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Toyota Canada Access Pricing

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Comments

  • grandtotalgrandtotal Posts: 1,207
    I agree with what you have written. What it boils down to is this; is the Toyota product in any given segment worth a (roughly) 5% premium over say the equivalent Honda product? For me the answer is yes, but should that premium become, say, 20% then the answer would be less certain. It's quite simply supply and demand at work and although I don't like to pay more for a product than I have to I accept Toyota's motives and if I were a Toyota shareholder I would applaud them.
  • dbgindydbgindy Posts: 351
    Great post right on the money.

    grand- sums it up very well!
  • Your post is excellently worded and very truthful. It is an open market and we are all free to walk away from the access price.
  • If you need salve for 'the psychological impact of settling with second or third best', think depreciation.

    As nicely worded as it is, there's a logical flaw in cdnhighwayman's argument. It's a 'competitive market' argument in favor of less competition.

    Sienna's and Oddy's sell pretty close to sticker even without price fixing. What happens when you start thinking Camry vs. Accord, 'Rolla vs. Civic, etc?
  • grandtotalgrandtotal Posts: 1,207
    I use an Excel spreadsheet to evaluate the total cost of ownership of the vehicle that I buy. It takes into account all costs that I can anticipate and reflects the way that I use a car. It showed that from a cost point of view that of all the cars I was considering the Corolla was the most cost-effective. I just dusted it off again and plugged current numbers into it to determine how much I could pay for a Corolla before it became more costly, over it's projected lifetime in my hands, than my second choice vehicle. The answer was that I could afford to pay $300 below MSRP before it would become more costly to operate than my second choice. This figure is about $200 less than Toyota's Access price. Therefore if I paid Toyota's Access price the cost to me over my second choice vehicle would be about $40 per year or less than 1% of the total annual cost - not worth worrying about. This does not even take into account the fact that the Corolla was my first choice because it meets my needs best, I would surely be prepared to pay a premium for that.
  • Thanks. That's the kind of info I was thinking about.
    I just pulled up TCO's on a 'Rolla CE vs. a Civic EX under the free price system here in the states. Even with the 'Rolla selling $1K+ under sticker, it's about $150 per year more costly. Add in Access pricing, it oughta come out over $300/year more costly.
    Lots of variables, though.

    It's true that most/all Toyotas are selling within $200 of sticker under Access pricing? Yeow! For me, not much of Toyota fan by taste in the 1st place, that would keep me off the Toyota lots altogether.
  • asawasaw Posts: 54
    I think it's great there are brokers we can go to, instead of just sticking with Access pricing.

    As for why Larry won't divulge his final price, your guess is as good as mine. Maybe personal reasons I guess? I'll find out when I call the broker(s), won't I.

    cdnhighwayman - I guess we all agree that Toyota makes good products, which is why they can get away with this Access scheme, and still keep making a profit.

    Now (I know I'm being insistent), does Toyota dare to roll this Access pricing in the US? I think not. Perhaps American consumers are not as tolerant as Canadian consumers. I still think it's an illegal scheme, no matter what anyone says.

    Who knows? Maybe when the time comes, the Sienna might not look as attractive anymore (especially when the new Ody arrives). We are all in the market to get the best price possible when purchasing something. If not, we'll get pissed (like myself with this Access scheme), or we'll buy other manufacturers.
  • I am also not happy with this program and I can completely understand where you are coming from about wanting to get the best price possible. But hat's off to Toyota Canada with this brilliant marketing scheme to maintain high profit margins. It appears that the program is not hurting them in provinces where it has been implemented, and so I don't see any end in sight. The government watchdog has apparently concluded the program is legal, subject to the modifications requested, and if you want a Toyota product bad enough in Access Toyota provinces, you have to agree to purchase by their rules, unless of course you decide to buy in Ontario, where for now they are operating under the old system.

