May 22, 2002

U.S. buyers purchase up to 12% of all Canadian vehicles

Detroit, Michigan – Bloomberg News Service reports that up to 200,000 Canadian new vehicles are being sold to U.S. buyers each year – that’s more than 12 percent of Canada’s annual new vehicle sales of approximately 1.6 million vehicles. The estimate was made by Chrysler Group spokesperson, Dave Elshoff who also estimated that up to 30,000 Canadian Chrysler cars and trucks are bought by U.S. residents each year.

U.S. car dealers and individuals are attracted by the lower vehicle prices in Canada which can be as much as 30% lower than in the U.S., particularly on high-demand vehicles like the Jeep Grand Cherokee and Honda Odyssey.

Some vehicle manufacturers, such as Ford and DaimlerChrysler, have agreements with their Canadian dealers that prohibit them from selling to U.S. customers, but that hasn’t stopped the flow of vehicles southward.

Bloomberg reports that in order to discourage U.S. dealers from buying Canadian cars, DaimlerChrysler and Honda will no longer pay them for warranty repairs on Canadian vehicles.

U.S. manufacturers are anxious to stop U.S. purchasers from buying Canadian cars because they make more money on U.S. cars. So far, there has been no discussion about harmonizing prices in Canada and the U.S. In Europe, where similar car models can sell for widely divergent prices in different countries, the European Union is attempting to harmonize vehicle prices across the continent.

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