Time for an update of the differences between US and Canadian process? We think so.
It’s now been four months since we first published our article into the pricing differences between motorcycles sold in the US and their equivalent models here in Canada.
With the steady rise of the Loonie to parity the differences became big news in Canada and threatened to hit the industry north of the border hard, as bargain hunters quickly realized that there was more than a buck to be made from heading south to get their next big purchase.
Our research at the time showed significant pricing differences between the two countries – topping out at close to 40% in some cases!
With four months gone by – giving the importers time to rework the equations – we thought that it might be a good time to revisit the issue and see who’s offering what … and who’s not. It also gave the importers some more time to set pricing for all their 2008s – many of which were still ‘TBA’ at the time of the last article.
Rebates, financing and OEM bucks
Okay, so just how do you jump into this issue and get a snapshot of what the importers have been doing to try and keep your dollar in Canada? Well, for this update we decided to cast a slightly bigger net, to include four European brands, three North American, and the four Japanese.
For each we took one new-for-2008 model and one pre-existing model, save for the Japanese where we added a third model so that we could get a litre sportbike, a large ‘standard’ (naked) bike and a large capacity cruiser into the mix for a better cross-comparison.
All pricing quoted is the Manufacturer’s Suggested Retail Pricing (MSRP), with the dollars compared as if at par, which we believe to be a good average to take right now. Oh, and we’ve included any cash rebates offered into the final pricing, but not any ‘accessory dollars’, financing or other hard-to-value incentives.
A) The Europeans
For this comparison we picked the new F800GS and the K1200S. BMW slashed their pricing for carry-over models significantly, illustrated by the K1200S which is down $3,500 from ’07, or 17.5%. Despite this, the K1200S is still up 17.7% over the U.S. pricing, with the new F800GS coming in at 16.4% over U.S. rates.
To sweeten the deal they’re also offering 5.95 per cent financing on their 2008 models until the end of March. Since the F800GS won’t be available until after March, that rate won’t apply, but a new deal may be in the works in the near future (so we’ve been told).
Sample summary: Avg. +17%. 5.95% financing available.
Ducati North America
The chosen bikes for this article are the new 848 and the 1098. Although Ducati North America has done some minor price cutting to most of its Canadian line (about 5% – 10%), for some reason the 1098 remains at ’07 pricing (making it 25% up on the U.S.) and the new 848 comes in 23.1% up on the U.S.
They have no special incentives either, and reckon that they’re not needed because the bikes are selling at today’s prices, or so we’re told. Still, since they import both the U.S. and Canadian bikes in the same batch, the difference would seem a tad hard to justify.
Sample summary: Avg. +24%. No purchasing incentives
The two bikes we looked at are the new 690 Enduro and the returning 990 Superduke. The Enduro comes in at just 10% over the U.S. price, while the Superduke does less favourably with a 17.4% hike, that’s even with a token reduction of $100 over the ’07 price.
Much like Ducati, KTM have offered some minor across-the-range price cuts (0% – 5%) over the ’07 MSRPs. However, there are no other incentives, but they do offer a choice of no interest and no payments for six months, or 6.99 per cent interest for two years.
Sample summary: Avg. +14%. Pay nothing for 6 months or 6.99% financing.
For our last Euro company we picked the new Rocket III Touring and the returning Sprint ST (which comes with bags and ABS as std in Canada). The new Rocket comes in at 17.6% over U.S. pricing with the Sprint ST at 18.6%. The Sprint also saw a $1000 price cut, with most of the Triumph range seeing some price cut up to around 8%.
Triumph Canada says it has narrowed the gap considerably, but for other incentives they recommend that you see your retailer, who may be able to offer a deal.
Sample summary: Avg. +18%. No (official) purchasing incentives.
B) The North Americans
Buell (Fred Deeley Imports)
Buell’s new for 2008 is the 1125R which comes in at a mere 7.7% over U.S., while the returning XB12S Lightning does a tad better at only 7.6%, thanks to a 9.3% price drop from 2007 (which applies to pretty much the rest of the Buell range too).
These cuts gets Canadian pricing closer to U.S. than any other company in our survey!
Sample summary: Avg. +8%. No purchasing incentives.
Harley-Davidson (Fred Deeley Imports)
The new Cross Bones and returning 883 Sportster are both within a very respectable 11% of the U.S. (10.9% and 10.7% respectively).
