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Importing Canadian Vehicles to the U.S.

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Comments

  • sonjaabsonjaab Posts: 1,057
    If thats your reasoning on a UAW
    assembled costing so much more...
    Check out a NON union assembled
    Tundra or Camry compared to a UAW
    assembled Chevy truck or Buick
    Century...........Which vehicle
    gives you more for your money ?..geo
  • masspectormasspector Posts: 509
    "The Mexican workers see it as a job and food for their families. If the UAW has heartburn with that, they should compare their pay and benefits against the World prevailing wage rates and see if there is maybe a mismatch." A few American CEO's and executives could do the same thing.

    Maybe we as a global society should be more concerned about bringing the rest of the world's wage rates up to meet ours, instead of depressing american wages to that of developing countries.

    Would you rather live where you do in America in your lifestyle, or live in a third world country and work for $1.00/day and your children have to scavenge the trash dump for food everyday? I think most people in third world countries would pick the former. Thats one of the reasons that the US has run away illegal immigration.
  • bretfrazbretfraz Posts: 2,021
    Maybe we as a global society should be more concerned about bringing the rest of the world's wage rates up to meet ours, instead of depressing american wages to that of developing countries.

    I think you will have an *extremely* difficult time convincing Americans they should sacrifice their standard of living to improve the lifestyles of others.

    Imposing American values and culture onto others is the height of global arrogance. And people still wonder why 9/11 happened :rolls eyes:
  • masspectormasspector Posts: 509
    What in my statement implies that americans have to sacrifice to improve conditions in other countries?

    I am not trying to impose American values or culture on anyone. OTH, if we are so snooty as a country to the rest of the world, let's just stop all foreign aid, hand outs and military protection, and not allow any immigration or student visas, legal or illegal. Then we would be the selfish uncaring Americans. I am tired of our country playing the global cop and bank and then being slapped in the face about it. I do not find it surprising that the most developed economies have a real democratic form a govt. If you think that living in third world countries under dictatorships is preferable to living in a free democratic society, I guess you are free to have that opinion.

    BTW, I do not have the numbers to back it up, but I would be willing to bet that there are a lot more people trying to emmigrate to the US or western Europe than into SE Asia, Africa, South America, or the Middle East.
  • prayerforprayerfor Posts: 161
    You don't emigrate to, you emigrate from a particular country or region. Emigrate = leave.

    Now back to your regularly-scheduled TownHall sociopolitical debate...
  • masspectormasspector Posts: 509
    for the grammar lesson prayerfor. Have I been out of school that long? LOL

    And bret (And people still wonder why 9/11 happened :rolls eyes: )

    I forgot to say above that no matter how much you may hate another country or its people, there is no excuse (read this again, NO EXCUSE) for killing thousands of innocent civilians as happened on 9/11. But then again cowards don't usually play by the rules now do they?
  • Hi everyone. This discussion is beginning to stray a little too far from its intended subject matter, Gray Market vehicles. Please continue to discuss the importation of vehicles from Canada and the laws or manufacturers' decisions that affect it and cease the non-automotive talk. Thank you.

    Car_man
    Host
    Smart Shoppers / FWI Message Boards
  • masspectormasspector Posts: 509
    sorry for the distraction, I think it all started when I brought up NAFTA and free trade. That is with Canada, so I guess it is kinda close.
  • masspectormasspector Posts: 509
    When you say that warranties are not being honored are you saying that the parent company (ie Honda,Japan) is doing that or the distributor (ie Honda, USA)? Thanks
  • tincup47tincup47 Posts: 1,508
    Honda USA is in charge of setting up, administrating, and honoring Warranties for Honda vehicles in the US. Honda of Japan has no involvement in this, and makes no contribution to paying for them. The warranty expense comes out of Honda USA's budget, and is funded by the profit on the sales revenues to their market's dealerships. On vehicles sold in other markets they make no revenues to pay for this expense. In small numbers this is not a problem, but with wholesale importation of gray market vehicles this is a major issue with their profitability and has led to their not honoring warranties on these vehicles.
  • masspectormasspector Posts: 509
    So you are basically saying that Honda,Japan is selling a vehicle to Honda,USA and saying that if it tears up the day after it is off the truck it is Honda,USA's responsibility and Honda,Japan doesn't give Honda,USA any type of warranty at all? Doesn't sound like very good "Japanese" quality to me if they do not warrant their product at all.

