interesting article

[thebarber]

Loonie's rise fails to cut car sticker price:

A typical new vehicle now costs 17% more in Canada than in the United
States because automakers have not changed their prices to reflect a
stronger loonie, a new study concludes.

"It appears that, to date, automakers have not adjusted their
[suggested retail prices] to reflect our dollar's new-found strength,"
DesRosiers Automotive Consultants says. "Canadian vehicle buyers have
not reaped the benefits resultant from a strong currency."

The 17% difference represents $5,842 for a typical vehicle, says DesRosiers.

"Vehicle prices in the U.S. haven't changed. Vehicle prices in Canada
haven't changed. But the exchange rate has moved ... up to US90 cents.
And so the U.S. pricing, when converted to Canadian dollars, creates
this differential," said Dennis DesRosiers, the consultancy's
president.

Few people are more aware of the price differential than Subaru
Impreza WRX owners, who are paying about 20% more for their
performance sedans in Canada than across the border.

Canadians hungry for the highest-end Impreza model, the STi, have
begun shopping for them in the United States, even if they have to
jump through regulatory hoops and pay import fees, said Robin Emard,
president of the Ottawa Subaru Club, a group of enthusiasts.

"I've definitely seen a trend, from our club to people in Toronto to
people in Vancouver and Calgary and all across Canada that are
importing cars constantly now," Mr. Emard said. "It's much more
inviting."

Price differentials ranged from 6.3% for compact cars to 18.4% for
luxury sport cars, the consultancy determined, with higher-volume
vehicles being more evenly priced. Contrary to findings in previous
years, only five 2006 models in its study were more affordable in
Canada: the Pontiac Montana SV6, the Toyota Corolla, Hyundai's Elantra
and Accent models, and the Chrysler PT Cruiser convertible.

On the flip side, the Chevrolet Corvette and Lexus LS430 were among
the cars with the highest price differential between the two
countries. Both cost 25% more in Canada, DesRosiers found. The study
measured base and fully loaded models to get a more accurate picture.

The loonie has jumped 5% so far this year against the U.S. dollar
following dramatic gains in the past three years. Statistics Canada
said in its 2005 review that every Canadian household has saved the
equivalent of $294 since the loonie began to rise on durable and
semi-durable goods such as electronics. But there is little evidence
new-car buyers have enjoyed the same savings.

Some of the price discrepancy is already being resolved as Canadian
consumers negotiate better deals, said Mr. DesRosiers.

"The markets are working very well on this," he said.

Mr. DesRosiers said it is unlikely individual customers will turn to
the United States in high numbers because it's simply too complex to
bother and because new-vehicle dealers are often bound by franchise
agreements that prohibit cross-border selling.

He said it is far more probable an active arbitrage market in used
vehicles may be taking place as dealers and wholesalers shop at U.S.
auctions to bring late-model vehicles into the Canadian market at
cut-rate prices.

That's exactly what happened in the early 1990s, when free trade
opened the door to importing larger and luxury vehicles from the U.S.
automakers adjusted their pricing over a year or two and the price
differential disappeared, Mr. DesRosiers said.

THE 24% MAPLE LEAF MARKUP:

Rising buck must mean lower prices on imports, right? Study says no

Price in U.S., (in Canadian dollars) for Subaru Impreza WRX sedan: $28,524

Price in Canada for the same car: $35,495

Based on a listed price of US$24,995 and converted to Canadian dollars
using an average exchange rate from January to June.