While we’re told that individual retailers may offer some discounts or other incentives, there is no official “factory” offer to sweeten the pot if you buy a Harley or a Buell.
Sample summary: Avg. +11%. No purchasing incentives.
Okay, so this isn’t quite a motorcycle and to date the company only has one model to look at (and a new-for-2008 one at that, so there’s no ’07 – ’08 comparo), but since the company is a Canadian one, we thought this would make a very interesting subject.
The Can-Am Spyder retails in Canada for $18,499.00, but in the U.S. it’s only $15,995.00 (model with SM5 transmission for comparability)! That’s a 13.5% difference, but since we’re talking about a Canadian company with a new model, we still can’t see the justification.
In an attempt to narrow that $2,500.00, the company is currently offering an additional year of warranty (3 in total) and three years of roadside assistance, total value of which is $1,058.00.
Sample summary: Avg. +13.5%. Additional year warranty and roadside assistance.
C) The Japanese
The big sportbike that we’re going to look at is the new-for-’08 CBR1000RR which has just had its pricing announced at $15,549.00 – up a considerable 34.1% over the U.S. This is a bit odd considering that Honda Canada waited until just last week to announce it, pegging it at the same price as Yamaha’s R1, but a whole grand more than Kawasaki’s new ZX10R.
The CBF1000 (Honda’s only standard bike in the lineup) isn’t available in the U.S. and is new for 2008, so we can’t compare that to much at all. However, the VTX1800F (their biggest cruiser) is a whopping 40.7% over the U.S., despite a $200 price drop from 2007.
Overall, Honda’s shown reluctance to drop 2007 prices, with the only discounting being with cruisers, typically seeing a couple of hundred off the sticker, save for the VTX1300 that saw a considerable drop of 16%.
As far as rebates go, Honda sold a lot of motorcycles with a program of heavy discounts on last year’s models, and the program will likely continue in a cut-down fashion with the 2008 bikes. There are no specific rebates or other deals offered yet on Honda motorcycles, but you can look for some form of (yet-to-be-announced) rebate that will “bring bikes to within about 15 per cent of the U.S. price at aggressive dealerships”, says Honda Canada.
Sample summary: Avg. +37%. 2008 model pricing incentives yet to be announced.
The ZX10R is new for 2008 and comes in with the most aggressive pricing of the Japanese 1 litre sportbikes at $14,599.00. Despite this, it’s still 26.4% up from U.S. pricing, which – according to Kawasaki – is a price that is ‘ready for the Canadian market’, so no rebates apply, but the other deals do (see below).
Their returning Z1000 is 22.6% up from U.S. pricing, with no pricing adjustment over 2007 and the big 1600 Nomad cruiser is a chunky 31.5% up, despite a $200 drop from 2007. However, Kawasaki have introduced a host of pricing incentives, with an instant cash rebate of $800.00 for the Z1000 and $1400.00 for the Nomad, bringing the final prices to around a 20% difference for both.
Overall, price reductions over 2007 have been slim, ranging from 0 to about 5%. Kawasaki instead has chosen a somewhat complicated bag of incentives which are only available until May 31, including rebates on most models, plus a choice of four options: 1.97 per cent financing for a year, no down payment with no interest and six months of no payments, $700 in Kawasaki accessories, or a $450 credit toward your insurance.
Sample summary (after cash rebates): Avg. +22%. Plus choice of 1.97% financing, no payments/interest (6 months), $700 Kawasaki accessories, $450 insurance credit.
The GSX-R1000 isn’t new for 2008, and doesn’t see any reduction in pricing either, giving it a 33% disadvantage over the U.S. New for ’08 is the B-King, which comes in at a relatively respectable 16.3% differential. Their big cruiser, the M109R, sees a huge price slashing from 2007 of $2,600.00 to bring it within 21.3%.
Across the range, Suzuki have resisted dropping prices on most models, save for the bigger cruisers that have seen close to 15% reductions.
Suzuki is also giving additional rebates packages to dealers, so you might be able to talk yourself into a better deal than MSRP, and all medium and large Suzuki motorcycles come with 500 Suzuki “dollars,” which can be redeemed for Suzuki merchandise. To get that 500, you need to arrange your own financing, or pay cash, and you need to buy your bike by June 30.
