Genesis G70 Maintenance

[PD705]

Does seem odd. Maybe it is something that changes for 2019 if/when that happens...

Page 3 of the Canadian brochure covers Genesis at Home warranty:
Canadian G70 brochure

Canada is a separate division, unaffiliated with the U.S.. Programs are developed separately. But remember, the scheduled maintenance isn't given away as charity. It's factored into the cost of the car, so part of the higher price of the vehicles in Canada goes to that.

 

[devellis]

Canada is a separate division, unaffiliated with the U.S.. Programs are developed separately. But remember, the scheduled maintenance isn't given away as charity. It's factored into the cost of the car, so part of the higher price of the vehicles in Canada goes to that.

Do we know that the vehicles are higher priced in Canada, correcting for US/Canadian currency exchange rates?

 

[Mark_888]

May have something to do with our trade agreement with South Korea?

Those are determined by each local marketing group, and Hyundai Canada is different than Hyundai Motor America (and its Genesis Motors America division). Genesis Motors (or Hyundai) in Korea has nothing to do with it.

In the USA, all Hyundai and Genesis vehicles get a free extended 10 year - 100K mile powertrain warranty (for original owner only) that is not given to Canadian buyers.

 

[EdP]

Do we know that the vehicles are higher priced in Canada, correcting for US/Canadian currency exchange rates?

I did a comparison on one where a selling price was posted. The difference was not very much, but you also have to factor in the dealer cut. They can keep some of the money for maintenance that in the US would go to dealer profit.

 

[canucklehead604]

WTF?!?!!? Why would Canada get 2 more years and way more mileage than the USA ?

^ meh, all kinds of market-specific nuances within the auto industry. we (CAD) likely give up something to get the extra coverage. very hard to compare apples-to-apples when crossing borders. CAD does not get the 10 year powertrain warranty, for example. i would take the extra warranty over extra free scheduled maintenance any day so that's a win for the US in my books.

When my wife bought her Highlander in 2015, Toyota USA provided 2 years free scheduled maintenance, but at 10,000 mile oil change intervals, 5000 mile service intervals. in Canada, we didn't get any free service and our oil change intervals were 5000 miles (8k kms). but we did get a rear bumper protector strip and mud guards and 2 sets of floor mats, among other minor tweaks, that the US market didn't get as standard. we also got much nicer 19" wheels not available in the US.

 

[Mark_888]

I did a comparison on one where a selling price was posted. The difference was not very much, but you also have to factor in the dealer cut. They can keep some of the money for maintenance that in the US would go to dealer profit.

Obvously, a part of that has to do with exchange rate with South Korean Won for the US dollar and Canadian dollar. Normally, foreign automakers don't make changes in prices due to currency fluctuations, except over the long term (more than one year), otherwise prices would go up and down like a yo-yo.

 

[Edmguy]

Canada is a separate division, unaffiliated with the U.S.. Programs are developed separately. But remember, the scheduled maintenance isn't given away as charity. It's factored into the cost of the car, so part of the higher price of the vehicles in Canada goes to that.

I realize they are separate, but I still think it is odd to have that kind of a difference. Most manufactures have the same warranty in both countries.

 

[Mark_888]

I realize they are separate, but I still think it is odd to have that kind of a difference. Most manufactures have the same warranty in both countries.

No, they don't, if you look at all locations around the world. Maybe they are similar in Canada and USA for most brands, but that is not the entire world.

The point is that those decisions are made locally, and the local marketing group bears the cost of the warranty, not the actual manufacturer (if auto is imported).

 

[devellis]

I realize they are separate, but I still think it is odd to have that kind of a difference. Most manufactures have the same warranty in both countries.

Yesterday's average exchange rate was 1067.51 won to the dollar; in Jan, 2017, it was 1064.51 wan to the dollar. That's less than a 0.3% change over that interval. So, at least for the won and the US dollar, the rates have been very stable over the past 17 months or so. The same site didn't have rates for as long a period comparing the won to the CAD, but over the past 6 months, the CAD has lost a fair bit of ground against the won.

