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Gm's Response To Unfair Canadian Pricing

Raymond Lowe

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Raymond Lowe Enthusiast

Raymond Lowe

Posted
Posted

This is the e-mail response I got from GM today. My truck is $10,500 more MSRP than the same truck from the same assembly line in Oshawa that is currently being sold in the states. And our dollar is currently worth more.

 

 

Thank you for your e-mail.

 

In response to your comments regarding the price difference between products sold by General Motors Corporation (GMC) in the United States and General Motors of Canada Limited (GMCL), we must clarify that these two divisions of General Motors operate independently of each other.

 

There are basic economic differences between Canada and the United States and, as such, vehicle pricing, parts pricing, service pricing and purchase incentives are not concurrent between the two divisions. Canadian pricing is determined in accordance with what the Canadian market dictates or demands. Canadian vehicles are not priced based on U.S. pricing plus exchange, but rather on the basis of the Canadian marketplace and for the purpose of being competitive.

 

We appreciate your comments and thank you for contacting General Motors of Canada Limited. Please visit our website again!

 

 

$10,500! Somehow the word competitive seems a little out of place here.

redvett Senior Enthusiast

redvett

Posted
Posted

This apples to everything thats sold in either country. When the US dollar was high the cost of products in Canada were cheaper. Now its the opposite.

Zembonez Senior Enthusiast

Zembonez

Posted
Posted

I'm no expert on dollar valuations or exchange rates but that would be a part of any comparison.

 

All vehicles are subject to transportation costs, marketing costs, several forms of taxation, and government regulations on top of their production costs dependent on their place of sale. These costs can vary greatly between any two countries. Can't say where the difference in price is exactly but I'm sure it is cost related. GM is in the business to sell this stuff... not collect it.

 

Cost of selling anything decreases with volume. If they sell less of them in Canada (which is true) there is a greater marketing cost per vehicle... Add to that the fact that Canadian regulations are a lot different than US regulations. Government is heavily involved up there. Anytime the Government is involved, you get hosed. Probably even more since Canada is somewhat socialist in nature. A lot is "included" in your product costs that isn't in the States.

montanajohnca New Member

montanajohnca

Posted
Posted

I am in Canada and really do think we are getting ripped off.

 

To go one step further, I just dropped by my local dealer and he has 3 units (07 Tahoe, 07 Burb, and 3/4) on his lot, used from a GM auction in the US. All have US speedo's. I guess it's OK for the dealer to pick up the cheap rigs and sell them for higher Canadian prices.............

Zembonez Senior Enthusiast

Zembonez

Posted
Posted
I am in Canada and really do think we are getting ripped off.

 

To go one step further, I just dropped by my local dealer and he has 3 units (07 Tahoe, 07 Burb, and 3/4) on his lot, used from a GM auction in the US. All have US speedo's. I guess it's OK for the dealer to pick up the cheap rigs and sell them for higher Canadian prices.............

I must admit it doesn't sound like a square deal. I'm not knocking Canada here. Only been there once but I thought iw way cool!

redvett Senior Enthusiast

redvett

Posted
Posted
I am in Canada and really do think we are getting ripped off.

 

To go one step further, I just dropped by my local dealer and he has 3 units (07 Tahoe, 07 Burb, and 3/4) on his lot, used from a GM auction in the US. All have US speedo's. I guess it's OK for the dealer to pick up the cheap rigs and sell them for higher Canadian prices.............

 

Here in the USA the dealers have to change the clusters to MPH and have a sticker in the door jamb to certify the mileage for any sale.

I got to the GM auction every month here in Flint. You have to have a GM authorized pass to buy there.

dfs41 New Member

dfs41

Posted
Posted

I don't think the exchange rate had much to do with it lately. I live in Canada, and picked up an 07 Suburban in the US in February. The difference in MSRP was over $22,000. The federal and provincial taxes still need to be paid, but are paid on the lower purchase price - another savings. Factor in a 6% exchange (at the time), an airfare, and one night's stay in a hotel, and it is still more than worth the leg/paper work. The only other addition cost is for the registration of the imported vehicle - $204.

It worked out so that well, that my father just purchased his Colorado stateside as well, and saved close to 12K, with a current exchange rate of close to zero.

There has to be a lot more going on than just the higher advertising and warranty costs.

stillen Enthusiast

stillen

Posted
Posted

I can easily see this turning into a "we're better than you are" discussion.. Everywhere you go, something is either better than where you came from or worse where you could go. I'm no different, I have my owns complaints, yet I choose not to do anything about it, but I could. It's my fault, no one else to blame.... So I say, If you want a cheaper truck, because you're mad that trucks are cheaper in the states, then move here. If I wanted affordable health insurance I'd be living in Montreal, near the red light district.... Get over it, stop complaining, take actions that have immediate results, complaining to the "big wigs" that you can;t afford one of their trucks won't get you anywhere...

