what's left to sell to Canadians? Canadian consumers lose again because if cars aren not sold, taxes are not collected. No taxes collected means base tax rates go up and other taxes are increased to make up the difference. The fewer cars sold in Canada means fewer cars needing replacement parts, maintenance, gas, tires, etc. It has a growing impact on a massive part of the Canadian economy. Think about it. Canada does not exist so greedy and cheap Americans can suck it dry. Every nation has tarriffs and trade restrictions in order to protect their native industries and businesses. The continued erosion of the Canadian dollar is not doing anyone any good. On the surface this may look like it only hurts Canada but if you look a little deeper it hurts America too. I encourage all of you to look past your wallets and bank accounts. There's a bigger picture out there. |
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Replying to: dusti (Apr 16, 2002 3:53 pm) U.S. dealers are some of the biggest buyers of vehicles from Canada. Canadian dealers are definitely not happy because as I said earlier they get penalized when they sell a new unit that ends up in the U.S. As bretfraz has suggested there are obviously some larger issues at play here. He is absolutely right that the Canadian market would be destroyed if there were no barriers to Americans buying new cars in Canada. I've already mentioned how the diesel truck market has already been wiped out. In the short term I guess the Canadian dealership would be glad to sell to whoever, but as has been repeated many times here, dealerships cannot survive on new vehicle sales alone. And if everything we sell ends up in the U.S., there goes the used car, service, parts, and body shop business with it. |
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Replying to: dusti (Apr 16, 2002 3:53 pm) I do not think every car buyer in the US would be buying a car in Canada. For some like me, it does not make sense since I live in the SE. I would expect that if I buy a car in canada that I pay their taxes to buy the car. But what happened to NAFTA? I thought we were suppose to have free trade. Free trade is a two way street, buyers and sellers. I admire your concern for the welfare of other countrie's economies, however I find it doubtful that the board of directors at the US auto firms are saying "We need to crack down on gray market cars because it will wreck the canadian economy and eventually trickle down to effect joe sixpack here at home." Manufacturers---your response here--->. I thought so, lots of silence from the manufacturers. I whole heartedly agree with your last two sentences, however the you needs to include automakers and all businesses world wide. But no business is ever too concerned with any effect they have on consumers, unless they are losing business, just next quarters earnings statement so the stock will stay high. But of course we can just fib about that too, until we get caught (read Enron and Worldcom). |
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