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    Porsche to drop prices in Canada

    Thanks to the rise of the Canadian dollar:

    "Yesterday, Porsche Cars North America Inc., faced with its well-informed and well-heeled customer base, said it will "listen to the market" and cut its Canadian prices on 2008 models by 10 per cent, including improvements in equipment."

    Here's a link to the article:

    http://www.theglobeandmail.com/servlet/story/LAC.20070926.RPORSCHE26/TPStory/

    Glad I leased mine to guarantee the residual.

    Re: Porsche to drop prices in Canada

    Quote:
    JoeRockhead said:
    Thanks to the rise of the Canadian dollar:

    "Yesterday, Porsche Cars North America Inc., faced with its well-informed and well-heeled customer base, said it will "listen to the market" and cut its Canadian prices on 2008 models by 10 per cent, including improvements in equipment."

    Here's a link to the article:

    http://www.theglobeandmail.com/servlet/story/LAC.20070926.RPORSCHE26/TPStory/

    Glad I leased mine to guarantee the residual.



    That's because many Canadians were taking the strong Canadian dollar (why it's nicknamed the "loonie" is beyond me - if any Canadian Rennteamers can tell me, I'd certainly appreciate it), converting it to the U.S. dollar, and buying it cheaper in the U.S.

    I'm not surprised, as Canadians could have saved a load of money by purchasing their 911's "South of the Border." Canadian dealers likely complained to PCNA about their sales of Porsches being adversely affected, hence the correction in prices by PCNA.

    Another big question is how long will U.S. prices not increase significantly even though the U.S. dollar has fallen sharply?

    Jim

    Re: Porsche to drop prices in Canada

    it's called the loonie because the etching on the coin is of a loon (bird)

    Re: Porsche to drop prices in Canada

    Thanks. In the U.S., folks still haven't accepted a coin in place of our dollar bill.

    Jim

    Re: Porsche to drop prices in Canada

    Even with the drop drop announced by Porsche, it is still much cheaper to purchase in the US.


    The Canadian dollar has gone up relative to the US dollar, but has not increased nealy as much as against the other hard currencies of the world (sterling, euro, yen). The value of the Canadian dollar versus the green back is more related to the falling US dollar than the rising value of the canadian dollar. There is also a lot of speculation currently in the CDN$ which is pushing the value higher than it deserves.

    On high end cars, the difference between US and Canadian dealers is about 30%. This is creating huge problems for the canadian newtorks of BMW, Lexus(Toyota), Porsche, Mercedes, GM, Ford, Nissan and others.

    There is currently a class action lawsuit that is brewing, contending a conspiracy of price fixing by the car manufactures against the canadian consumer. It is hard to say whether it has merrit yet. But candadian conumers are getting very testy. Imports of US purchased cars is growing at an alarming rate. For now it is isoltated to those that purchase cars cash, leaving out the lease and finance segment of the market.

    But as a market watcher, the bigger short/medium term issue is how long exporters to the US will continue their stable price policy in the US car market as their margins slide with the depreciating US dollar? How long can the Japanese and German luxury manufacturers keep their US prices stable despite their margins dropping. A major change in car prices, and other imported products, to reflect the dropping US$ could induce an inflationary cylce through the entire US economy. As an active investor in US$ backed investments, this keep me up at night.


    As an owner of a Canadian purchased C2S, I like the idea of a small price correction, but I hope that a major correction does not happen. It would kill the residual value of my car and all of the other cars on the road. Not to mention really hurting the leasing companies that make or break their business model on the residual value of the cars.

    Re: Porsche to drop prices in Canada

    Quote:
    TheOldMan said:
    Even with the drop drop announced by Porsche, it is still much cheaper to purchase in the US.


    The Canadian dollar has gone up relative to the US dollar, but has not increased nealy as much as against the other hard currencies of the world (sterling, euro, yen). The value of the Canadian dollar versus the green back is more related to the falling US dollar than the rising value of the canadian dollar. There is also a lot of speculation currently in the CDN$ which is pushing the value higher than it deserves.