    Is there that big a difference for there to be a Honda,USA and a Honda,Canada? Couldn't there be a Honda, North America distributor and this problem would be solved?
  • bretfrazbretfraz Posts: 2,021
    Warranties involve legal protection for consumers and mfr's and cannot directly be equated to product quality. Even the junkiest products have a warranty - doesn't mean the company making the product is any good.

    When thinking about warranties, you have to separate legal issues from product issues in your mind. Tieing the two together only makes for confusion.

    Same kind of reasoning applies to "North American" distributorships. They won't work. The laws that protect American consumers and American businesses do not apply in Canada or any other country. The distributorships may be very similar in operation but legally have to be completely separate.
  • masspectormasspector Posts: 509
    Some very good points

    There are many businesses that operate out of a North American distributorship model. I was just on www.epson.com and on the home page you choose North America if you want to go to US or Canadian help. I think a lot of electronics companies operate this way also.

    I am by no means a lawyer or know the ins and outs of the legal issues, but wasn't that what NAFTA was suppose to do: create one big FREE TRADE zone? So companies and consumers could trade freely without restrictions or tariffs? It appears "legally" that you cannot be stopped from buying a vehicle in Canada. So the distributors are circumventing the intent of NAFTA by saying, sure you can buy it, but if it breaks, we are not going to cover the warranty. Has this issue come up whith other products, like televisions or sereos? I wonder what Sony or JVC do about this.

    The FDA has finely had to acknowledge and allow that pharmacuetical companies were providing the same exact drugs to canadians and other countries for cheaper and that americans can buy them online in canada or elsewhere for way less than they can in the US.

    Landru has said that Ford fines its canadian dealerships that knowingly sell to americans. Who levies the fines? Ford, Canada or the top Ford company? If it is the top company than that goes against what tincup has ben saying about the distributors paying for warranties. It would imply that a company level above the distributor companies is involved in setting warranty and fine policy for all of the distributorships.
  • landru2landru2 Posts: 638
    Ford of Canada levies the fines you are talking about. As a Canadian dealership, we do not deal directly with Ford Motor Company.
  • capitanocapitano Posts: 509
    the price advantage in buying a car in Canada. I alwys thought the prices would have been the same since I always thought that the standard of living and incomes were comparable. If anything I would have expected prices to be a little higher due to taxes like on fuel.

    The mess in europe is interesting to me and more understandable since there are marked differences in the economies. The manufacturers are insisting on charging Germans more than say the Spaniards or Italians simply because they can. They have paid fines and continue telling dealers in these "discount" countries not to sell to customers from the "premium" countries. At some point the fines may negate any revenue gained from the higher pricing in some areas.
  • robr2robr2 BostonPosts: 8,863
    The intent of NAFTA was to create a large free trading zone in order to compete with the EU. It was targeted at manufacturers, distributors, and retailers in order to provide an incentive to keep production in North America and to open markets to North American manufacturers. It was to initially reduce then eliminate taxes. It also provided for the reduction of paperwork in order for product to cross borders. It's ultimate intent was to create jobs in North America. It was not intended to create level pricing throughout North America. Until the economies of the US, Canada, and Mexico are merged under common laws and currency, you will continue to see this disparity in pricing in many products.

    The EU has those common laws and currency and hence have a true issue with the mfrs charging different prices in different countries.

