Dec

With Drooping Dollar, Why Do American Cars Still Cost So Much Abroad?

Posted by admin Published in Auto Blog

In a press conference final September with Chevrolet’s general manager Ed Peper, Canadian journalists were
unrelenting. The Canadian dollar had reached a par with the American greenback, yet cars still cost thousands of dollars more than in the States. Why?

Peper explained that manufacturing costs were built into the car before current currency levels and that car makers have to set pricing based on future predictions of exchange rates. Yet four months later, a typical $20,000 American car costs, on average, $3,200 less in the States. A $30,000 car runs about $5,180 cheaper.

Chevrolet certainly isn’t alone in pocketing a little profit based on favorable exchange rates. Canadians are hopping mad

about it. A recent poll showed that 80 percent of Canadians want Ottawa to intervene. The falling dollar has been a lonely bright spot for the American auto industry considering it allows car makers to be more aggressive in pricing abroad. It’s additionally why European car makers are looking to the U.S. for future manufacturing plants. Currency winds eventually shift, however, and car makers everywhere should realize that consumer wrath may aftereffect in laws that pose an intractable pinch to their bottom lines.

Original post by Marty Jerome