Tue May 6, 7:26 AM ET USA Today
Whether it's a plain Ford or a rare Cadillac, cars and trucks sold in the USA by most automakers are priced higher than virtually identical
vehicles sold in Canada. Now automakers are punishing car dealers and U.S. customers who buy Canadian cars, even though it's legal to do so.
The number of Canadian vehicles brought into the USA by registered importers ballooned to 211,797 in 2002, up from 14,052 in 1996, 14 times as many, according to the National Highway Traffic Safety Administration (news - web sites), which tracks and regulates auto imports.
Those numbers may seem small when compared with the nearly 17 million
new cars and trucks sold in the USA last year. But at over 200,000 annually, Canadian imports represent the equivalent of two shifts of annual production at a typical auto plant.
The issue has grown increasingly contentious, with no end in sight. In the last year, automakers have attempted to crack down on sellers and buyers. In turn, the automakers have been sued on behalf of buyers. If the automakers can't stop the import numbers from growing, they face yet another erosion of profit, already dragged down by the high incentives that have propped up U.S. sales.
Automakers call the price differential ''pricing to the market.'' They say they price cars lower in Canada -- anywhere from 1% to 40% -- because wages and economic conditions are below those in the USA, and taxes are higher. It's what the market will bear, they say.