    Further, although Epson may have a click for North America for their help section, that may be a function of language commonality. Even with this "North America" selection, you can pretty much presume that there is an Epson US and Epson Canada that report individually to Epson in Japan. Different countries have different laws regarding presence/taxes that usually create the above.
  • capitanocapitano Posts: 509
    Earlier the comment was made that importers look to Canada for hard to find colors and or options.

    How are cars allocated to Canada?

    Are there special colors that the manufacturers consider appealing to Canadians but not to Americans?

    Do they sell more manual transmissions in Canada than in the states?
  • masspectormasspector Posts: 509
    Combining all of the above information does not make any sense to me. Let me try to explain with a little scenario. Since Landru has provided some of the information, I will use Ford in my example. This is just an example and does not imply any exact information about the way Ford Motor Company runs its business.

    The way I see it there are 5 principle players involved in this gray market and warranty issue.

    A) Ford Motor Company (the big cheese, the original manufacturer of the vehicle)
    B) Ford USA (they distribute Ford’s cars to dealerships in the US. They pay for and provide warranty service for Ford vehicles in the US according to tincup).
    C) Ford Canada (they distribute Ford’s cars to dealerships in Canada. They pay for and provide warranty service for Ford vehicles in Canada according to tincup).
    D) The Canadian dealership (they buy cars from Ford Canada and provide direct warranty service for these vehicles, in Canada).
    E) The US consumer (they want to buy a vehicle in Canada because of the lower cost).

    I will also make the following assumptions (which make sense to me):

    A) The ultimate goal of A, B, C, D above is to sell cars. This is how they all make their money.
    B) The most cost effective warranty (to a company) is the one where the purchaser never has to have any warranty work done. In other words, the consumer buys the product, and never has to return the product for replacement or service during the warranty period. In effect the company has provided a full term warranty, but has not had to spend any money out of its pocket to replace or service the product.

    Now things start to get fuzzy to me.

    1) US consumer goes to Canada to buy a Ford car cheaper. Landru’s dealership wanting to sell cars to make money sells the car to the US consumer (this is assuming no fine would be levied on the dealership).
    2) US consumer takes the car to the US and only drives it in the US. Any and all warranty work would be provided by US dealerships and paid for by Ford USA, according to tincup.
    3) Ford Canada and Landru’s dealership get to sell a car and make money on it, but never have to provide or pay warranty service on that car. The most cost effective warranty, as noted above.
    4) But wait a minute. Landru has stated that if his dealership did this they would be fined by Ford Canada. Why would Ford Canada fine a dealer for selling a car that they would profit from and returns zero warranty cost to Ford Canada?
    5) I can see where Ford USA would not want to provide the warranty in the US for a product that they did not get to make a profit on and they have to spend money providing warranty service. Ford USA in this case could say we will not provide warranty service for cars not bought from Ford USA dealers.

    According to what tincup has stated the above three companies are separate independent entities. I would also assume that since Ford Canada and Ford USA are two separate independent companies that they would have no contractual obligations to each other as they serve two different markets. There is no compelling logical reason for Ford Canada to fine the Ford dealer for selling the car to a US consumer, unless they are getting some kind of pressure from Ford Motor Company such as their allocation will be cut or stopped if they do not fine their dealers for selling to US consumers. But this would conflict with tincup’s and landru’s statement that Ford Motor Company has nothing to do with the warranty or fine policy of the two independent distributorships.

    This is why I am confused. I can understand Ford USA saying that they will not honor Canadian car warranties, but assuming that the fining issue is also involved somehow with Canadian dealers not selling cars to US consumers (and a $100,000 fine sounds like a pretty big incentive not to) I do not understand why Ford Canada would do this without some level of involvement from Ford Motor Company.
  • landru2landru2 Posts: 638
    Mass, maybe you can add these to your theories.:^)

    How much did Ford of Canada spend to market the Thunderbird in Canada? Would this be seen as a good investment if there are no cars for Canadians to purchase?

