[M3MARK@MAC]

I posted this in another thread, where it may not catch your attention so here it is as a thread starter. Buying or leasing a new BMW?

Here's an open letter to BMW Canada that my wife wrote after I had a most unsatisfactory conversation with the sales manager at the dealership. I would suggest that those who sit quietly and accept the current pricing are contributing to BMW's delusion that their customers are content to pay higher prices in Canada. As soon as I can figure out who to mail it to I will send hard copy to BMW. ( And yes, I DO know that US dealers are forbidden to sell to Canadians, but that doesn't factor into this opportunistic pricing. )


Dear Sirs:

As I write, my husband and I are waiting for delivery of our new 328 XIT. My husband ordered the car as a birthday gift to me. This will be our fourth BMW, and we've both enjoyed the driving experience and the level of service that comes with owning a quality vehicle. We're both very dismayed, however, at the prospect of paying 21% more for the new car, than we would have to pay if we took a 45 minute drive south to Washington state and purchased the identical vehicle in the US.

The sales manager at our dealership has made various excuses for the pricing difference, the most hilarious of which had to do with the US dollar's purchasing power of the Euro. If it wasn't such a funny excuse, it would have been insulting. He also suggested that his customers are so happy, that his sales are actually up this year. Well congratulations to him, but I'm sure when he looks at the numbers for the balance of this calendar year, it will be a very different story. There's a groundswell of dissatisfaction amongst participants on all the regular internet BMW sites. There are suggestions of online petitions, lobbying the Ontario law firm currently pursuing North American auto manufacturers to include BMW in the class action lawsuit over pricing, etc. It isn't pretty. And the sales manager at our dealership glibly suggests that his sales are up - essentially telling us that while BMW Canada is making money, it's okay to overcharge its loyal customers.

The fact is that BMW Canada cannot continue to ignore the parity of the Canadian dollar to its US counterpart. While I appreciate that a wholesale adjustment may have a ripple effect into the used market, the current pricing model simply cannot be supported. Canadian consumers, loyal to the brand, should not be taken for fools with unsupportable excuses, when clearly the same dollar should be able to buy the same car, whether the consumer is in Canada or the United States.

Please understand that we don't need to buy and drive a BMW, it's a choice that we have happily made for many years. The current disparity in pricing, however, is making us doubt our choice and question why we should remain loyal to your brand.

Your response will have a direct bearing on our decision take delivery of our newest vehicle, which is due to arrive in Vancouver next week. I look forward to hearing from you.

[604_e90325i]

any update?

[Bimmerista]

The most recent of manny a thread on the same topic. Some posters actually started getting answers - a will confirm that the official response is Blah blah we are not at this moment going to lower prices but rather up the content.

Given that Porsche lowered their prices, there is a good chance BMW will do the same.

[MOAB]

To the OP:

1. You indicate that you may not take delivery of your car when it arrives. Did you not sign a contract to purchase the car? Just curious, why do you think you can simply walk away?

2. The Cdn $ has been at parity for what, a month or so? Why don't people wait to see if parity is going to remain long term before going crazy. There really are many factors that go into the differences between prices in Canada and the U.S. Try using Google and inform yourself accordingly.

3. For all the people that BMW would appease by lowering prices immediately, don't forget all the existing customers they would piss off by crushing the used car market.

[Bimmerista]

Agreed. Not only that but 85% of BMW in my neck of the woods are leased, which means BMW itself would loose a bundle on the high residuals written into the current leases.

People forget that from the 80s until 2000, cars were more expensive in the US than here-and no one pushed up pricing here to make up for that.

However, neither BMW nor the other luxury makers can ignore the cross border grey market, which will only increase in importance if the current pricing differentials remain in effect.

[ssjLancer]

Originally Posted by MOAB

To the OP:

1. You indicate that you may not take delivery of your car when it arrives. Did you not sign a contract to purchase the car? Just curious, why do you think you can simply walk away?

2. The Cdn $ has been at parity for what, a month or so? Why don't people wait to see if parity is going to remain long term before going crazy. There really are many factors that go into the differences between prices in Canada and the U.S. Try using Google and inform yourself accordingly.

3. For all the people that BMW would appease by lowering prices immediately, don't forget all the existing customers they would piss off by crushing the used car market.

