By on October 24, 2007

jim-press.jpgAfter Chrysler's executive [I have a] dream team addressed the issue of Canadian pricing in Sin City, they may soon wish that what they said in Vegas stayed in Vegas. Speaking to WardsAuto, Ex-Toyota Prez Jim Press said Chrysler had inflated their sticker prices north of the border to account for the historic 10 to 40 percent gap between the dollar and the loonie. And now that the currencies are at parity? “Currency is a long-term move," a pressed Press confessed. "It goes one place to another, and when cycles come up, you take (that) into account. What you have to do is price at where the market is, and that’s what we’ll continue to do.” As for Canadian customers who dare cross the border to buy a Chrysler product, the automaker admits it's trying to cut them off at the pass. Steve Landry, executive director-North American sales, told Wards that he's sent memos to U.S. dealers warning them against selling vehicles to Canada on the gray market  Needless to say, Landry claims it's for the customer's own good, considering Canadian auto regs. “It’s not just homologation of an odometer. You have to also change the daytime running lights, which is a pain… Our dealers are more into selling vehicles where they can take care of the entire lifecycle of that customer in that vehicle." Convinced?

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19 Comments on “Chrysler to Canadian Consumers: Go Pound Sand...”


  • avatar
    Jeff in Canada

    So the installation of daytime running lights, and a new odometer is worth a 40% increase in price?
    This is obviously a hot topic on the news programs up here, but at the end of the day, every new car buyer still has a choice. They can choose to go to a dealership in the states ad deal with the hassles of importing, if they feel the hassles are worth the savings, (which in most cases they aren’t) or they can go to a local dealer and the process is easy.
    I’m not in the market for any high-dollar Viper, so the $30,000 price difference doesn’t bother me.

  • avatar
    glenn126

    Canadians historically have given Chrysler and their brands more of a “chance” than Americans, as reflected percentage wise in sales, and this is the thanks they get?!

    Hey, Canadian friends, go look at a nice Hyundai. My wife’s new Sonata is very nice, and it is significantly lower in price than Chryslers, either side of the border.

    Some auto company is going to see a “rather large” (to use a little understatement) increase in Canadian sales when (if) they bite the bullet and simply move prices on-par with where they should be due to the currency valuation. Maybe a couple of percentage points higher than the US price, as a hedge on currency fluctuations – but certainly not 30-40% higher….

    Sure, this will hurt buyers who “just” bought cars. So, for original owners of cars less than one year old, send them a 10% price reduction coupon for their NEXT new car… applicable towards being “upside down” on the trade-in (because, resale values will take a hit).

    Of course, if a company does do this price reduction gig in Canada (Hyundai? I’m looking at you – you’re hungry to increase worldwide sales…) they’ll have to be honest and up-front with customers that US supplied cars may change in price due to – currency fluctuations!

  • avatar
    Martin Schwoerer

    To me this kind of behavior sounds odd: doesn’t the NAFTA have rules against restricting cross-border commerce?

    Any car company that has tried to, say, prevent a Danish BMW dealer from selling a car to a French customer has had to pay millions in fines to the European Commission. That’s the way it works on this side of the pond, anyway.

  • avatar
    NickR

    My chances of buying a Chrysler before I read this? Slim. Now? Zero.

    Maybe he’s actually a saboteur from Toyota, doing what he can to drive Chrysler’s remaining customers to his ‘former’ employer.

  • avatar
    brettc

    Canadian Tire sells a DRL conversion kit for something like $20, so there’s no way adding DRLs costs them that much money. If Chrysler had a clue, they’d just put DRLs into their whole line, like GM and VW have done. Sell it as a safety feature to prospective buyers (if there are any left now). There are still lots of dolts that can’t figure out how to turn their headlights on when it’s foggy or rainy. DRLs attempt to fix that problem.

  • avatar
    Heep

    So, they price according to where “the market is” at, then attempt to control that market so they can keep their price where “the market is?”

  • avatar
    Brendon from Canada

    Pretty sure I paid about $100 CAD to have the dealer turn on the DRLs and switch all the LCDs over to metric… Granted, it’s still expensive compared to 5 minutes required to plug in a car, sit at a computer and offer me a coffee (which was actually decent), but I’m willing to factor in the cost of the hardware to actually do it (ie, darn fancy capucino machines). This was (naturally) not a Chrysler product, but I can imagine that it won’t be long before all manufactures simply make a NA desginated model with various options that can be enabled/disabled as opposed to a CA vs US model… Then again, I suppose that this should have already been done by NA manufacturers to save costs, so who knows?

  • avatar
    John B

    Martin Schwoerer asked: “doesn’t the NAFTA have rules against restricting cross-border commerce?”

    Not that I’m aware of when it comes to individual companies (as compared with government interference). The gray market is perfectly legal in Canada so manufacturers try to prevent it through measures like voiding warranties and threatening dealers in the U.S. A large class action lawsuit was recently launched in Canada against several manufacturers and dealers. The basis of this suit is that the defendants are illegally restricting competition through their actions preventing importation of cars into canada. We’ll have to watch and see how this plays out. Here is some background on the lawsuit:

    https://www.thetruthaboutcars.com/?p=5525

  • avatar
    jeremy5000

    Well that’s nice, he wants us to pay more for a Chrysler for the convenience of bringing it back to the same dealer every time it breaks, and because daytime running lights are a real hassle. I already suspected they didn’t think much of their customers just by looking at the crap they produce, but this Landry guy confirmed it.

  • avatar

    Honda and Toyota and Nissan are all doing the exact same thing. No need to pick on Chryco alone.