    Maybe as you suggest, Honda's retooling of the Odyssey will challenge Toyota for minivan supremacy, giving us an even better alternative, purchased under a negotiated pricing system.
  • the focus on the Sienna? It's the one 'Yoda, apparently, Access priced close to a free market price.
    TMV here is sticker. The Access price is a bargain in comparison.
    The rip off is on 'Rolla's, Camry's, etc., where the Access price is hundreds higher than a market set price.
  • landru2landru2 Posts: 638
    Of course you assume the market in Canada is exactly the same as in the U.S. What with currency exchanges and different pricing strategies, Edmunds U.S. TMV isn't directly comparable to the Canadian market.

    Why would Toyota sell any Corollas if they were priced too high versus Civics, Focus', Proteges, etc.? Toyota is selling tons of Corollas and Camrys. Obviously, the market feels they are worth the price.
  • That's the puzzle, to me.

    So, how about some real data?
  • You're talking like Canada is a different country or something! That's just crazy talk.
  • grandtotalgrandtotal Posts: 1,207
    For a Corolla CE in it's most popular configuration MSRP is $18420, Access price in British Columbia (BC) is $18396, in Quebec (QC) it is $18378. For a Sienna CE FWD 7 Passenger MSRP is $30000, Access price in BC is $29892, in QC it is $29794.
  • These are $CAD? And a typical Canadian Corolla CE is what, a 130 hp auto with ABS, AC, CD, mats?
    If that's the case, Canadian sticker is already approx at US invoice; and Access price is about invoice - $50 -- in $USD.
    The Sienna CE FWD 7 with no options invoices in the US at $28K CAD, stickers at $31.1K CAD, and TMV's at $31.1K CAD (converted from $USD).
    That's very interesting. It looks like MSRP's are lower in Canada, which I expected but not to the degree that they are, and Access prices are already well under US TMV.

    So, another question - What's the data on the Canadian equivalent to a US Civic LX sedan with auto (115 hp, AC, no ABS, CD)?

    And, another question - Is it Ontario that is the one province without Access pricing?

    And a final question - To what do you attribute the spread between 'Yoda MSRP's in Canada and the US? The US distributer system, maybe?
  • grandtotalgrandtotal Posts: 1,207
    Honda
    Toyota

    The typical Corolla I was referring to has A/C, Auto, Keyless entry/power door locks and yes, mats. It does not have ABS, even as an option. You can order ABS as part of an option package on the Corolla S and it comes as standard on the Corolla LE.

    A Honda Civic LX Auto costs C$20500 and only comes with ABS.

    The only provinces that I know of with Access pricing are British Columbia, Alberta, Manitoba and parts of Quebec. As far as I know the others do not yet have Access pricing.

    Canadians have less disposable income and taxation is generally higher here than in the US on auto sales. These factors make it necessary for manufacturers to offer cars at lower prices in Canada than in the US.
  • very much.

    I checked the links and used a currency exchange rate converter. Converted to a monetary standard, it seems that Canadian sticker is awfully close to US TMV in the case of Honda; and Toyota Access pricing is approx at US invoice.

    This is very interesting to me.
    1) No wonder Access Pricing has been accepted so well!
    2) Edmunds TMV seems to represent value pretty well.
    3) There's less marketing hooey in the Canadian market place. (?)

    All of this leads me to another question. Does the Canadian system provide for 'holdback' like the US system does?
  • grandtotalgrandtotal Posts: 1,207
    I'd say there is more marketing "hooey" in Canada. We do not have the equivalent of TMV, we do not have access to invoice prices (at least not for free). The Canadian market does have holdback though the rates may differ from the US.
    I would not say that the Access pricing system has been accepted well, just that it is unavoidable in certain parts of the country.
  • What's your take on the relationship between the actual cost of production, distribution, etc. and MSRP in the Canadian market? MSRP is considerably lower there once the exchange rate is accounted for.
  • landru2landru2 Posts: 638
    A few months old but suggests that Toyota sales aren't hurting in Canada.

    http://www.newswire.ca/releases/July2003/02/c9206.html
  • "1) No wonder Access Pricing has been accepted so well!"