    What about market share? If all of Ford's F-350's go to the U.S. does Ford of Canada just say "oh well" while Canadians all buy Dodge trucks?
  • masspectormasspector Posts: 509
    I think I see what you are saying about the supply of vehicles for canadians to purchase. That would be a negative for canadian buyers. But isn't the goal of your dealership and Ford Canada for that matter to sell as many cars as it can? If customers are paying you MSRP for thunderbirds or f-350's, why would you care if they are US buyers are canadian buyers, as long as they are flying out the showroom? Is there some benevolent purpose to sell only to canadian buyers?
  • tincup47tincup47 Posts: 1,508
    You have to remember that these policies came about due to the wholesale importation of vehicles, not the due to the individual sales to private buyers. Unfortunately, the greed of these importers results in closing of the loophole for everyone. You do not necessarily have a right to travel wherever you want to go to save money and also have the same protections offered to people who obtained the vehicle or product through official channels. The manufacturer and/or the official distributor have the right to protect their and their dealer partners investments and profits as long as they abide by the law.
  • KCRamKCRam Mt. Arlington NJPosts: 3,516
    You're making your comments on the assumption that there is an unlimited supply of vehicles heading for dealers. Assembly plants can only build so many vehicles over the course of a year. To add to what landru said, if he sells all his F350s to US buyers, he can't simply call Ford Canada and ask for an allocation increase because he sold his stock over the border Ford Canada has a pretty good idea of how many vehicles they will sell, and overstock is the big no-no in the auto industry.

    kcram
    Host
    Smart Shopper and FWI Message Boards
  • masspectormasspector Posts: 509
    tin cup--"The manufacturer and/or the official distributor have the right to protect their and their dealer partners investments and profits as long as they abide by the law" It was just sounding like the parent manufacturing companies were not involved in this issue, only the distributor companies. I am sure that Ford Motor Company and Honda, Japan, etc are very involved in these decisions.

    kcram--I see what all of you are saying about Canadian buyers, in theory. If all of the canadian supply is sold to US then no supply for canadians. But is there a law that canadian dealerships can only sell to canadians? I would not think that there is. And I would not think that canadian dealerships are so benevolent that their only concern is the supply of vehicles for canadian customers. Their concern is selling the cars they have for the most profit. I still do not see where the dealership would care if the buyer is american or canadian as long as they pay MSRP for the vehicle.

    I would be willing to bet that if you walked into a US dealership and told the owner that you had a sure fire way to sell most all the inventory he can get his hands on at MSRP, but that he had to sell to canadian buyers and none of his inventory would be available to local buyers, he would say where do I sign up. Isn't this why this is an issue at all? If only one canadian dealership was selling like 10 cars a year to US customers, we would never have heard of this. Alot of canadian dealers were selling to americans or importers to the american market, they did not care what was left over for their canadian buyers, they were making money selling to the US.

    Right now supply does not seem to be a big issue, at least in the US, not sure about canada. If supply were so low, why all of the rebates and 0% finance offers? I would think a company would want to expand and produce and sell more. It doesn't make sense to produce only a set predetermined amount of inventory. If there is an increased demand, build more plants, produce more jobs. I know I am oversimplifying this, but this makes sense to me on the macro side of the issue.

    Oh yes, our good friend "just in time inventory". The reason that retail stores are always out of stock on most items that they carry and advertise on sale. Of course Honda has this down to a science, produce a vehicle everybody wants, but only produce about half of the anticipated demand. Works great for them. They have at least three current vehicles with waiting lists and that sell for MSRP or more.
  • Let's say Ford USA is planning to sell 1 million cars and trucks per year and earmark a budget for that number, but due to the influx of Canadian Ford vehicles, they have to pay for warranty repairs for 1.2 million Ford products, for example. Who do they go to for the extra warranty repair bills? Ford of Canada?
  • landru2landru2 Posts: 638
    I thought it was made clear before that the export policies in discussion are being set by the manufacturers, not the dealers.

    Of course an individual dealer would like to sell to whoever, that is why manufacturers are stepping in - so that the cumulative effects of many dealer's behaviour doesn't have negative effects on an entire market.

