Rising Canadian dollar could prompt deep price cuts

[siko]

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.

It might not be such a short term phenomenon.... there are much polarised views on the future of the dollar, but most economists are full of **** and are talking out of their asses when it comes to predicting these sort of things.

I remember a small debate on the a few years ago talking about the dollar. There was about 4 economists (from prominent sources) talking and one suggested that in few years the CND dollar would hit par… to that the others pretty much called him an idiot and said that would never happen. Lo and behold today?!

 

[siko]

Volkswagen Canada announces rebates on Jetta, Passat and Touareg

Ajax, Ontario - Volkswagen Canada has announced a manufacturer's sales program on select models for the months of November and December 2007.

Savings will include $1,000 on Jetta, $2,000 on Passat, and $2,000 on Touareg 2 models. The savings will be in addition to APR and lease rates starting as low as 1.9 per cent on select models.

"Our goal is to continue delivering more value and savings to Canadians, as well as to maintain our competitive position in the market," said executive vice-president John White.

Volkswagen Canada is the fourth Canadian automaker in the last month to announce rebates and price reductions on new models. With the strength of the Canadian dollar and lower vehicle MSRPs in the U.S., many Canadians have been going south to purchase their new vehicles.

[Source: CanadianDriver.com]

 

[Matt530i]

I hope that no one is falling for this. A decently equipped Touareg 2 in the US costs $47,120 (USD). The equivalent model in Canada is $59,625. So even after a $2,000 reduction, the price difference is around $14,000 at today's exchange rate. VW has to have some of the larger differences in the marketplace.

 

[Centurion]

Don't forget that European manufacturers have lost a whole lot of money the latest 5-7 years as a result of the falling dollar. So Canadians crying out for price cuts is the least of their problems.

 

[Matt530i]

While most of this thread has been focusing on European companies, the problem exists with US manufacturers as well. In some cases, a car built in Canada costs $6k+ more than the same car exported to the US.

Dealerships are starting to feel a bit of a pinch, as dealership traffic is starting to slow. Whether we're the least of their problems or not, they're starting to listen.

 

[siko]

Don't forget that European manufacturers have lost a whole lot of money the latest 5-7 years as a result of the falling dollar. So Canadians crying out for price cuts is the least of their problems.

No not really, cars were always priced respectively higher then in the US because the dollar was lower. Only if they priced the cars the same as in the US while the dollar was lower then yes, they would have been losing something.

 

[siko]

Volkswagen Canada increases rebates on 2008 Jetta, Passat and Touareg 2

Ajax, Ontario - Volkswagen Canada announced that it has increased the amount of its rebates on some 2008 models. For a limited time, rebates now total $2,500 on Jetta, $4,000 on Passat, and $5,000 on Touareg 2. Earlier this month, the company had announced rebates of $1,000 on Jetta, $2,000 on Passat, and $2,000 on Touareg 2 models.

In addition, any new 2008 VW Eos now benefits from savings of $2,000.

Under the enhanced program, APR rates starting as low as 1.9 per cent have been extended to select 2008 model-year vehicles.

These offers are valid until January 2, 2008.

[Source: CanadianDriver.com]

 

[Matt530i]

I received an email from BMW with new, lower lease rates. They're offerring 3% on the X3/X5/535 and some 3er models and 3.9% on a 528.

They're actually getting close to closing the value vs. the US. It will be interesting to see Canadian sales for November as the first half must be pretty bad.

 

[siko]

Mercedes-Benz Canada announces new rebates up to $10,000 for customers who pay cash

Toronto, Ontario - Mercedes-Benz Canada has announced the introduction of new Manufacturer's Direct Dealer Incentives (MDDI). Effective immediately, the incentives will range from $750 to $10,000.

The company says the CLS550 will benefit from an MDDI of $6,000, while the S450 MATIC will receive an MDDI of $8,000, and SL-Class models an MDDI of $10,000. The incentives are available on AMG models as well.

The incentives are available to customers who pay cash for their purchases, but lease and finance rates will continue to be highly competitive. Due to substantial adjustments, lease rates for the B-Class and E-Class models now start as low as 3.9 per cent.