    I don't know if I would go so far as saying that. Unfortunately you are using an American mindset to analyze this. You have to use a Canadian mindset. Remember that before Access pricing that Canadians could negotiate hundreds or thousands off of MSRP(Canadian). So if MSRP(Canadian) is close to invoice(US), Canadians before were saving thousands below US invoice prices. Acess pricing may look like a good deal to an american say on a Sienna, but to a canadian it is thousands more than the same deal they could have gotten on a sienna before access pricing was started.

    This is why a lot of US buyers were going to Canada to buy cars. Even hot sellers at MSRP in Canada were like paying invoice in the US, and regular buys were thousands less than in the US. But that opens up a whole nother can of worms....See related topic on gray market imports.
  • Well, I'm sure I don't have a Canadian's outlook on this; but . . . .
    to echo Landru, if the cars are selling at Access price, something's going on right.

    I did some poking around, and the impression that Canadian MSRP is universally lower than US just isn't so. CAD$ MSRP on my car (a Honda), for example, is about $100 higher when converted to USD$, which I think reflects exchange rate fluctuation.

    So what's going on?
    I don't know for sure. Comparably equiped Yoda's, however, seem to be Access priced at or below US TMV in constant dollars.
    It's possible that 'Yoda Canada is doing a very un-car-biz-like thing - setting no-haggle prices very close to fair market value and eliminating a lot of sales hooey. Sorta looks that way to me.

    BTW, I checked out Saturn and Scion, the two no-haggle sales process cars in the US. Scion retail is approx invoice + 5%, where Saturn retail is approx invoice + 8%.
    Could it be that 'Yoda Japan is trying to leave some of the stupid North American price marketing behind?

    It's all very interesting to me. As a Canadian buyer, I'd be suspicious of Access pricing; BUT
    it just could be the beginning of something very good - cars list priced at the real cost of production + a reasonable profit margin.
  • leknlekn Posts: 78
    rivertown wrote:
    " It's possible that 'Yoda Canada is doing a very un-car-biz-like thing - setting no-haggle prices very close to fair market value and eliminating a lot of sales hooey. Sorta looks that way to me."

    Unfortunately, that's not true. Otherwise, how can you explain that the "fair market value" is thousand(s) less in Ontario than the Access price? The MSRP/invoice price has not changed. So the main effect of the Access price is the fat dealer margins.
  • If, in fact, 'the "fair market value" is thousand(s) less in Ontario than the Access price', I'd have to agree with you. Is there any hard data that the average price in Ontario is thousand(s) less than the Access price?
  • leknlekn Posts: 78
    No on paper hard data, just my friends' and my own experience (and reports by other users in forums) in negotiating the price of 04 Sienna with various dealers in Toronto, Ontario. 4-5% off MSRP is quite typical without hard negotiations; this compared with the Access pricing's pathetic C$100 to C$200 dollars off MSRP(as of today).
  • I can't say for sure, given the standard equpiment variance, but it looks to me like your Access price is very close to US TMV. Since there's a lot of new model hype, both are close to MSRP (US) and, thus, a good negotiator should be able to get a discount when negotiation is possible (non-Access price).
    Give the closeness to TMV, it's hard to say Access price is out of line with 'true market'.
    When I looked at Carolla numbers, the relationship to TMV seemed even better under Access; and MSRP was lower than in the US, close to US invoice if I remember right.
    I suspect 'fat dealer margins' is an over-simplification.
    The hot new model thing with the Sienna is an issue, too. Wanna run the numbers on a Tacoma?
  • please read the related thread about gray market imports. This other thread gives alot of background info and discusses alot of the issues that are now cropping up in this thread.

    traditionally canadian msrp is pretty close to US invoice prices. car makers just price their product lower in canada. they say it is because of all the taxes they pay and a lower amount of take home pay, etc. with other makes and with toyota before access pricing the canadian buyer could and does negotiate just like they do here in the US. So most buyers can get hundreds or thousands (CDN) less than MSRP(CDN). This is just like in the US. if the car is a hot seller, it is harder to negotiate off msrp, if it is a dog, the price quickly plummets. So fair market value in canada is far lower than tmv or invoice in the US.

