Last week, the price of oil dropped to just US$28 a barrel. That’s right, for half the price of a decent sushi dinner, you could have yourself a bucket of crude that, last year, would’ve garnered four times as much. Our dollar hit a 13-year low, thousands of jobs were lost in Canadian oil, and some analysts warn it’s only going to get worse before it gets better.
Hard, but for Canada’s automotive industry, a low dollar isn’t necessarily a bad thing. American manufacturers like Ford, Fiat Chrysler and GM are now saving billions at their Canadian facilities for the exact same work. A lower Canadian dollar – in fact, anything below $0.80 – keeps our industry very competitive.
It’s in our wallets where the auto industry starts to hurt.
For the mass market, Canada is looking at its fourth-straight year of record auto sales if it can keep pace for 2016. But the buying market – Americans coming north of the border – is driving up demand…and more importantly, sticker prices.
For the high-end luxury and performance market, marques like Aston Martin, Bentley, Ferrari, McLaren, and Rolls-Royce are imported from overseas to their U.S. offices, where Canadian dealers purchase them in U.S. funds using ailing Canadian currency.
Including tariffs, freight and the exponentially larger sticker price that comes with such vehicles, that currency penalty is only compounded, leaving everyone wondering, what’s next?
For brands like Pagani (which sells in Euros), Singer Vehicle Design, or the limited edition McLaren 675LT Coupe/Spyder – both of which sell in U.S. dollars – buyers are already feeling the effect of the currency exchange.
Thankfully for shoppers of Aston Martin, Bentley, Ferrari, standard-edition McLarens and Rolls-Royce, these vehicles are sold in Canadian currency, and all have yet to feel the crunch the Canadian currency situation.
For many reasons, there’s no better time to buy than now.
The new Ferrari 488 GTB for example, sells for $292,000 Canadian, or $208,143 U.S. with the current exchange. That’s significantly lower than the $247,000 list price that Americans are seeing – and a $40,000 savings that surely won’t be here for long.
“Right now, it’s business as usual. But the sooner [a customer] buys, the better the price,” Pfaff National Brand Manager (McLaren, Pagani, Singer), Chris Green says. “That way, people can take advantage of that rate.”
“We just had a meeting about [the currency situation] last Monday.”
Other brands, such as Aston Martin, address vehicle pricing only once per vehicle model year.
“The prices are set based on projections and expectations before the release of each model year, but they aren’t revisited until the following year,” Aston Martin U.S. Communications Manager Matthew Clarke says.
That’s great news for the customer of today. But that’s not to say things won’t be changing soon.
Ferrari typically addresses its Canadian pricing twice a year – once at the release, and usually halfway through its model year. With new releases coming in August, that puts us square in the middle of that timeframe.
For Bentley and Rolls-Royce, who sell in much lower-volume, the urgency to address a price change hasn’t been felt thus far.
“The Canadian dollar has spent its last 20 years much closer to parity,” Steven Pavan of Grand Touring Automobiles in Toronto tells us. “These brands are not as reactive [to currency changes] because the impact within a single year is not as great.” “Pricing comes from the parent company, and it’s very difficult to make an instant change because of the number of factors involved.”
That said, even with the Canadian Rolls-Royce Ghost selling at 14 per cent higher than the American model, after the exchange its $331,940 Canadian price tag knocks it down to just $236,947. Compared to the $298,350 U.S. list price, it makes the Canadian Ghost look like a steal – and a price adjustment on the upcoming release seem all the more inevitable.
So, is the price right? Actually, it looks like there’s never been a better time to buy than now.
Images courtesy of their respective manufacturers.