Car prices in Canada.
I have decided to write to you partly out of duty and equally so as a sports-car enthusiast.
I enclose a copy of our Air Force magazine Vorair for which I run a motor column. You will notice an italicised paragraph at the commencement of the article which is of grave importance to the British Motor Industry. Canada, which at one time was one of Britain's biggest car purchasers, took only 50 per cent. of 1953's car-figures in 1954. In 1955 that figure of 50 per cent. will drop a further half unless the big three, B.M.C., Rootes, and Standard, can be morally (and from an economic point of view) persuaded to the light of common sense. The U.K. Trade Commissioner took me up on this article and by the time I had finished we were both in complete mutual agreement. I produced a chart of car prices, mark ups, $ to sterling values, etc., which has supposedly been transmitted to the S.M.M.T. However, I felt the situation might interest you. I had previously written to one of England's large motoring journals, but as expected the matter was too controversial to be published !
For your interest I will name the cars mentioned in that paragraph. Morris Oxford, Rover 90 and Jaguar, M.G. TF and Magnette. There are many further examples which I can quote at a later date if you so wish. The most serious aspect of the whole case is the price at which these cars sell in Canada. The Rover sells for $3.54 to the £ sterling (tax free price) and yet all of the popular cars sell at $4.11 to $4.18; in other words an added burden of $2-300 on the price of the car. This of course prices them out of the market. Who in their right mind is really going to buy an Austin A50 at $2,045 when he can get a 123-h.p., six-eight passenger Chevrolet with heater for $2,290? Or a Morris Oxford at $2,145? Or a Hillman VIII saloon for $2,000? There are even worse examples—A30 $4.36 to the £ and M.G. Magnette $4.50!
None of these extraordinary prices can be accounted for. The importing distributor only pays tax at the f.o.b. English distributor price (15 per cent. Excise and 10 per cent, sales), in addition mark-up is smaller than on the domestic models. Austin have a mark-up of 20 per cent., Rootes 17 per cent. and Nuffield 16 to 20 per cent. Jaguar allow 24 per cent. When you realise that the vast majority of sales are conditioned by the price given for the "trade-in," the dealer is not left with an excessive amount to work with. If the Rover can sell for $3,240 (£915) ($3.54 to the £), then why can't the Austin A50, Morris Oxford and Hillman VIII saloon sell for : Austin, $1,695 (£478) instead of $2,045?; Oxford. $1,860 (£525) instead of $2,145?; Hillman, $1,700 (£480) instead of $2,000?
Do I have to explain further why British cars, including sports cars, are being forced off the Canadian market ? Unfortunately, as the market has got progressively more competitive, the British prices here have gone up and up, showing no link with their British factory price !
Nowhere in the world does Britain have a more lucrative long-term market than in Canada. This is a wealthy, continuously expanding market where developed buying habits can be made to stick, provided the manufacturer is willing to give the customer half a chance. And what do we see ? No concern being shown for the long-term potential of this market, but rather a concentration on individual-unit profit, which is both a stupid and small-minded outlook never likely to endear English cars to Canadian customers.
Needless to state, I deplore this situation. Motor Sport has the reputation of being a forcefully minded and courageously truthful journal and it is in that light I have written this epistle. If you wish any further information I'll only be too glad to supply your needs. Should you agree with my arguments you are free to do what you will with the material in this letter.
I am, Yours, etc.,
Winnipeg, Manitoba. E. P. Mclouchlin, F/0, Motor Editor, Vorair.