1.When I got my car I didnt sign anything binding until the car actually got here. In fact mid way through I actually told BMW I changed my mind and they were ok(though I changed my mind again)

2.True, but I guess Porsche kind of set the precedent by dropping their prices dramatically(albeit still not on par with the US) across their entire lineup.

3.There have been talks of *some companies offering some kind of rebate or price reduction to consumers who bought a car in the past 1-2 years.

[MOAB]

Originally Posted by ssjLancer

1.When I got my car I didnt sign anything binding until the car actually got here. In fact mid way through I actually told BMW I changed my mind and they were ok(though I changed my mind again)

2.True, but I guess Porsche kind of set the precedent by dropping their prices dramatically(albeit still not on par with the US) across their entire lineup.

3.There have been talks of *some companies offering some kind of rebate or price reduction to consumers who bought a car in the past 1-2 years.

The other thing to consider is that BMW continues to have record sales in Canada so if people are not actually walking away from buying these cars, then they have no business reason to adjust prices at this time. If people started boycotting BMW, they would have to react, however, I just don't see that happening. If the Cdn $ is at 1.45 by next year as many pundits are suggesting, then you will an adjustment in prices. But its too early for people to react now and no amount of bitching by consumers is going to change that. Welcome to the global economy.

[M3MARK@MAC]

my responses below:

To the OP:

1. You indicate that you may not take delivery of your car when it arrives. Did you not sign a contract to purchase the car? Just curious, why do you think you can simply walk away?

1.They are past the 90 day delivery clause on the deal that I signed back in June.
2. I spoke at length (politely, without malice) with the sales manager at the dealership, and he verified that unless he was forced to discount the car to sell it to another purchaser, my deposit would be refunded.


2. The Cdn $ has been at parity for what, a month or so? Why don't people wait to see if parity is going to remain long term before going crazy.
(who's going crazy? We're just talking here.)
There really are many factors that go into the differences between prices in Canada and the U.S. Try using Google and inform yourself accordingly.
My, aren't we superior and wise! I am concerned that the response from BMW Canada will come weeks or months after I have taken delivery on a quickly depreciated asset. It's a sticky situation, as anyone who currently leases will attest. (BTW:I wonder where facts and your opinion truly overlap. Parity dollar is the bellweather that has put this in the press, but the issue has been lurking for well over a year. I have run my own business for many years, and am faced with the same issues in my business world.)
FYI:again, just one reporters views...no more or less valid than this discussion.
http://www.reportonbusiness.com/serv...PStory/robNews

3. For all the people that BMW would appease by lowering prices immediately, don't forget all the existing customers they would piss off by crushing the used car market.
True, as acknowledged in point 2: so a gradual response to pricing pressures may be more sensible for BMW. I just don't feel like being the noble victim here. Do you? There is nothing wrong with asking the question and having a reasonable discussion with the powers that be at BMW Canada. Don't assume that the only acceptable response is equal pricing in both countries. There are added costs to doing business in Canada. I respect that. I live that!

Car manufacturers will have to respond in some way, at some point. Porsche has already taken steps...others will likely follow. Don't shoot the messenger... thanks for listening.

[RBP]

Originally Posted by MOAB

To the OP:

1. You indicate that you may not take delivery of your car when it arrives. Did you not sign a contract to purchase the car? Just curious, why do you think you can simply walk away?

2. The Cdn $ has been at parity for what, a month or so? Why don't people wait to see if parity is going to remain long term before going crazy. There really are many factors that go into the differences between prices in Canada and the U.S. Try using Google and inform yourself accordingly.

3. For all the people that BMW would appease by lowering prices immediately, don't forget all the existing customers they would piss off by crushing the used car market.

Whereas I agree that the Canadian dollar could just as easily drop back to $0.90 by early next year, I don't buy the used car market "crushing". The only participants that would be hurt significantly would be the people selling their used car and not replacing it with either a new car or a different used car. Most people who would lose on the selling of their used cars would make up more than that difference in the savings on the new vehicle. Residual values on leases would be hit, but it is BMW Finance that is taking that hit...and with the dollar gain offsetting the residual hit, and interest rates more than likely staying low (thereby not increasing their borrowing costs), they would make out just fine as well.

Just my $0.01967 CAD

[tirana]

Perhaps they'll throw in the car mats.... Seriously, it's unlikely that there will be significant pressure to decrease prices unless the dealers/BMW Canada's bottom line looks to be dragging. They price the cars at what the market will stand. I was surprised that there are so few changes between 07 and 08 pricing (including the costs of options) but I would think that a dealer is more likely to give a better percentage discount - esp. to a repeat buyer.

