As the turbocharged Canadian dollar races toward parity with its U.S. counterpart, Porsche Cars Canada Ltd. is cutting prices.
Canadians ready to fork out between $50,000 and $100,000 for Porsche privileges will find prices lower than they were in 2007, when the loonie began its last run at parity, but still higher than what Americans pay.
The price of the base Cayenne sport utility vehicle, which is the most popular line Porsche sells in Canada, will fall 2 per cent to $54,200 under the auto maker's "Canadian Currency Credit" program.
That compares with $45,500 (U.S.) south of the border, but $60,100 (Canadian) in the 2007 model year.
The base model of the Porsche Boxster now costs $55,600 in Canada, down from $59,600 when the 2010 model year car first came out. That compares with $47,600 (U.S.) for Americans.
Several Porsche models in Canada have more standard equipment than comparable U.S. vehicles, Porsche Canada spokesman Laurance Yap said, including such features as heated seats, auto-dimming mirrors and rain-sensing wipers on some models.
The price gap also covers high transportation costs in Canada and the 6.1 per cent duty auto makers pay on cars imported into Canada from outside North America.
"What we hear from our customers and dealers is that there doesn't necessarily need to be a 1:1 relationship on price, but that the prices should be reasonably close, as with any other consumer product," Mr. Yap said.
But the Porsche move highlights an area of potential danger arising again for auto makers that were burned when the dollar hit parity last decade and they were slow to react.
U.S. purchases of vehicles by Canadians skyrocketed to record levels, although even those who compile the data were unable to determine how many of those vehicles were new and how many were used.
Some car companies fought back by denying warranty coverage to Canadians who bought vehicles south of the border, leading to a class-action lawsuit against several companies that is still winding its way through the judicial process.
The price gap on vehicles narrowed after the dollar reached parity, said Bank of Montreal deputy chief economist Doug Porter, who did a study on the pricing of consumer goods after the dollar hit parity and re-examined the issue last summer.
The issue of prices for cars, books, clothing and other goods is "likely to be front and centre again," Mr. Porter said yesterday.
A quick check of some car prices revealed the situation has changed somewhat since 2008. The Ford F-series pickup, for example, which is the best-selling vehicle in Canada, carries a base price of $20,499 (Canadian) after what Ford Motor Co. of Canada Ltd. describes as "price adjustments." The manufacturers suggested retail price in the United States is $21,820 (U.S.).
The Honda Civic, the best-selling passenger car in Canada, costs $17,190 (Canadian) for the DX version of the sedan with automatic transmission. Americans pay $16,405 (U.S.).Report Typo/Error