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Originally Posted by Cliffy1

If I were a Canadian dealer, paying Canadian dollars to buy Toyotas through my Canadian distribution system, I would be pretty concerned about this. I would know that because of United States monetary policy, my customers could drive South and get the same car I sell for a lot less. This has nothing to do with profit or business practices. It has everything to do with the value of the US dollar versus the Canadian dollar. As a Canadian dealer, there is only one place I can buy my cars and that's through Toyota and not some dealer down South.

That Canadian dealer signed a dealer agreement with Toyota. In exchange for the dealer paying a variety of fees and buying vehicles exclusively through the Candaian distributor, the dealer gets some assurances. They are assured that they will not have to compete against dealers in countries with rapidly devaluing money. They will not have to compete against dealers with non-Canadian specified vehicles. They will not have to compete against dealers who have an unfair advantage.

Do you know when this started? It was back in the 1990's when the US dollar was stronger than the Canadian. A small number of US dealers were using brokers to buy Siennas out of Canada. Canadian dealers were quite happy to sell their products at MSRP. Those few US dealers were glad to pay MSRP in Canadian dollars because that meant buying them at about 20% below invoice in the US. Even after paying broker fees and transportation costs, we were still into them light.

Toyota saw this happening. They put down bans on this practice. They tried at first to punish US dealers but there was only so much they could do. Then, they went after the Canadian dealers. Now that the roles are reversed, everybody is looking for a fair reaction out of Toyota.

Dealers are not huge corporate entities. Most are owned by families. They are just trying to survive in a capitalist system and just want fair treatment.

I agree that Canadian dealers should be concerned. They should be concerned because they too are victims of Toyota's 2-tiered pricing policy. And because of it Canadian dealers are denied the ability to compete in a free-trade environment. If I were a Canadian dealer I would be screaming my head off at Toyota. The extra profit from Canadian pricing doesn't go the dealer but to the manufacturer. That, IMO, is unacceptable. As you well know, it is Toyota that sets the MSRP.

Yes, I know about when the U.S. dollar was stronger a few years back and the Auto companies had a price difference due to the low exchange rate on the Canadian dollar. At the time I knew of a Canadian Ford dealer bringing in loaded F-250s, giving them to his friends to drive for six months and then taking them south of the border to sell. It was a winfall for Canadian dealers at the time.

However, at the present time the Canadian dollar is not stronger than the U.S. dollar, it is at par. And that's where the Canadian pricing should be; close to par. Even the Canadian Government has been critical of the auto manufacturers for not adjusting their Canadian pricing with the changing dollar. The Canadian government could have virtually closed the borders to U.S. imports with their new engine immobilizer law that came into effect last September. But what did they do? They changed the law so Canadians could continue shopping for new vehicles in the U.S. I guess that shows our government is on side with NAFTA.

I understand that the reluctance of the Auto Manufacturers to adjust the Canadian pricing is due to the leased vehicles presently out there that have a preset value when they are turned in. The value of the leases in Canada would drop if the prices of new vehicles were lowered. That could result in a huge write down for the auto industry. However, many businesses affected by the dollar parity have had to take write downs and in some cases like the lumber industry, close up shop.

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