Quebec, a "distinct" market in America

For Immediate Release

March 22, 2006

After an uninterrupted 16 year run in which each year’s new vehicles were heavier and more powerful than the year before, the automakers are finally turning toward small, fun-to-drive cars for 2006. Quebec is Canada’s small car capital, with more than half the new vehicles on the road falling into the compact or subcompact class, compared to about 35% for the rest of Canada. The Toyota Yaris is the most fuel efficient car on the market with a conventional gas engine, and almost six out of ten are sold in Quebec. With its roomy and comfortable interior, and perky performance, the Yaris has what most buyers need, in addition to the best reliability and lowest operating costs of any car on the market. This year will see the introduction of the Honda Fit, which is smaller than the popular Civic, and the Nissan Versa, which is smaller than Nissan’s current entry-level car, the Sentra. The APA is projecting subcompact sales will more than double between 2002 and 2007.

One of the most advanced 2006 vehicles sells for the moderate price of $27,000. The redesigned Honda Civic Hybrid sets new standards for economy, safety and refined performance at an attractive price. “This year all Civics come standard with side curtain airbags, which offer much better protection in a side impact than conventional air bags installed in the seatback,” said APA president, George Iny. APA calculated an annual fuel savings with the Hybrid of only $300 compared to a regular Civic, which is already very fuel efficient. However, Iny says the Civic Hybrid can meet the needs of many intermediate car buyers, in which case the fuel savings will be about $600 with little sacrifice in utility or comfort.

Automaker Incentives: housecleaning in order
The APA released the results of its latest investigation of automaker promotions today. The APA says that some automakers are passing on part of the cost of the promotions to their dealers. “By way of example, Honda’s $1,000 of free gas with every purchase costs the dealer $250 or $500 to buy the gas card!” said Iny. Volvo requires its dealers to pay an $850 or $1,000 “participation fee” per vehicle to qualify for low lease rates. With current margins, no dealer can afford to absorb the value of these large contributions, so the consumer ends up paying in the form of a smaller discount off the full retail price while the promotion is running.

This year, some carmakers increased charges for transportation and vehicle preparation. Transport and prep now costs $1,345 for the Hyundai Accent which is assembled in Korea, whereas Kia charges $1,090 for the similar Rio, which also comes from Korea. Transport and prep is $1,455 for Honda’s Odyssey and Pilot, which are Made in USA. The equivalent charge for Japanese Hondas is only $1,310!

According to the APA, Hyundai Canada’s financial arm is the master of complicated promotions. Hyundai offers no payments for the first year of a one year loan… The catch? Interest starts to run after 335 days. Hyundai and Kia levy a $350 “acquisition” fee on every lease. The APA says it should be included in the published monthly payment or advertised lease interest rate.

Advertised prices for several Nissan and Mazda models apply to the vehicle in just one color --often not the colour of the car in the ad! All other colours incur a surcharge of $125. According to the APA, advertised prices should apply to the vehicle in most colours.

Encan Direct H. Grégoire suing the Office de la protection du consommateur
Encan Direct H. Grégoire, Quebec’s largest used car retailer, has sued to obtain an injunction against the Office de la protection du consommateur (OPC or Consumer Protection Office) over information posted on the OPC’s website.

The used car superstores have revolutionized the way used vehicles are sold in Quebec. They feature an excellent supply of late-model vehicles at low everyday prices. Advertising by the used car superstores is still incomplete or misleading. Some retailers claim to be bankruptcy liquidators or wholesale distributors, when they are mainly involved in retail selling. Ads frequently omit mileages of the vehicles for sale, and advertised monthly payments sometimes do not include interest rates. Some of the superstores make it very difficult for the consumer to obtain a pre-purchase inspection by a mechanic of their choice. New regulations from the Consumer Protection Office are supposedly around the corner; they will impose more explicit advertising guidelines, and require that extra fees be included in the price of the vehicle. Dealers will be required to allow a third-party inspection before the purchase. For a reliable used car inspection in the Montreal area, the APA recommends a mobile inspection service (call Andrew Bleakley at 514-751-0871).