Dollar Exchange Rate

[Colin24]

Well, as most Canucks are now aware, the Canadian dollar is not just at par, but (as I write this) above par at around 1.03 us. To most people of my age or younger this is unheard of. And you would think we would benefit from it, apparently not. Here is a sampling of vehicle prices comparing US to canadian prices

                            Cdn            US      Ex.Rate
                       ---------     ---------    ---------
Yamaha FJR 1300 A        $19,099       $13,899        0.73
BMW K1200 GT             $23,750       $18,600        0.78
Kawi Concours 14 ABS     $19,099       $13,799        0.72
Honda ST1300A            $19,699       $15,599        0.79

Mustang GT               $33,999       $25,840        0.76
Honda Civic Hybrid       $26,250       $22,600        0.86
Toyota Prius             $29,500       $20,950        0.71
Subaru WRX STI           $48,995       $33,495        0.68

I've shown some different bikes and even some cars in there just to show this is not a Yamaha specific problem.

This whole issue was driven home for me when I called the local bike shop to get some work done. The response: "Sorry, were going out of business. Service is closed, clearance sale on everything else over the next couple weeks". I wont mention the specific store because that isn't the issue.

But I did go down and talk to the guys at the shop. The short answer for the closing is the exchange rate. There is simply no way whatsover for them to compete. They could sell a bike at their cost, not making a penny and it would still cost a couple grand more than the same thing in the US. Apparently the shop has brought this up with Yamaha (as much as a year ago) but they have done nothing to deal with the situation. So it finally got the point were they just couldn't continue any longer. There were other reasons in the decision, but the fact that Yamaha (and other importers) were not adjust their prices is a major part of it.

And its not just the bikes. Same in the aftermarket. Tires up here are still 50-100 bucks more than in the US. Although this being a smaller item and the bike season is shutting down for the winter I am curious to see if the prices change considerably when the 2008 prices come out in the spring.

So whats the point of this post? Twofold; Venting and how to buy in the US.

As for venting; It is high time Yamaha (as well as all the importers in Canada) got their collective **** in gear and set the prices for their products appropriately. And the "excuse" that they have all this inventory sitting around that was purchased before the dollar was at par is a pile of crap. The dollar has been getting steadily stronger for the past few years. They had ample opportunity to adjust their prices as the dollar rose, but they chose not to. And its not just hurting the customers, but the dealers as well. My local dealer has no closed and left a distinct hole in this area. I now have a considerable distance to drive to find a yamaha dealer.

But hey if the importers in this country want to act that way, then fine. Next time I make a purchase I'll do it in the US and the Canadian company will see nothing.

So this leads to my second point. Has anybody yet purchased a (new or used) vehicle in the US in the past year and brought it into Canada. I think it would be interesting with people with first hand experience to post what hurdles (paperwork, vehicle changes, etc) that they had to do to bring the bike in.

- Colin

 

[Bustanut joker]

Self deleted due to political content. :angry:

:jester:

 

[bramfrank]

You can ask here, but you'll get a LOT more information by clicking the link below.

Be advised that there are some 450 PAGES in this thread, but you'll find that your thoughts aren't unique and almost 155,000 vehicles were imported into Canada last year as the US dollar has sunk into the mire - fueled by a huge accumulated debt, foreign exchange deficit, a VERY costly war and EXTREMELY greedy oil companies.

It isn't that the Canadian dollar is strong. The US dollar isn't worth toilet paper, thanks to the antics, and both the foreign and international trade policies of the present administration. The US will be owned by China shortly.

clik da link

 

[radman]

Oooooh, I see this going going gone! Well, parts of it anyway.

 

[Ignacio]

... fueled by a huge accumulated debt,....VERY costly war and EXTREMELY greedy oil companies...

Just a few of the alert terms that are political. Put the thread back on track or it's toast. :angry2:

 

[v65]

Do you have any idea what the exchange rate is doing to my Canadian beer runs?

 

[Colin24]

Just a few of the alert terms that are political. Put the thread back on track or it's toast. :angry2:

I'll second that.

My original posting was not in any way shape or form about the politcal issues on either side of the border that has created the environment for this situation to occur. It was about the greed of the businesses exploiting it and how to deal with it.

I am sure there are some people with useful experiences/info/ opinions. Would hate to not hear from them because the thread was ****-canned due to political content.

- Colin

 

[MCRIDER007]

My original posting was not in any way shape or form about the politcal issues on either side of the border that has created the environment for this situation to occur. It was about the greed of the businesses exploiting it and how to deal with it.