In addition, participating dealers will continue to waive the first month's lease payment and security deposit on selected models, and will absorb one per cent of the GST on all models, effective immediately.

[Source: CanadianDriver.com]

 

[siko]

I received an email from BMW with new, lower lease rates. They're offerring 3% on the X3/X5/535 and some 3er models and 3.9% on a 528.

They're actually getting close to closing the value vs. the US. It will be interesting to see Canadian sales for November as the first half must be pretty bad.

Yeah I saw that... too bad its only on a very few selected models.

The 328i had a pretty good deal with a 2.0% ALR, which is great. Only the deal excluded the Xi model, which sucks for me.

 

[Matt530i]

Yeah I saw that... too bad its only on a very few selected models.

The 328i had a pretty good deal with a 2.0% ALR, which is great. Only the deal excluded the Xi model, which sucks for me.

Really? All 2007 models are supposed to be at 2.0%. Even the M Coupe is shown on BMW Canada's website with a 2.0% lease rate. For the 2008s, it's a different story, with the 328/35i coupe at 3.9% and the xi's at 4.9%. If you already lease one, they'll drop the lease rate by 0.5% on top of that as a 'loyalty' reward.

I actually ordered a 528i last weekend. We wanted a less common color combo (barbera red with cream interior) so we left it as late as we could. If you buy/order now, they'll hold the current deal under delivery and improve it if it goes lower before delivery.

I figure that dollar seems to be dropping back to a less inflated level and if it drops back below par (say to 95 cents) the manufacturers are going to start pulling these deals.

 

[siko]

True I forgot its on 2007 models... and I called local dealers and none have 328xi in stock.

Anyways ,I'm not shopping yet, so by the time I get around to it, this deal will be long over

 

[siko]

Found this on BMW.ca ....

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Below you will find answers to some of the questions consumers have been asking given the recent changes in the exchange rate between the Canadian and U.S. dollar.

Q:Why do BMW models appear to be less expensive in the U.S.?
A:While on the surface a U.S. vehicle may appear to be less expensive, there are several other factors that would significantly increase the cost of purchasing and owning a U.S. vehicle.

These include:

• Features - Canadian and U.S. vehicles generally have different standard equipment levels; as a result, the base MSRP is not an accurate indicator of the actual price difference. For instance, on the BMW 335i Cabriolet, the U.S. model includes Tire Pressure Monitor (approximate value of $350) as standard equipment on top of the base model. However, additional standard equipment on the Canadian model includes heated seats, lumbar support, auto-dimming interior and exterior mirrors, electric compass, universal garage door opener, through load with transport bag and Park Distance Control. Combined, all of the Canadian equipment would have a value of approximately $2,400, significantly reducing the price advantage of the U.S. model.
• No-Charge Scheduled Maintenance - For a vehicle that is driven average kilometers and serviced on a regular basis, the value of the BMW Canada 4-year/80,000KM No-Charge Scheduled Maintenance program can range from $600 to over $1,000. Any vehicles imported from the U.S. would not benefit from this program. As a result, scheduled maintenance would be an additional ongoing cost incurred by the customer throughout the ownership period. BMW USA does offer a similar program for their vehicles, however, in order to take advantage of these services, it would be necessary for the customer to return to a U.S. Retailer to perform any included services, as this added value feature is not transferable from the U.S. to Canada (and vice versa). This could result in significant additional expense and inconvenience for the customer when one considers the time and cost necessary to travel to and from the U.S. for routine maintenance.
• Importation Costs - Before a U.S. vehicle can be imported and registered for use in Canada, there are several steps that must be taken to ensure that the vehicle complies with Canadian vehicle regulations. Some of these steps include:
  • If the vehicle is less then 15 years old you will require a "letter of admissibility" in order to import the vehicle into Canada. This letter is available from your local Canadian BMW Retailer at a cost of $350.00 and will take 2-5 business days to process. This document will also detail what modifications are required to your vehicle to make it compliant with Canadian standards, i.e. the activation of the daytime running lights, the cost for which may range from several hundred dollars to several thousand dollars depending on the year and model. Please ask your BMW Retailer for an estimate.
  • Once you have the letter of admissibility you must bring your vehicle to a Canadian BMW Retailer and apply for a "recall clearance letter" (Please note: This document will confirm there are no recalls on your imported US BMW and is the only document Registrar of Imported Vehicles (RIV) will accept). The letter will cost $500.00 and take 15-20 business days to process. While your vehicle is there you should have the daytime running lights activated as this is mandatory and can only be done at a Canadian BMW Retailer.
  • Some provinces require a provincial inspection in order for the vehicle to be licensed. Please check with your local licensing office.
  • Federal and Provincial Taxes - all applicable taxes must be paid on the converted vehicle value (purchase price converted to Canadian dollars)
  • Import duty - 6.1% of vehicle value must be paid on most vehicles
  • Customs Brokerage - additional charges for the consumer if they elect to have a third party complete all necessary documentation and import requirements
  • Green Levy and Air Excise Tax - any additional excise taxes also apply to vehicles imported to Canada. The rates are equivalent to that charged for the same vehicle purchased in Canada, the only difference being that for a U.S. vehicle these taxes are paid at the time of import
• Leasing - considering that the majority of BMW customers in Canada lease their vehicles, it should be noted that a U.S. vehicle typically cannot be leased directly in the U.S. by non-residents. In addition, Canadian customers benefit from the strong residual values of BMW vehicles in Canada, including optimal leasing programs and interest rates. Given these facts, the only sound choice for someone interested in leasing is to do so with a Canadian BMW Retailer, through BMW Financial Services Canada.