Sample summary: Avg. +24%. Plus $500 rebate (in Suzuki Dollars).
The R1 returns for 2008 and at the same 33.3% U.S. differential, though the $1,100.00 cash rebate effectively brings down that gap to 23.9%. Likewise, the FZ1 remains at 34.4%, but that drops to 22.6% after the $1,100.00 rebate. The new-for-2008 XV1900 Raider takes a similar course, with a $1,500.00 rebate bringing it down from 36.6% to a 25.5% pricing differential.
Across the board, Yamaha stick steadfast with their 2007 pricing except for their cruisers … Strangely, the Road and Stratoliners actually went up about 8%, while the Warrior and Roadstar remained static, and the V-Stars saw price cuts ranging from 0% (the 250) to 16% (the 1300).
Yamaha is offering a grab-bag of incentives until the end of March. You can get an instant rebate that varies depending on the model, or you can get an extended factory warranty and either Yamabucks (400 for the R1, FZ1 and Raider), financing down to 4.9 per cent, or a no-payment, no-interest deal for half a year.
Sample summary (after instant rebates): Avg. +24%. Or an Avg of 35% if you opt for the extended warranty and Yamabucks or low financing.
As we expected, there was no sign that anyone had taken the leap and cut the 2008 pricing that they had already published last November – the common option being to either stick with what they had already done (frozen or cut prices) or to sweeten the pot with “added value” options such as instant rebates, dollars to spend on their accessories or lower financing options.
Let’s take a quick look at how each company compares …
The Europeans seem to vary on their approach. BMW took to slashing prices to get to around 17% of the U.S. MSRPs, whereas the others went for more moderate cuts of less than 10%. In our sample, KTM did best with an average of 14% difference, BMW and Triumph are almost neck and neck at 17% and 18% respectively and lagging behind is Ducati with an inexplicable 24%.
The North American, or more specifically Harley and Buell have done the best of all when it comes to keeping Canadian prices close to U.S. ones with our sample giving Buell the best mark with an 8% difference and Harley not far behind at 11%. Sadly, Canada’s own Bombardier Recreational Products has a bigger 13.5% difference.
And finally, looking at the big four Japanese brands shows a surprisingly large gap appearing, with a sample range of 22% to 37% (after cash rebates). Interestingly, they’ve all resisted across the board price cuts (with the exception of their cruisers – and what does that tell us?), instead relying on incentive packages, with both Kawasaki and Yamaha getting good effect by offering cash rebates (albeit for a limited time).
Honda take the lead with the 37% difference, though this is a bit of bad luck for them with how our sample bikes turned out, as well as taking a big hit as they have yet to announce their promised incentive package. To keep in line with the competition, we’d expect this to include some cash rebates of $1000 to $2000.
Suzuki and Yamaha come in at a 24% difference (post any cash rebates), with Suzuki opting to hold fast on their flagship sportbike (like the others), introduce their new models competitively priced (B-King is +16%) and then slash prices on their big cruiser.
Yamaha opts to keep list prices pretty much static (save for some cuts to their V-Star line), instead bringing down the margin by offering hefty cash rebates (though we think they may want to follow Kawasaki’s lead and extend them from the end of March to the end of May).
And finally, Kawasaki come out tops (but still with a large 22% sample difference), thanks to an aggressive ’08 pricing (the ZX10R is the cheapest sportbike of the lot) and some hefty rebates elsewhere. Oh, and their other pricing incentives are pretty good too.
However, 22% to 37% still seems to be a sufficient gap to tempt people to shop south, the only other barrier that we can see being the need to arrange your own financing (with lower options being offered up by Kawasaki and Yamaha to boot).
The question is, how close to the U.S. pricing do the Canadians need to be in order to at least stem the flow of buyers heading south?
Although the importation process is relatively straightforward, we figured that around a +15% difference would be sufficient to keep most people this side of the border (and don’t forget financing and potential warranty issues – especially with the Japanese).
That would mean that most of the Europeans are safe (save for Ducati perhaps), and the North Americans too, but the Japanese must still be vulnerable – especially with their sportbike lines.
The bottom line is, are you planning on buying a new bike this year, and if so, how much of a premium are you willing to pay to keep your dollars this side of the border? The industry holds its collective breath.