I think you are overlooking the rather large import and other taxes that Canada imposes on imports. How the US dollar compares to the Canadian dollar isn't as important as how the Canadian dollar compares to the Japanese yen since Canada must convert its dollars to yen to buy motorcycles from Japan just like the US does. However, US import taxes are very low compared to Canada. A Canadian dealer must pass those import and other taxes to the customer. I think if you were to check the cost of Japanese motorcycles in Europe where the Euro is much stronger than the US dollar you would find they also pay much more than we pay in the US.

 

[huron52]

I only buy in the US what I can't buy in Canadian.... And you should too Colin.

And some companies have already started to not stand behind waranty if it was bought in the US and brought back to Canada for use.

 

[huron52]

It was about the greed of the businesses exploiting it and how to deal with it.
Colin

Greed from businesses? Really? Open your own store front and see if you can do better!

BTW How did this get in Rides and Planning section?

 

[bikerskier]

A few weeks ago, I was in Port Angles, WA waiting for the ferry to Victoria when a couple rode up to catch the same ferry on a brand new Wing. They were residents of Victoria, who faced a $33,000 Wing in Victoria or Vancouver or a $22,000 identical bike in Port Angles. They said they very carefully researched the process over a month and discovered no duty due to NAFTA and an emission sticker requirment which would cost them about $300. The bikes came from the same plant and were identical except for the Can gov't sticker of some sort.The Canadain dollar had just hit par with the US on Friday so no exchange. So it was an apparent "no brainer". When I cleared Customs in Victoria, they were handing all their purchase docs to the official and expected no trouble. I regret not getting a contact number for follow up, to confirm that it did, in fact, go just as they planned.

 

[twowheelnut]

The social (and some export business) benefits you receive in Canada have to be funded in more ways than simply taxing citizens incomes. Business must also step up to the plate. You, as a Canadian citizen, have authorized these prices by the demands you make on your government to provide said benefits. This is why your FJR cost more to buy, insure and maintain. The disparity in pricing you show has nothing to do with US market vs. yours. In fact, off all the products you listed, only one is US based and produced, but even then, that Mustang is built in an AutoAlliance plant owned jointly by Ford and Mazda. This level of disparity exists between European markets and the US, as well.

I think your question of why is it this way should be directed to your local representatives to Parliament. Your question as to how to avoid paying these prices will, in turn, be answered by that questioning.

Author's note: I tried several different ways to answer Colin's question without involving some aspect of socio-political-economic reference, but alas, the nature of his very valid question simply cannot be discussed without these key factors being involved. Sorry, but I really tried and will not comment further.

Good luck, Colin.

 

[madmike2]

Nevermind, it would close the thread for sure.

Methinks TWN has hit the basis of the issue. All those "free" services must be funded. Likely Possibly "Coming Soon" to a neighboring country.

 

[El Gordo]

From a local forum:

How to Import a New Bike from the USA (Step by step) FAQ

My story importing a Bike from USA

BTW Bill seems to be a pretty together guy, who also does a lot of long distance riding.

It's not very difficult, but you need to be organized.

 

[Bearly Flying]

Not to be Political or anything, You can Thank a whole lot of LIBERAL GOVT'S for the Protectionist taxes shielding Ontario Based Manufacturing.

If they stepped up to the plate and got competitive with the rest of the world, Problem solved.

Then your FJR would be priced competitively with our Southern Brethren.

 

[bramfrank]

I think you are overlooking the rather large import and other taxes that Canada imposes on imports. How the US dollar compares to the Canadian dollar isn't as important as how the Canadian dollar compares to the Japanese yen since Canada must convert its dollars to yen to buy motorcycles from Japan just like the US does. However, US import taxes are very low compared to Canada. A Canadian dealer must pass those import and other taxes to the customer. I think if you were to check the cost of Japanese motorcycles in Europe where the Euro is much stronger than the US dollar you would find they also pay much more than we pay in the US.

6.5% duty on personal imports - none for the manufacturer's importer because we don't make motorcycles in Canada. If the US government charges duties then that is an argument in favour of lower prices in Canada.

And, there are no taxes, per se - the GST and Provincial taxes paid on import are immediately claimed back by Yamaha (and their dealers) in something called an 'input tax credit' (OK, at the end of the current month, but whose counting?). Corporate taxes and such are charged against PROFITS. Canadian salaries have traditionally been lower than their US counterparts on a lifestyle adjusted basis, so the worker has, to a very large degree been paying for the social programs - the employer may pay for Medicare, but he pays the employee less net dollars as a result. Further, the tax burden has of late been on the employee, with more than 50% of larger incomes going to direct deductions at source and the balance being eroded by high GST and provicial sales taxes (~15% on everything we buy), PLUS high gasoline, property, school and other taxes.