  • avatar
    dean

    We’ll see some combination of the following three things happening:

    – Nothing. Canadian buyers are still buying cars at inflated prices at a consistent rate. Why would the manufacturers change anything?

    – Canadian prices will drop under pressures from falling sales rates and an angry public.

    – Automakers reluctant to get off the exchange-rate gravy train will make it increasingly difficult to compare prices by upping base-level equipment specs in Canada. If you can increase the price $5000 by adding $1200 in cost, why not? Some are already doing this. The MINI Cooper MSRP in the US is $18.7k, but over $25k in Canada. I believe, however, that the Canadian base model includes some features that are optional in the US, and that a comparably equipped Cooper in the US comes closer to $22k-$23k. Of course they don’t provide a convenient feature comparison so it would take a fair effort to see exactly what you are getting for the extra money in Canada. And that is my point… make it hard enough and people won’t bother.

  • avatar
    brokenteeth

    I believe residual values in Canada will be affected very soon. For an extreme example, check out: Autotrader.ca and scroll halfway down. Many new imported 2008’s selling for less than well used 2006’s.

    There has been some action, For example some advertised “deals” are approaching US MSRP in Canada, but only for unpopular vehicles that would sell for thousands under MSRP in the US.

    Enabling DRL, changing the odometer is mostly a function of changing computer settings. Its probably worth it to invest in an aftermarket tool for this for the savings you get buying in the US. The manufacturers are full of it.

    Besides the “price” the other scam in Canada in the Destination fee. In the US, typical cost in $700, wheras in Canada it averages $1500-$2000, even when the vehicle is assembled in the same town as I live.

  • avatar
    jl1280

    It’s not such a big deal to import a new or even a good used car from the USA to Canada. Sure you have some paper work to do and have to make some minor changes. Now calcualte what it costs vs what you make. Not much of a decision. And this cost savings doesn’t just apply to cars or just to Chrysler. How about to everything except the food you need this week. Books from Amazon, electronics from anywhere, bicycle parts, airline fares, etc. Retailers and wholesalers can either be competitive or not. That’s their business model. But it doesn’t necessarily win my purchase.

  • avatar
    jthorner

    Big companies love free trade when they are the ones in control of the spending, but they do everything possible to keep the customer from also being a full participant in the free trade regimen.

    Isn’t the message from Chrysler to the UAW “you guys have to be competitive with imports and transplants”? Free trade cuts both ways.

    Oddly enough, this could work to the advantage of Canadian dealers. Retail repair work pays better than warranty work, so if a customer bought their vehicle in the US and needs something fixed they are likely to pay full retail at their local dealer for repairs. Supposedly the margins on new car sales are tiny and all the money is said to be made on service and used cars. Fine, import good used vehicles from the US, convert them to Canadian requirements and sell ’em cheap. Used car resale values in Canada are going to have to take it in the shorts if the $CD to $US exchange rate stays where it is. Used car values on the US side of the border are likely to move up a bit.

  • avatar
    jthorner

    “In the US, typical cost in $700, wheras in Canada it averages $1500-$2000, even when the vehicle is assembled in the same town as I live.”

    Way back when the destination fee varied depending on how far the vehicle was delivered compared to where it was made. Then the companies unified the fee by in theory adding up all the factory-to-dealer delivery costs, dividing by the number of units shipped and then charging everyone the same amount. Thus someone in San Diego pays the same shipping fee for their new Fusion as a customer in Maine pays. Obviously it costs much more to get the vehicle from Mexico to Maine than it does to move it a few dozen miles across the border.

    Can you imagine going into Best Buy to get a new large screen television and having them tack on a destination fee at the register? These fees are just a back door way to increase the retail price while still being able to advertise a lower price. It borders on false advertising.

  • avatar
    Gardiner Westbound

    A Toronto law firm claims it has internal documentation proving Chrysler, General Motors, Honda and Nissan conspired to artificially enhance Canadian automobile prices and profits in violation of the federal Competition Act and provincial Consumer Protection Acts. The Competition Bureau’s well-upholstered civil servants were apparently asleep at the switch.

    http://www.jruslaw.com/classactions/carprice.shtml

  • avatar
    Luther

    Over time the automakers will adjust prices in Cananda lower since the falling dollar is a long-term deal (IMO) and the Loonie is in a long-term up trend since mineral resourses are in long-term demand.

  • avatar
    AGR

    Those guys had a potent Kool Aid in Las Vegas for that dealer meeting.

    Next week when Oct sales figures are out we should revisit this subject and see what spin will be disseminated by the manufacturers.

    Showrooms across Canada have not been as busy as anticipated in Oct, and Sept was down from the previous year.

    An interesting article from The Star
    http://www.thestar.com/Business/article/269802

  • avatar
    glenn126

    Canadian automobile companies and importers need to move NOW to bring prices down for Canadians, no excuses, ifs ands or buts.

    Of course this probably will mean some car price increases in the states since high Canadian prices are “probably” propping up corporate profits and allowing lower MSRP’s on Canadian produced cars sold in the states – just guessing here, but I wouldn’t be surprised to see it.

    In fact, European car prices “must” start moving up since the Euro vs US dollar exhange rate has swung quite violently (i.e. the US dollar value is dropping like a proverbial rock).

    This all COULD be a benefit for the Detroit 2.8 if they really pushed lower prices in Canada by sending US built cars there, and pricing them to take more market share away from Hyundai, Kia, Volkswagen, Audi, Mercedes, etc etc. Assuming, of course, the Canadian public were willing to drive craptastic-mobiles instead of decent stuff, I mean. Of course, I don’t regard VW/Audi or Mercedes as “decent stuff” due to their terrible reliability record (or, is that an oxymoron?)

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