Q:Can I still lease or finance a U.S. vehicle through BMW Financial Services Canada?
A:No, U.S. vehicles cannot be leased or financed through BMW Financial Services Canada. As a result, the customer must purchase the vehicle outright and is not able to take advantage of sensible monthly lease payments resulting from strong residual values of BMW Canada vehicles, or any special rates and programs that may apply to a specific model or Series.

Q:Do all U.S. warranties and services still apply to vehicles imported to Canada?
A:No, vehicles imported from the U.S. are not eligible for certain services that would otherwise be available to the customer. The absence of such services can result in significant additional cost and inconvenience to the customer during ownership. The following table outlines services affected through importation to Canada:

SERVICE / ELIGIBLE
New Car Limited Warranty -- Yes
Roadside Assistance -- Yes, Only via U.S. phone number
Certified Pre-Owned Program -- No
BMW Assist -- No
No-Charge Scheduled Maintenance Program -- No

Q:Will a BMW Retailer in Canada accept my U.S. vehicle in a future trade/sale?
A:A Canadian BMW Retailer may accept your U.S. vehicle in a future trade; however, imported U.S. vehicles are generally worth less than an equivalent Canadian model. This is due largely to the fact that U.S. vehicles are not eligible for the BMW Canada Certified Pre-Owned Program, thus reducing their potential value to the Retailer and to any subsequent pre-owned Customer. In addition, by purchasing a U.S. vehicle, the customer is not eligible for any lease programs and therefore takes on the full risk of the final re-sale value of the vehicle.

 

[siko]

Volkswagen Canada announces price reductions

Ajax, Ontario - Volkswagen Canada has announced reductions of its manufacturer's suggested retail prices (MSRPs) on most of its 2008 models, ranging from the Rabbit, up to a $700 reduction, to the Touareg 2, up to a $5,800 reduction.

The new prices take effect on Friday, February 15, to coincide with the public opening of the 2008 Canadian International Auto Show in Toronto.

Price decreases were also announced on some upcoming 2009 models, including the Jetta TDI, with a drop by $1,200 to $24,275 for the sedan and $25,675 for the wagon, and the Jetta Wagon 2.5, which drops by $1,500 to $23,475 from the prices announced when the models were introduced at the 2008 Montreal Auto Show in January.

