Why are the attitudes of Canadians different from the US consumers
when choosing to purchase automobiles?

Toronto, Feb. 16, 2004
By A. Grewal

The Canadian economy of the 21st century is diversified. Although Canada sells goods and services around the world, more than 80% of exports and 70% of imports are with the United States. Canada is United States' most important trading partner, with an equivalent of over $1 billion a day in goods, services, and investments crossing the borders in each direction. Canada and the US also enjoy a highly interdependent energy relationship -trading oil, natural gas, and electricity.

As an affluent high-tech industrial society, Canada today closely resembles the US in its market-oriented economic system, pattern of production, and high living standards. The 1989 US-Canada Free Trade Agreement (FTA) and 1994 North American Free Trade Agreement (NAFTA) (which included Mexico) have touched off a dramatic increase in trade and economic integration with the US.
Most people assume that living in Canada or the US would have little difference, but auto companies and dealers are realizing that there is a difference among consumers living in either Canada or the US when choosing to buy cars, SUV's, and trucks.

There are a couple of reasons as to why consumers have different attitudes when buying new automobiles in Canada as opposed to the US. One being affordability, and the other geographic location. With first time buyers, affordability is a big issue in Canada where taxation is higher; the Canadian dollar is weaker and gasoline more expensive. Fuel economy takes on greater emphasis in immigrants.
Canadian consumers feel that affordable utility in the form of minivans, hatchbacks and station wagons, while American consumers are interested for SUV's and cross/utility vehicles. Canadians can wait months for a small car, while Americans patience is saved for luxury vehicles. American buyers have more passion for luxury cars.

For the past decade, automakers have treated both countries as one big market. Now automakers have started a new trend by selling their product in Canada-as lower priced vehicles, "for Canadian consumers only". Auto shows this week in Toronto, and last month in Montreal are showing vehicles designed for sale in Canada - and not the US.

• (GM) General Motors has started a pair of new entry-level imports from South Korea for Canada - the Pontiac Wave, derived from the Chevy Aveo hatchback (in Toronto 2003 show), and Chevrolet Optra5, a hatchback variant of the Canada-only Optra subcompact sedan.
  
  
• Canada Ford is trying to convince Detroit Ford to introduce a small Mini-fighter for Canadian consumers.
  Subaru sporty Impreza TS sedan and Jaguar will introduce European-style X-Type wagon (Canadian version) that will be affordable by Canadians.
  
  
• Nissan XTrail subcompact SUV that is selling very well in Japan, Europe, and other Asian markets, have introduced Canadian version. Smallest segment of cars represents 25% of the Canadian market, Nissan automaker are introducing for at least one more new subcompact.
  
  
• Toyota have started to get orders for the hatchback version of the Toyota Echo, and Honda has an Acura that is not available in the US.
  
  Studies that show the practical side to the Canadian psyche will force automakers to introduce affordable utility in the form of minivans, station wagons, and hatchbacks. Canadian consumers must be thought of a separate market from the North American market.