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Canadians Buy U.S. Cars at Record Rate: Number Almost Tripled from November 2006

By Tony Van Alphen, Business Reporter, Toronto Star

The rush of Canadians importing cheaper new and used autos from the United States has turned into a stampede.

Canadians' purchases of autos in the U.S. almost tripled to a record 30,002 cars and trucks in November from the same period last year, statistics from Canada's Registrar of Imported Vehicles program showed yesterday.

Analysts say the strong Canadian dollar and thousands of dollars in more savings at dealers south of the border spurred the huge increase in sales.

"It's certainly escalating," said Carlos Gomes, senior economist and auto industry specialist at Scotiabank Group.

"It tells you that people were continuing to go to the U.S. for good deals rather than buy in Canada," Gomes added.

However Gomes said he expects the volume to ease off this month because of the quick decline of the dollar to just below parity with the U.S. greenback in recent days.

Statistics from the registrar, a program Ottawa set up in 1995, indicated the number of imports in November smashed the previous record of 24,873 in October.

The numbers show increasing levels almost every month this year as the dollar rose and consumers became more aware of significant savings on transaction prices south of the border despite red tape and other restrictions.

Until the late spring of last year, the Registrar of Imported Vehicles program had never recorded a month with more than 10,000 auto imports from the U.S.

The statistics also show used autos account for a majority of the imports but the percentage of new vehicles has climbed to 22 per cent of the total from 11 per cent during the last two years.

Analysts say the increase in imports was a factor in a 5 per cent decline in new auto sales by Canadian dealers during November.

The increasing number of imports this fall and soaring dollar prompted Canadian automakers to introduce the biggest package of incentives in their history last month.

Chrysler has already indicated it will sweeten its package of incentives even more to keep consumers buying in Canada.

Other automakers will likely follow with more incentives, analysts say.

Automakers in Canada have been reluctant to cut their suggested retail prices because of the potential negative impact on the prices of used vehicles and on residual values at the end of leases.

The registrar program, which is now operated by Livingston International Inc., a private customs broker, is now receiving more than 7,000 calls a day on how to properly import vehicles into Canada.