"We have been taking great strides to provide Canadian consumers with affordable German-engineered vehicles," said John White, President and CEO of Volkswagen Group Canada Inc. "These very significant pricing actions not only demonstrate our commitment to the Canadian market by recognizing the sustained strength of the Canadian dollar, but also continue to reinforce Volkswagen's message of affordability. We are a brand that, more than ever, offers great value to the Canadian consumer."

[Source: CanadianDriver.com]

 

[siko]

So V-dub went from rebates to price slashing... I wonder if other GC makers will follow.

 

[siko]

Canadian leasing companies sue gov't and automakers over high car prices

Due to a slumping greenback, the Canadian Loonie and the U.S. dollar are worth roughly the same amount, but the price of most new cars in Canada haven't made the adjustment. Two leasing companies are suing the Canadian government, BMW Canada Inc., Mercedes-Benz Canada Inc. and Mercedes-Benz USA LLC for a cool billion dollars, but not because of the uncompetitive pricing in the United Province.

The leasing companies have filed suit because strict import rules are preventing the companies from buying cars in the U.S. and selling them in Canada. The many fees, procedures and restrictions allegedly resulted in a 20-30% increase in the sale of more expensive Canuk cars. One example is a $350 admissibility charge to import a Bimmer, and a far more ridiculous $500 fee will be levied for bringing over a BMW that has received a recall repair in the States. The leasing companies allege the all those fees and fines enable BMW and Mercedes to sell vehicles that cost between 20% and 35% more than similar US models.

Rather than these two leasing companies, it seems like customers in Canada are the ones who are losing out the most with high vehicle prices. At least the Canadians still have plenty of other cars and trucks that they can import from the U.S.

[Source: Report On Business via Autoblog.com]

 

[siko]

Volvo Canada lowers prices on some 2009 models

North York, Ontario - Volvo Cars of Canada Corp. announced pricing details for its 2009 model year line-up, including price reductions on some models.

The 2009 Volvo vehicle line-up includes standard content increases to the C30, C70, S40, S60, V50 and XC90 and pricing reductions on the C70, S60, XC70 and XC90. The S80 line-up has been expanded with a new, front-wheel-drive model and a new range-topping S80 V8 Executive. As well, the company’s 281-horsepower T6 engine will become available in the S80 and XC70. Other highlights include the addition of the new R-Design variants of the C30, S40, V50 and XC90.

Volvo Canada will announce pricing for the all-new XC60 premium crossover closer to its on-sale date in early 2009.

2009 C30
C30 2.4i - $27,695
C30 T5 - $32,195

C30 2.4i R-Design - $32,195
C30 T5 R-Design - $36,395

2009 C70
C70 T5 - $52,095 (2008 MSRP $56,795)

2009 S40
S40 2.4i - $31,695
S40 T5 - $37,695
S40 T5 AWD - $40,195

S40 2.4i R-Design - $36,195
S40 T5 R-Design - $41,895
S40 T5 AWD R-Design - $44,395

2009 S60
S60 2.5T - $36,395 (2008 MSRP $40,995)
S60 2.5T AWD - $41,395 (2008 MSRP $45,995)

2009 S80
S80 3.2 FWD - $49,995 (2008 MSRP $54,995)
S80 T6 AWD - $56,495
S80 V8 Executive - $64,995

2009 V50
V50 2.4i - $33,195
V50 T5 - $39,195
V50 T5 AWD - $41,695

V50 2.4i R-Design - $37,845
V50 T5 R-Design - $43,545
V50 T5 AWD R-Design - $46,045

2009 V70
V70 3.2 FWD - $42,495

2009 XC70
XC70 3.2 AWD - $44,095 (2008 MSRP $46,495)
XC70 T6 AWD - $51,595

2009 XC90
XC90 3.2 5-seat - $48,595 (2008 MSRP $50,995)
XC90 3.2 7-seat - $54,495
XC90 V8 5-seat - $63,595 (2008 MSRP $65,995)
XC90 V8 7-seat - $65,895

XC90 3.2 R-Design 5-seat - $56,545
XC90 3.2 R-Design 7-seat - $58,995
XC90 V8 R-Design 5-seat - $68,295
XC90 V8 R-Design 7-seat - $70,595

[Source: CanadianDriver.com]