I admit that social programs in provinces like Quebec are 'off the wall', but that's a socio-political matter that can't be easily resolcved unless a government has the political will to make more than 50% of the eligible taxpayers actually pay something in to the system. It does not directly affect the gross profits of the corporate citizen.

However the Yen/C$ rate has changed, along with the US/C$ rate - though the US rate has dropped spectacularly in the past year:

On this date in 2004 one Canadian dollar would buy 87.09 Yen and .804 US dollars (96.45 comparative)

On this date in 2005 one Canadian dollar would buy 98.12 Yen and .849 US dollars (90.70 comparative)

On this date in 2006 one Canadian dollar would buy 105.5 Yen and .8886 US dollars (84.227 comparative)

On this date in 2007 one Canadian dollar would buy 109.47 Yen and 1.037 US dollars (94.72 comparative)

So essentially in 2004 and 2007 the US and Japanese currensies were not overly significantly different in terms of their relative values (because the Japanese economy is closely tied to that of the US and they have the same dependance on imports of finished products and resource materials), but the Canadian dollar has improved by more than 25% against the Yen and just less than 29% against the US dollar - AND THOSE CHANGES ARE NOT REFLECTED IN THE PRICES OF VEHICLES SOLD IN CANADA - so there goes the whole argument.

There are some differences between the US and Canadian bike models:

- Canadian don't get sidecase bags

- Americans don't get the immobiliser system

- Canadian keys don't bend

- Canadian bikes cannot select English Measure

About the only reason one MIGHT use that prices are higher in Canada than the US is that manufacturer infrastructures wuold have to support a market that is much smaller than that of the US and that those costs would need to be loaded on to fewer machines.

But this is easily resolved by having Yamaha administer Canada out of the US, the same way that a lot of countries do - something made very simple by the advant of NAFTA.

Or . . . . it could just be that they are simply ripping us off up here!!

Market pressures keep the price in the US lower, true. And the disparity is at the distributor level, rather than at retail, so the poor dealers (and the consumers) are the victims. But why not take advantage of the difference? More than 10,000 Canadians a month do it for their cars.

 

[burnergold2B]

Interesting and bizarre poli. sci forces @ work. I understand the duty/tax issues are much different there in Canada?

I live just south of Madison Wi where a pharmacist downtown was putting together customer purchases through a "sister" pharmacy, in Quebec I believe. The exact same brand name and generic pharmaceuticals were about %40 less through that Canadian pharmacy. The Feds here put the pressure on the State of WI., for some reason, and shut down the pharmacy's Canadian purchasing program. I believe the official statement pertained to "...safety and regulation." Complete B.S., IMHO...

Sorry, I don't mean to jack your thread on purchasing motor related items, but this whole scenario is perplexing to me. Particularly in that a semi from Mexico can run straight into Canada with less restrictions than I can, and dump a load, but my Grandmother cannot save %40 on her prescription drugs with a phone call? Weird.

 

[huron52]

I like how you all tip toe through those socio-political-economic waters... without trying to make any waves. :lol:

 

[MCRIDER007]

About the only reason one MIGHT use that prices are higher in Canada than the US is that manufacturer infrastructures wuold have to support a market that is much smaller than that of the US and that those costs would need to be loaded on to fewer machines.
But this is easily resolved by having Yamaha administer Canada out of the US, the same way that a lot of countries do - something made very simple by the advant of NAFTA.

Or . . . . it could just be that they are simply ripping us off up here!!

Market pressures keep the price in the US lower, true. And the disparity is at the distributor level, rather than at retail, so the poor dealers (and the consumers) are the victims. But why not take advantage of the difference? More than 10,000 Canadians a month do it for their cars.

You make some very convincing arguments that the price difference between and the US and Canada is much more than the difference in import taxes but I wonder how much difference there is in overall overhead costs for a dealer. If a dealers cost from mother Yamaha is much more than his US counterparts then there isn't much the dealer can about it and as you noted, a manufacturer building machines for a smaller market may have to load their overhead costs on fewer machines. Or, you may be getting ripped of by Yamaha who has been very slow to change their pricing with the change in the exchange rate and doesn't have much incentive to take profits out of their pockets as long as Canadians are willing to pay the higher prices. For some reason the US seems to have been somewhat immune to the effects of the devaluation of the US currency, at least as far as the pricing of vehicles from Japan. It appeared that we were a big enough market that the Japanese did not want to lose market share and were willing to reduce profits or pass costs to other markets. Whatever the reason, motorcycles are a bargain in the US compared to just about everywhere else in the world.

The question about the difference between US and Canadian pricing has been raised many times in other forums but never really answered -- and the Canadian dealers are probably the only ones that really know what their total costs and profit margins are.