    Sort of like how you as a consumer would like to save money on your individual purpose even if the effect of many consumers doing this may be detrimental to a market as a whole.
  • capitanocapitano Posts: 509
    Somewhere in this thread or the Edmunds article there was mention of the used car guys from the US looking for specific color and feature combinations that are hard to find here in the States.

    Why would it be that these were easier to locate in Canada?

    Also on the supply side thing: I can't see a stampede of US buyers cleaning out Canadian dealers leaving the Canadians nothing to choose from. If a dealer sells more units this year, won't he get a bigger allocation next year?

    On the other hand, I could see a TMV shift to the Canadian buyers' detriment since if there are enough Americans fully willing to pay Canadian MSRP, then the dealers won't be as likely to deal.

    Reminds me of a friend who tried to make a deal on a 4runner in Alaska. Offered a cash price well below the ADM sticker price. Dealer told him to walk. Perplexed, he asked the dealer why he didn't want to deal since he always heard that dealers liked to get cash in full upfront. The dealer said that they sold enough 4runners to cover the overhead for the dealership and that any other car was just gravy. Pay the sticker or you don't get the car.

    Then the Canadians would really start to hate the US. "you take all the good cars, drive up prices on the others and you stole all our comedians. We hate you. We hate you. We hate you."
  • KCRamKCRam Mt. Arlington NJPosts: 3,516
    And I would not think that canadian dealerships are so benevolent that their only concern is the supply of vehicles for canadian customers. Their concern is selling the cars they have for the most profit. I still do not see where the dealership would care if the buyer is american or canadian as long as they pay MSRP for the vehicle.

    The dealership's problem is, that customer never comes back for parts, service, trade-ins. A good dealer wants to make more than the sale, they want you back for reasonably priced, properly executed service later on. THAT is where the dealer makes their money - on the long-term relationship.

    Let's turn this around. Let's make the US dollar worth less against the Canadian, but leave everything else equal. Canadian buyers will be here in droves with their pick of the litter for what cars and trucks they want because there are more models and combinations available in the US. Wouldn't it bother you that the best vehicles are constantly snapped up by Canadians because they're saving thousands over what the vehicle would cost them at home - AND - the manufacturers don't have the production capacity to replenish those units that leave the country?

    This is what is happening now. Jim in Winnipeg sees a truck on the lot that he could really use. It's a little pricey for him, so he wants to negotiate it down a bit. Tony from North Dakota sees the same truck, and based on the exchange rate, full Canadian sticker is still thousands less than what he could negotiate in the US. So he goes over the border, pays full Canadian for it, and goes home. Where does that leave Jim? Now he has no truck and the dealer is less likely to get a similar unit anytime soon than the US dealer, simply because the overall market is smaller in Canada.

    There's only a finite amount of vehicles to go around. If the supply is constantly under siege by exporters due to the exchange rate, what's left for you as the domestic consumer?

    kcram
    Host
    Smart Shopper and FWI Message Boards
  • landru2landru2 Posts: 638
    About 2 months ago, I read that 70% of all T-birds sold in Canada had gone to the U.S. That combined with the relatively limited production effectively means that even if Canadian buyers wanted they probably couldn't get one. Now, how do you think the used T-bird market in Canada will be affected? There will be basically no such thing as a used 2002 T-bird market in Canada. And obviously, the prices of the few available will be inflated much higher than normal.
  • sonjaabsonjaab Posts: 1,057
    Local ford dealer has 3 T-birds in stock
    at MSRP...Syr. NY area.........
    There is a yellow one up here in Alex. Bay
    NY around..Have only seen 2 Merc. Mauraders
    also........geo
  • bretfrazbretfraz Posts: 2,021
    KC's post #138 is a good one, but I said most of the same stuff in post #16. Looks like we keep going round and round in this thread.

    Sounds like this topic has been talked to death. Again. Which I remarked about in post #97.
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