Topic: effect of strong canada dollar?

[hjh7575]

exchange rate between canada dollar and us dollar is getting higher.

I think this might be the pressure of lowering the price of cars from USA.

So I think we, canadians, can get more discounts than before on cars made in usa.

what do you think about it, guys?

[s60]

no it won't have this effect, read Snowmans post http://www.cartalkcanada.com/forum/index.php/topic,40184.0.html
this is the effect of a high CAD $.

[si]

That explains their cars built in Canada

But what about such cars as the Subaru WRX/STi.  When they were introduced our dollar was weak and we now pay about $10k CAD more than we should compared to US.  You'd think third party countries should make it cheaper for Canadians.

[AVToller]

Unfortunately, I think Canadian drivers have now become accustomed to paying more than Americans for our cars, and the manufacturers know it. I think they have very little incentive to lower their prices in response to the higher dollar. 

[Snowman]

It’s not just the exchange rate that determines the price of the automobile. Canada has a small population spread over a huge landmass. Compared to the US Canada has a low sales volume, limited dealer network, and higher unit costs for marketing, administration, and compliance to specific regulations

[froggy]

I guess they'll sell their cars at the highest price the market can bear. Just more money (or should I say less loss) for the US manufacturers....
Japanese do not change their prices daily based on the ¥ strength.... 

[ovr50]

There are those in the NA auto industry that complain that the Japanese Federal Govt. helps keep the yen/dollar exchange down (ie. the yen low) in order to allow Japanese companies to better compete in the NA market. Is there truth to that? Maybe, but like a lot of things in the area of global economics, it is not quite that simple.

The Japanese companies are quite sensitive to criticism, which is partly why nearly all of them have built substantial manufacturing plants in the US and Canada. They do not wish to "rock the boat" as to Japanese companies having an unfair advantage.  There are some in the US unions that still believe that Japan is an enemy.

Actaully, it is unlikely that Toyota, Honda or Nissan would like to see any of the US Big 3 fail. It would put more heat on them - and the US ppl can be quite "protectionist" when their own ox is being gored.

[AVToller]

  There are some in the US unions that still believe that Japan is an enemy.

Actaully, it is unlikely that Toyota, Honda or Nissan would like to see any of the US Big 3 fail. It would put more heat on them - and the US ppl can be quite "protectionist" when their own ox is being gored.

I love your tendency toward understatement!! 

[chris]

Actually Japan and other asian countries do purchase USD to keep it high relative to their currency.  However, for many, many years the US has had a strong dollar policy and has worked to keep the value of their currency relatively strong (although that may be changing now).  All that means is that raw material costs for US co's are less while relative finished product sales are higher for others.  No, it's not a perfect balance but neither has it been a secret (strong USD policy) for... 30+? years! 

Anyone have an idea of how much product percentage wise that Nissen and Toyota build in NA vs. Japan?  I'm guessing the majority of product sales of Nissen and Toyota are subject to the same currency and regulatory constraints as the Big(ish) 3.

In any case, all consumer products are priced as high as possible - what the market will bear for the volume you want to produce.  Don't expect prices to fluxuate too much with currency changes!

[sterling]

Canadians have become used to paying more than Americans? Maybe. But five years ago, the exporting of vehicles to the U.S. was a huge issue for manufacturers. And it wasn't happening because Canadian cars were more expensive.

[random006]

Canadians have become used to paying more than Americans? Maybe. But five years ago, the exporting of vehicles to the U.S. was a huge issue for manufacturers. And it wasn't happening because Canadian cars were more expensive.

Exactly so Sterling, exactly so.

I recall reading the same things.  It implies that the price of cars in Canada had been adjusted to our lower standard of living and a much lower dollar (at the time).  The difference was so much that there were several cases of cars destined for Canadians were surrepticiously bought by American dealers because they could make a high margin on the resale to an American.

Today it might be different but I'm not so sure.  What we need is someone who has access to ALL the figures to truly determine who is getting a better deal.

[Snowman]

http://www.theglobeandmail.com/servlet/story/RTGAM.20050914.wmanufacturing0914/BNStory/Business/

[ktm525]

It pisses me right off as a Volvo V70R stateside is listed at $48000k US ($57 600 at a 1.2 exchange) while the Canadian price is around $64 000.  This $6400 of "slush" will hopefully disappear in the near future. I heard Canada may get Volvo's discount price (offered in the US) on their oversea delivery program.

[s60]

United States — Population: 295,734,134
Canada — Population: 32,805,041

Snowy posted this before, and it is the main reason many products/services cost more in Canada

[eddy4]

every time the U.S. dollar drops against the Looney the owners of most U.S. owned canadian autoparts plants start to look at Mexico/China /India /Brazil..... as the next land to rape and pillage