Just as TTAC's Samir Syed was getting himself all hot and bothered about the car price differential between new cars in Canada and the U.S., Toyota ran him a nice cold bath. The automaker is slashing its Canadian prices to reflect what Stephen Beatty, managing director of Toyota Canada, calls the 'new normal.' Driving.ca reports that ToMoCo CA's cutting the manufacturer's suggested retail price (msrp) on 16 Toyota and Lexus models by a range of $750 and $8,100. Some examples (all in Canadian dollars): a Yaris hatchback drops five per cent ($750) to $13,165; the RAV4 falls 6.8 per cent ($2,000) to $27,400; the Tacoma pickup truck drops 10 per cen ($2,290) to $20,470; and the Lexus IS sports car decreases 13 per cent ($4,650) to $31,900. Beatty denies that a two percent drop in Toyota sales spurred the move. "This isn't about weakness in the marketplace… There is a difference structurally today in the marketplace from where we were last year." Oh, do the math and the RAV4 is still more expensive in Canada than the U.S. I guess the new normal is the same old you-know-what, only less.
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You hit the nail on the head. Nice to see some movement..but it’s not parity.
Please note the effect sales volumes have on electronics. Should cars be any different? If Canadians want the same prices, they just need to buy 10X as many cars.
Digi-Key Part Number 296-1628-5-ND
Logic chip
QuantityUnit Price
1 – 0.56000
25 – 0.42000
100 – 0.31500
250 – 0.23240
500 – 0.19600
1,000 0.18620
5,000 0.17850
Manufacturers in Canada were in denial in Sept/Oct 2007 to then offering all sorts of rebates, incentives, deals not to go shop in the US which lasted till the end of 2007.
The concensus was that lowering MSRP’s was going to have a negative impact on residuals, with leasing being very popular in Canada.
January 2008 was close to a record month in Canadian sales and “sales management” on the part of manufacturers. The second best January in history with most manufacturers having an appreciable increase in sales, Honda had an over 60% increase, which surely did not go unnoticed by Toyota.
Toyota executes a brilliant strategy in lowering MSRP’s gaining a market advantage, and putting all the other manufacturers on notice.
Toyota can likely afford near-parity. Others, well some can, some can’t, but the first domino has fallen. It’s a stunner of a move that only they could have done first. Who’snext?
It’s a little bit of smoke and mirrors, the prices have decreased a little, but nothing major.
example: Sienna CE
Jan. 31 – $31,750 – $1500 incentive = $30,250
Feb. 1 – $29,400
Savings = $850 (3%)
However, there is still an $8,000 price difference between the US invoice price and Canadian MSRP (dealers aren’t gonna budge from MSRP now)
Lowering MSRP’s is great but at the end of the day, if someone can pay less for a competitive product with a higher MSRP with a lower net payment then they will opt for the lower payment. Lower MSRP also has nothing to do with actual retail prices unless there is a corresponding lowering of invoice costs. If invoice costs have remained static then all this has done is lower dealer margins to offset things like trade-in values and negotiating room.
But this is Toyota, they aren’t big on negotiating anyway.
Not even close to parity. Still, its a step in the right direction. Hopefully Honda will follow suit, maybe even try to “one-up”.
So far Chrysler seems to be the only company desperate fair enough to have almost identical to U.S. pricing, and even then, its only on new products (Patriot, Calibre etc)
Of course, their other products have rebates up the wazoo.
Toyota has been selective with their “price cuts.” A Prius has an MSRP of $29500 + $1240 freight in Canada, and even the Camry LE is $25900 + 1240 freight. Even though there is a $2500 cash rebate on the Camry, there is still a $2500 plus variance. When contacted about this, and the possibility of bringing in a US car, Toyota Canada had this response: “For your information, it is our understanding that Toyota dealerships in the U.S. are not authorized to sell Toyota motor vehicles to customers located outside the U.S. or to sell Toyota vehicles for re-sale or use outside the United States. The manufacturer’s warranty (regardless of whether it is a US Toyota vehicle or a Canadian Toyota vehicle) is honoured in continental USA and Canada.”
Back when the C$ was seriously tanked, low 60s US cents, it amazed me how cheaply the car manufacturers were selling the stuff up there in terms of US currency. Otherwise, their sales would have followed the currency. Down. From that perspective, they’re just getting even with what’s going on now.
Way off topic, I was just driving through a Toyota dealer’s lot today. Monday, overcast with light drizzle, no customer traffic visible. A poor lonely salesman came walking up to my vehicle so I stopped. After talking awhile, out of the blue he asked me if I wanted to drive a Tundra. We hadn’t even been talking about Tundras. “Hell yes”!. So I got to drive a 5.7L Tundra. Very nice indeed. I had made it plain I wasn’t buying anything, but he just wanted to have some fun. And maybe get warm.
mel23
I was commenting on the other thread but thought I would add my two cents here. I think that is a point that is often left out of the discussion. The cost and the price of the vehicles to canadians did not increase relative to there income. The strength of our dollar increased as the strength of the U.S dollar decreased.
The manufacturers set a price point for the market and I believe they are loathe to move it too quickly.
As I said on the other thread I think prices will and should come down. It is only matter of time.