DanMan_S Enthusiast

DanMan_S

Posted
Posted
I am in Canada and really do think we are getting ripped off.

 

To go one step further, I just dropped by my local dealer and he has 3 units (07 Tahoe, 07 Burb, and 3/4) on his lot, used from a GM auction in the US. All have US speedo's. I guess it's OK for the dealer to pick up the cheap rigs and sell them for higher Canadian prices.............

 

Amen to that, I keep going to my Chevy dealership in Calgary to look at Z06's and they have Vettes that they've picked up in the states and are selling USED in the dealership for 100000 CAD. They didn't even replace the gauge clusters!

 

I don't believe this BS about Canadian vehicles being worth more from the factory, smaller market, etc. The vehicles all come off the same assembly lines and they just got away with selling them to Canadians at a different price because the majority of consumers didn't notice a difference until the dollar hit par.

 

Porsche has already dropped their Canadian prices and everyone I talked to at Chrysler dealerships has said a price drop is coming. Heck, even the used guys at the GM dealerships are iffy about buying vehicles right now because they are waiting for GM Canada to drop their prices and drag the entire used market down. It's only a matter of time before things change.

 

Until then, I'm going to keep shopping for a Z06 in the states, even if I have to make sure to go 6 months/12000 km without being able to make a warranty claim. GMCanada can kiss my ass.

larry arizona Enthusiast

larry arizona

Posted
Posted

It used to be the other way around for years. It is called grey market. Michigan dealers bought and sold Canadian vehicles for discount due to exchange rate. Not only on cars but Motorcycles and snowmobiles etc....

I guess the shoe in on the other foot now.

redvett Senior Enthusiast

redvett

Posted
Posted

Also remember that GM does not own the dealerships and cannot regulate the price. The dealerships are privately owned businesses. The free market regulated the price. Slow sales = larger discounts & high demand = higher prices.

Raymond Lowe Enthusiast

Raymond Lowe

Posted
  • Author
Posted

I agree that these are different markets and we should expect some variation. But what many U.S. readers are not aware is that big business including GM have been using the exchange rate excuse for decades to justify the higher cost of goods sold in Canada. We've had it drummed into our heads for years and all of a sudden that excuse is no longer valid. We're just saying, "What gives?".

 

Taxes (and our health care system) aren't the issue here. I quoted MSRP. That's before taxes and the $1300 "destination" charge are added. The auto pact allows for the duty-free movement of vehicles and parts in North America yet we pay much more for a Mexican built HHR. If Oshawa trucks were only built for Canadians, there wouldn't be this thread but the fact remains that at this point we are essentially subsidizing the U.S. market. Before somebody points out that the Canadian market is small, maybe 15% of the U.S. market, try the math. If GM makes maybe $6,000 profit on a loaded LTZ in the U.S. but can sell the same truck in Canada for $17,000 profit, then the Canadian market adds a huge amount to their bottom line, like around 30-40%.

 

Remember that we're talking about the manufacturer here who sets the prices, not the dealer. Dealers profit lines and the deals we're able to negotiate are pretty much in line with the U.S.. For example, I negotiated with 3 different dealers on a cash deal, factory ordered truck. That means no GM subsidized financing and no flooring costs for the dealer. The best I could do was $51,400 on a MSRP of $55,205 (GM dealer print-out). If you think the dealer is the one raking in a huge windfall, you'd be mistaken. I've worked at a dealer for 11 years and they make a good living but in this case, GM is taking the lions share.

stillen Enthusiast

stillen

Posted
Posted

Ok, I can agree to a point i guess, but here's another example....

 

I bought a new then 05 skidoo for $10,900 US dollars last year in Massachusetts. That same sled In yellowKnife was over $14,000 CAN. BRP, is a Canadian company.... You'd think they'd give their citizens a break...

SnowGoAK Enthusiast

SnowGoAK

Posted
Posted
Ok, I can agree to a point i guess, but here's another example....

 

I bought a new then 05 skidoo for $10,900 US dollars last year in Massachusetts. That same sled In yellowKnife was over $14,000 CAN. BRP, is a Canadian company.... You'd think they'd give their citizens a break...

 

$10,900 seems a bit high for a '05. The dealerships here have '06 REV 800 Summits for around $8,000. Though with the new XPs out the older REV have lost a lot of their value.

 

When the dollar was worth more, we had a lot of people who would drive down to Whitehorse to buy sleds.

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