Topic: EVO and STI CDN Pricing

[Wolfe]

Um, the financial whiz kids and currency traders seem to be waking up to the fact that the US is stumbling face first into a recession, taking the demand for our oil and metals along with it. Say buh bye to parity

Oil is hovering near triple digits (it actually was pushed up to $100 very briefly) in spite of the US slowdown. 

It hasn't started to bite yet. Patience grasshopper.

Oil prices are being driven by greater-than-ever global demand: there's not enough oil being produced to go around, thanks in large part to China and India's massive growth.  If Americans don't buy it, someone else will. 

That's the conventional wisdom, see my sig for my opinion about the conventional wisdom. (Bonus points if you know who coined the term conventional wisdom. Don't use the Google, that's cheating.)

I disagree, while strong demand has been part of the story behind the large rise in the price of oil over the last few years, I'd argue that the slowing of growth of supply (despite record investment) is the main driver of current prices.

The US is still the biggest consumer of oil. US oil consumption tends to decline during recessions.

Gold has been shattering records lately, too.

In nominal terms, yes. In real value terms it hasn't even gotten halfway back to what it sold for in 1980. I was born in 1980 and in my lifetime there hasn't been a worse performing asset class than gold/precious metals.



The EVO is a hell of a car and so is the STI and both of them are now cheaper than they would have been 5 years ago.

[JSCC]

Wrong way round!  The people lining up to get EVOs will be the die-hards who will pay anything to get one in Canada.  Once they've all paid, then you drop the price...  Apple did exactly that with the iPhone.  They sold it at $599 for the first month or so, and sold tonnes to people who had lined up to get it first.  Then they slashed the price by $200, and in doing so lured in a bunch more customers who may not have bought otherwise.

Not sure if that's what Mitsu wants or is planning, but it's a brilliant (if a bit unscrupulous) move.

That was a very good selling strategy, even if Apple had to give out $100 gift certificates afterwards, to those who bought at the +$200 price.
The $100 gift certificates had to be used at Apple stores only? If so, even smarter move.

[The Mighty Duck]

In nominal terms, yes. In real value terms it hasn't even gotten halfway back to what it sold for in 1980. I was born in 1980 and in my lifetime there hasn't been a worse performing asset class than gold/precious metals.

True.  But the explosion of gold prices in the early 80s is an anomaly.  Gold has been climbing since 2000.  Now, if history is a guide, it will begin to fall steeply again in time, but at the moment's it's a good asset to have.

[Snowman]

Um, the financial whiz kids and currency traders seem to be waking up to the fact that the US is stumbling face first into a recession, taking the demand for our oil and metals along with it. Say buh bye to parity

Oil is hovering near triple digits (it actually was pushed up to $100 very briefly) in spite of the US slowdown. 

It hasn't started to bite yet. Patience grasshopper.

Oil prices are being driven by greater-than-ever global demand: there's not enough oil being produced to go around, thanks in large part to China and India's massive growth.  If Americans don't buy it, someone else will. 

That's the conventional wisdom, see my sig for my opinion about the conventional wisdom. (Bonus points if you know who coined the term conventional wisdom. Don't use the Google, that's cheating.)

I disagree, while strong demand has been part of the story behind the large rise in the price of oil over the last few years, I'd argue that the slowing of growth of supply (despite record investment) is the main driver of current prices.

The US is still the biggest consumer of oil. US oil consumption tends to decline during recessions.

Gold has been shattering records lately, too.

In nominal terms, yes. In real value terms it hasn't even gotten halfway back to what it sold for in 1980. I was born in 1980 and in my lifetime there hasn't been a worse performing asset class than gold/precious metals.



The EVO is a hell of a car and so is the STI and both of them are now cheaper than they would have been 5 years ago.

I do financial evaluations for mining companies  . Now is a good time to buy shares in base mining companies as prices have dropped because of the panic over the situation in the US. In a few years prices will not be quoted in USD as they retreat from being the top world economy 

[ghost]

Not sure if that's what Mitsu wants or is planning, but it's a brilliant (if a bit unscrupulous) move.