My BMW Assist subscription is up at the end of the month. I'll try to negotiate a discount (especially since its free for 4 years in the US) but am not holding out much hope. There again, I'm also prepared to walk away from it (since I only got it because I heavily use Bluetooth).

[picus]

The Canadian dollar may have only been at par for a month or less, but it's been well above .90c for over a year. Current auto prices are based on a 30 year old dollar. Yes, we're a smaller market and should expect to pay a small premium. 20-40%? No.

[MOAB]

Originally Posted by picus

The Canadian dollar may have only been at par for a month or less, but it's been well above .90c for over a year. Current auto prices are based on a 30 year old dollar. Yes, we're a smaller market and should expect to pay a small premium. 20-40%? No.

Maybe so, but from what I've read, it looks like we need to see a sustained strong dollar for 2 years before prices are adjusted, so even a $0.90 dollar for over a year isn't going to cut it.

[RBP]

If we were 10% more than the US I doubt anyone would care and very few would bother importing across the border to save some money.

However if you can save $10-$30K or more by importing, then they certainly will.

[MOAB]

Originally Posted by M3MARK@MAC

my responses below:

To the OP:

1. You indicate that you may not take delivery of your car when it arrives. Did you not sign a contract to purchase the car? Just curious, why do you think you can simply walk away?

1.They are past the 90 day delivery clause on the deal that I signed back in June.
2. I spoke at length (politely, without malice) with the sales manager at the dealership, and he verified that unless he was forced to discount the car to sell it to another purchaser, my deposit would be refunded.


2. The Cdn $ has been at parity for what, a month or so? Why don't people wait to see if parity is going to remain long term before going crazy.
(who's going crazy? We're just talking here.)
There really are many factors that go into the differences between prices in Canada and the U.S. Try using Google and inform yourself accordingly.
My, aren't we superior and wise! I am concerned that the response from BMW Canada will come weeks or months after I have taken delivery on a quickly depreciated asset. It's a sticky situation, as anyone who currently leases will attest. (BTW:I wonder where facts and your opinion truly overlap. Parity dollar is the bellweather that has put this in the press, but the issue has been lurking for well over a year. I have run my own business for many years, and am faced with the same issues in my business world.)
FYI:again, just one reporters views...no more or less valid than this discussion.
http://www.reportonbusiness.com/serv...PStory/robNews

3. For all the people that BMW would appease by lowering prices immediately, don't forget all the existing customers they would piss off by crushing the used car market.
True, as acknowledged in point 2: so a gradual response to pricing pressures may be more sensible for BMW. I just don't feel like being the noble victim here. Do you? There is nothing wrong with asking the question and having a reasonable discussion with the powers that be at BMW Canada. Don't assume that the only acceptable response is equal pricing in both countries. There are added costs to doing business in Canada. I respect that. I live that!

Car manufacturers will have to respond in some way, at some point. Porsche has already taken steps...others will likely follow. Don't shoot the messenger... thanks for listening.

Sorry if I am coming across as flippant. Not my intention.

[RBP]

Originally Posted by MOAB

Maybe so, but from what I've read, it looks like we need to see a sustained strong dollar for 2 years before prices are adjusted, so even a $0.90 dollar for over a year isn't going to cut it.

Though I doubt they will lower prices until they've tried everything else (denying US cars a Canadian warranty, huge retrofit requirements for US cars to be registered in Canada, finance/lease incentives etc.) I don't buy the 2 year argument. No company keeps a 2 year inventory. Inventory is completely rotated every few months at worst for the auto industry, and usually only a very short time due to just in time production and delivery.

[aspiring335]

As I noted in the other thread, the root cause of the matter is not BMW Canada gouging customers, but rather the absence of an open market, which in turn allows BMW Canada to maintain prices.

Unless BMW Canada sees buyers fleeing in droves then I predict they will not lower prices, and certainly not so there is parity with the equivalent CAD price of a US vehicle. And unless BMW USA ends the restriction on Canadian buyers then I seriously doubt that a truly significant number of Canadians will stop buying Canadian BMWs in protest.

The solution is a truly open market (i.e. one in which we can cross the border to buy new BMWs), not an arbitrary price adjustment by BMW Canada, as appealing as that may seem.