    By saying that access pricing appears to be fair market value because it is close to US TMV or invoice is comparing apples and oranges. Canadians traditionally pay less than their american counterparts for the exact same vehicle, after conversion to a std currency.

    A better comparison is to see what toyotas sold for in Canada ,average, before access pricing and what they sell for now with access pricing. I bet that data would be very hard to find and I am also pretty willing to bet that the access price is higher than the old price. So I have to go with lekn here.

    No one has yet given a good explanation of why toyota went to access pricing except for the "hooey" off of their website. Until canadians stop buying toyotas in significant numbers, then access pricing will stay. Personally I would exclude toyota based on this one fact, even if they had the best car in the world. I did this for a while in the US based on toyotas overly high prices in the past and poor dealer attitude. Their are plenty of other good alternatives.
  • I really oughta read that thread, looks like.

    The only Canadian non-'Yoda I've checked was for the model I own, a Honda Si. MSRP was the same as US, CAD$ converted to USD$. So, I have been having trouble getting the gripe.

    If there is this kind of price spread Access-nonAccess, that would put me off Toyota, too. I'm already put off pretty much by the distributer mark-up and option package hooey US 'Yoda buyers face.

    I do understand there's a difference 'tween the two markets, having lived near the border as a teen and then again in my mid-20's. What I found then was that consumer goods indeed had cheaper list prices in Canada - with a corresponding drop in finish detail and/or manufacturing complexity. The old 'you get what you pay for' thing, with the Canadian market suiting my taste better by emphasizing durability, quality materials, and price over finish glitz.

    The market forces you and Grand mention (taxes and income) do affect price from the demand side. There's a limit, though, on price elasticity; and with cars, the cost of production and distribution presents a huge limit on downside movement. Getting good data seems to be very tough, which provides a great medium for hooey cultivation - by folks on all sides of the argument.
    So, all in all I've been unconviced that Access pricing represents a hijacking of the market, that in spite of my overweening skepticism for car dealers. I do have a profound respect for market theory, applied with intellectual honesty, however; and what I'd like to see are some more real life numbers with comparisons between comparable cars. So far, what I've seen is comparable cars selling for approximately the same prices in both markets with Toyota MSRP and discounts being jacked up in the US.

    The gray market thread is in which forum?
  • grandtotalgrandtotal Posts: 1,207
    There is no point in comparing the US market with the Canadian market in this case. A more valid comparison is the Ontario and other non-Access pricing Canadian markets (probably 3-5% below MSRP on average) and Access pricing markets ($100-$300 below MSRP).
  • asawasaw Posts: 54
    makes more sense if you narrow it down to dealers who implement Access pricing and those who don't under the same economic circumstances (income level, taxation level, currency, etc).

    So if a customer can buy a vehicle at $X dollars in Quebec (Access) while another across the border in Ontario (non-Access) can buy the same exact model for $X - 1000 dollars, this is clearly a "fat dealer margin" at work here.

    What I would like to see is for Toyota to have both Access and non-Access dealers in each province, so consumers can choose which to deal with. Here in British Columbia, all the dealers are Access, and there's no way they are willing to negotiate (spoken to 3 dealers). One of the sales person even told me that if they do, unfavorable circumstances might befall them, like "OK, you can go work for Honda now, after you are done this deal." Which I think is ridiculous.

    As for different prices in Canada compared to the States, well the prices in Canada for cars have always been cheaper. Don't ask me why, but I would have to think that on average Canadians make less than Americans (even before you factor in the exchange). So a Toyota sold under Access which is same price as US TMV doesn't mean a whole lot to Canadians who are used to buying prices equivalent to US invoice.

    I guess the only way Access dealers can negotiate is their finance and lease rate. I most recently saw an ad for 1.9% financing on Siennas. Just wait till the '05 Odyssey comes out next year.
  • kcram "Gray Area" Sep 4, 2002 6:02pm

    It has over 200 posts, but some good reading.

    If you search for "gray" you will see two other threads with some posts that the hosts made for news articles relating to this area. Hope this helps some.
This discussion has been closed.