Not sure that's what's going on, but let's assume for the sake of argument it is.  If the EVO was cheaper from the beginning, dealers would just gouge the buyer.  This way, at least Mitsubishi gets to profit from the initial sales surge, instead of just letting dealers pocket huge mark-ups.

Canadian dealers are not allowed to tack markups over the MSRP unlike in US.

[Cord]

Not sure if that's what Mitsu wants or is planning, but it's a brilliant (if a bit unscrupulous) move.

Not sure that's what's going on, but let's assume for the sake of argument it is.  If the EVO was cheaper from the beginning, dealers would just gouge the buyer.  This way, at least Mitsubishi gets to profit from the initial sales surge, instead of just letting dealers pocket huge mark-ups.

Canadian dealers are not allowed to tack markups over the MSRP unlike in US.

Do you mean Mitsubishi and Subaru dealers aren't allowed to? Because it does happen with other brands.

[Snowman]

My Subaru dealer said he would let me have one for $43k without any effort on my part and they have not arrived at his dealership yet.

[johngenx]

Subaru City in Edmonton has an 08 STi.  No test drives...   

[safristi]

 "MYSubaru Dealer.............. ...given Mining a PASS eh !!!

[TopGun]

So do you think they'll have trouble selling these?

Looking at the US pricing, they're not selling one to me!

[robarakira]

Everyone thought the EVO would undercut the STi because while the STi went for just over $30k USD, Subaru Canada was exploiting it for $50k CAD.

All I can say is Mitsu Canada will likely never get the inventory to be a high volume player, so they might as well cash in on the few buyers that will come through.

[Cord]

So do you think they'll have trouble selling these?

Looking at the US pricing, they're not selling one to me!

That's great. But the question was about whether or not Mitsubishi will have trouble selling these cars in Canada.

[rsxca]

My Subaru dealer said he would let me have one for $43k without any effort on my part and they have not arrived at his dealership yet.

My lease on my volvo ends this summer.  Hopefully by then they'll be giving some good discounts.  I doubt it but I can only wish.  I looked at the leasing numbers and for 48months with 0 down payments would be about $820 tax-in.

[sirAQUAMAN64]

http://www.canadiandriver.com/news_2008/01/21/080121-1.htm

Mitsubishi announces pricing for Lancer Evolution

Montreal, Quebec - Mitsubishi Motor Sales of Canada has announced that the all-new 2008 Lancer Evolution sports sedan will have a retail starting price of $41,498. The 2008 model marks the first time that the "Evo" has been offered for sale in Canada.

The Evolution will be available in three trim levels, the GSR, MR and MR Premium. All feature a 2.0-litre turbocharged and intercooled four-cylinder engine producing 291 horsepower.

The GSR includes a five-speed manual transmission and is priced at $41,498. The MR comes standard with a six-speed Twin-Clutch Sportronic Shift Transmission (TC-SST) and starts at $47,498, while the top-of-the-line MR Premium features a 650-watt Rockford Fosgate stereo with nine speakers, at $51,498.

Aren't the options in the US dirt cheap? Here, $10,000. Sounds steep.

[The Mighty Duck]

Five-speed stick on the GSR?  Nothing wrong with five speeds, but all of the competition has six, don't they?  Hell, you can get a six-speed in a Nissan Versa...

[Jameel]

Since when did Subaru cut the price of the STI to $44,000?

[safristi]

STiCK it 2 'em..........the early adRAPTORS will pay tha FREIGHT.....us mere MORTALS will toil in Van Vain....................

[johngenx]

Since when did Subaru cut the price of the STI to $44,000?

Not sure, but it makes the 2006 at my local dealer priced at $48K look kinda overpriced...

[TopGun]

That's great. But the question was about whether or not Mitsubishi will have trouble selling these cars in Canada.

Given the low volume that will come in, SIVIC has it right...they"ll likely sell every one...which I find frustrating as it does nothing to stop the perpetuation of the pricing delta between US/CAN.

I just choose not to participate...which made me feel better to make it public...not that anyone should care.

[JSCC]

The current situation is not forever sustainable.
Either CAN prices fall or USA prices rise, what's your pick?
I choose 1, but I feel that 2 is more likely to happen.