[flush01]

Originally Posted by aspiring335

As I noted in the other thread, the root cause of the matter is not BMW Canada gouging customers, but rather the absence of an open market, which in turn allows BMW Canada to maintain prices.

Unless BMW Canada sees buyers fleeing in droves then I predict they will not lower prices, and certainly not so there is parity with the equivalent CAD price of a US vehicle. And unless BMW USA ends the restriction on Canadian buyers then I seriously doubt that a truly significant number of Canadians will stop buying Canadian BMWs in protest.

The solution is a truly open market (i.e. one in which we can cross the border to buy new BMWs), not an arbitrary price adjustment by BMW Canada, as appealing as that may seem.

yap i complete agree... the only solution I see to this is BMW Canada HAVE to allow people to buy cars from States and honor all the warranty

[M3MARK@MAC]

Originally Posted by aspiring335

As I noted in the other thread, the root cause of the matter is not BMW Canada gouging customers, but rather the absence of an open market, which in turn allows BMW Canada to maintain prices.

Unless BMW Canada sees buyers fleeing in droves then I predict they will not lower prices, and certainly not so there is parity with the equivalent CAD price of a US vehicle. And unless BMW USA ends the restriction on Canadian buyers then I seriously doubt that a truly significant number of Canadians will stop buying Canadian BMWs in protest.

The solution is a truly open market (i.e. one in which we can cross the border to buy new BMWs), not an arbitrary price adjustment by BMW Canada, as appealing as that may seem.

Indeed... the promise of NAFTA never quite realized. (Not that Germany is part of that twisted little American enterprise in any case) However US car companies are part of NAFTA equation, and could ultimately cause market pressures to cause a reaction from the import brands.

I am somewhat impressed that Porsche has made an 8-10% concession! It says something, I think. That's really all I would expect, given the additional overhead that BMW cites as factors in their pricing equation.

The message I get from BMW at the moment is that their sales are up, profits are good, it is difficult to buy across the border so take it or leave it.
Bottom line for me... show us some reasonable response here BMW Canada!

[aspiring335]

Originally Posted by M3MARK@MAC

Indeed... the promise of NAFTA never quite realized. (Not that Germany is part of that twisted little American enterprise in any case) However US car companies are part of NAFTA equation, and could ultimately cause market pressures to cause a reaction from the import brands.

I am somewhat impressed that Porsche has made an 8-10% concession! It says something, I think. That's really all I would expect, given the additional overhead that BMW cites as factors in their pricing equation.

The message I get from BMW at the moment is that their sales are up, profits are good, it is difficult to buy across the border so take it or leave it.
Bottom line for me... show us some reasonable response here BMW Canada!

BMW North America LLC is a distinct (American) corporate entity. As such I don't think it is exempt in any way from the provisions of NAFTA, etc.. I'm not in any way an expert on trade law, but it seems like they could be forced to allow US dealers to sell to Canadians? Any lawyers out there care to comment?

[MOAB]

Originally Posted by aspiring335

BMW North America LLC is a distinct (American) corporate entity. As such I don't think it is exempt in any way from the provisions of NAFTA, etc.. I'm not in any way an expert on trade law, but it seems like they could be forced to allow US dealers to sell to Canadians? Any lawyers out there care to comment?

I'm a lawyer but not a trade lawyer. I'll ask one of my colleagues tomorrow.

[EdmBimmer]

Hmmm...

I think NAFTA only pertains to products made within the three countries (Rules of Origin). I could be wrong though.

And yes, Porsche did drop prices but 10%. Some figure it to them wanting more market share. I don't personally think it was due to a stronger Canadian dollar. VW and Audi don't look like they are to follow. Although VW does honour the warranty on US purchased cars.

I think BMW Canada should clear the warranty issue with US purchased cars. Then you can go ahead and find a demo/practically new e90 in the US and transfer it over. Granted, you'll lose the free maintenance but you'll have saved $$$.

[M3MARK@MAC]

Originally Posted by sc88

Hmmm...

I think NAFTA only pertains to products made within the three countries (Rules of Origin). I could be wrong though.

That's my understanding as well. I have experience importing electronics from the US, where Certificate of Origin determines the tariff schedule, but not one's ability to purcahse abroad and import, as long as one complies with the rules and tariffs.
However it would be interesting to get a trade lawyers read on the BMW's apparent ability to forbid US dealers from selling new cars to Canadian consumers. I don't recall ever hearing of a precedant in any other area of wholesale or retail sales...

Anyone?