    On high end cars, the difference between US and Canadian dealers is about 30%. This is creating huge problems for the canadian newtorks of BMW, Lexus(Toyota), Porsche, Mercedes, GM, Ford, Nissan and others.

    There is currently a class action lawsuit that is brewing, contending a conspiracy of price fixing by the car manufactures against the canadian consumer. It is hard to say whether it has merrit yet. But candadian conumers are getting very testy. Imports of US purchased cars is growing at an alarming rate. For now it is isoltated to those that purchase cars cash, leaving out the lease and finance segment of the market.

    But as a market watcher, the bigger short/medium term issue is how long exporters to the US will continue their stable price policy in the US car market as their margins slide with the depreciating US dollar? How long can the Japanese and German luxury manufacturers keep their US prices stable despite their margins dropping. A major change in car prices, and other imported products, to reflect the dropping US$ could induce an inflationary cylce through the entire US economy. As an active investor in US$ backed investments, this keep me up at night.


    As an owner of a Canadian purchased C2S, I like the idea of a small price correction, but I hope that a major correction does not happen. It would kill the residual value of my car and all of the other cars on the road. Not to mention really hurting the leasing companies that make or break their business model on the residual value of the cars.



    As a student of markets, am always fascinated by these arbitrages; interesting observations, OldMan....

    Few aspects of US mkt w/which EU mfrs struggle....US buys prob 50-60% of global $100K+ (US MSRP-equivalent) cars; prob 70%+ of these $100K+ cars are leased in US (often w/mfr-subsidized leases, so mfrs take risk of absorbing all these used cars at loss in 2-3yrs)

    $150K+ car mkt in US will be facing onslaught of Dino in '08 (and F setting up Fiat-sponsored leasing arm in US)...some ?2-3K/yr Dinos into US; will likely depress pricing/leases of all $100K+ discretionary cars....

    US high-end car mkt has already become recessionary....e.g., AMG is already carrying several mths of inventory of new S63/65 and CL63, sitting at dealers across US, just as weather soon becoming less perf car-friendly in ex-CA locales....

    Most affluent car buyers in US have become accustomed to paying roughly $100K for any car and leasing $0 down for 2-3 yrs; and repeating cycle again at lease-end, w/minimal mtce costs/hassles during use of car.....would observe that today's S550 is some $3K cheaper than S500 launched in '92....assuming 2.5%/yr inflation over past 15yrs, S550 should base at some $130K today (not <$90K) ; suspect dollar has depreciated some ?50-60% vs Euro in past 3-4 yrs alone.....and consider what interest rates (and lease terms) were back in the Dark Ages of early 90s....and consider the tech advances of S-Class over past 15yrs (would be interesting to know, if just like the tech industry, today's more tech-intense cars are cheaper but faster/smarter/safer/better b/c mfg costs, R&D costs and financing costs for mfrs are also lower than in past )....

    Would also study profitability of various car lines and mfrs....vaguely recall reading that S-Class, despite being only 10% of total MB units sold, represents some 40% of operating profits for MB....perhaps mfrs will need to better focus on engineering better cars that will profitably sell in scaleable units.....dumb marketing campaigns may brag about "outselling" competitors in units...but I suspect shareholders, employees, suppliers, etc would rather see a mfr prosper by maximizing profits and profit growth w/well-engineered, reliable cars, not merely punching out shoddily-engineered, unreliable units w/giveaway cheap lease programs, only to incur signif warranty repair costs and lemon-law buybacks (and losses recognized upon lease termination and sale of used car) to depress profits.....

    Indeed, we're living through a remarkable era of cheap, well-engineered, increasingly tech-intense, low mtce, more rapidly tech and/or fashion-obsolescent cars....esp for consumers in the dominant US mkt....

     
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