Based on that limited amount of information (and it definitely is limited), the CAD/USD exchange rate should offer a generous estimate of what US pricing should be. That is, the US prices would be lower in won than the estimate you'd get from converting from CAD to USD. So, if we were comparing apples-to-apples, which we clearly aren't, the US price should be lower than the USD-equivalent of the Canadian price (because of the performance difference between the USD and CAD relative to the won). But that's not likely to happen.

Part of the reason is that the cars won't have identical specs but the bigger factor is that the pricing strategies in the two countries are independent of one another and each group is going to charge what they think their market will bear, irrespective of what pricing is in other markets. I suspect that US prices will represent a poorer value all things considered, than the Canadian prices because that's the way US companies seem to roll. If that non-equivalence is too great, I think they'll be shooting themselves in the foot big-time. But the US distributors seem already to have elevated that sort of marksmanship to an art form.

 

[BJC]

May have something to do with our trade agreement with South Korea?

Nope. US had an FTA with Korea before we did.
It's purely a marketing choice by Genesis.

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[Mark_888]

So, at least for the won and the US dollar, the rates have been very stable over the past 17 months or so.

Over the last 5 years, the exchange rate between the USD and South Korean Won has varied more than one might realize. The graph bellows shows the number of Won per Dollar, which has varied by almost 25% from the lows to the highs.

The point is that Hyundai has not changed its US prices on imported vehicles from South Korea over that same time frame. The reasons for that are somewhat complex. But because of that, trying to compare US prices of a Genesis to Canadian prices of a Genesis is even more complex.

 

[PD705]

Canadian vehicle prices are "sticky." Even though most Canadian OEMs benchmark their costs against the U.S. dollar in some way, prices don't move quickly (up or down). Sure, an OEM could in theory dramatically increase prices in relation to a suddenly unfavourable exchange, but the resulting consumer backlash would be violent - no one will risk that.

Instead, one by one the OEMs incrementally adjust prices, but the process takes years. In the compact luxury segment where G70 competes, most of the models in Canada are only sold at an 8% premium versus their U.S. equivalent. Those who are simply looking at the daily exchange and assuming the Canadian price is bench marked against that are misinformed about how these things work.

 

[Mark_888]

Canadian vehicle prices are "sticky." Even though most Canadian OEMs benchmark their costs against the U.S. dollar in some way, prices don't move quickly (up or down). Sure, an OEM could in theory dramatically increase prices in relation to a suddenly unfavourable exchange, but the resulting consumer backlash would be violent - no one will risk that.

Instead, one by one the OEMs incrementally adjust prices, but the process takes years. In the compact luxury segment where GM competes, most of the models in Canada are only sold at an 8% premium versus their U.S. equivalent. Those who are simply looking at the daily exchange and assuming the Canadian price is bench marked against that are misinformed about how these things work.

I agree 100% with that.

Plus, for the Genesis products manufactured in South Korea, Hyundai Canada deals with exchange rates between Canada and South Korea, and has nothing to do with USA currency values. When it comes to other Hyundai products made in the USA, that is a different matter,

Same exact scenarios exist for German automakers importing cars into the USA. They don't adjust their prices based on USD and Euro exchange rates, except in the long term.

 

[Beefer]

I agree 100% with that.

Plus, for the Genesis products manufactured in South Korea, Hyundai Canada deals with exchange rates between Canada and South Korea, and has nothing to do with USA currency values. When it comes to other Hyundai products made in the USA, that is a different matter,

Same exact scenarios exist for German automakers importing cars into the USA. They don't adjust their prices based on USD and Euro exchange rates, except in the long term.

I may be wrong in this...but I think pricing in the US and Canada affect each other slightly? Reason I say this...if a car is very cheap in either country...folks would purchase across the boarder. Yes it may be a pain...duty...getting speedo's adjusted...emission adjustments, etc. But the purchase price might offset all that.

So I would imagine that the price would have to remain competitive within the home country to keep sales local.

Not sure if I am talking out my arse or what.

 

[EdP]

I may be wrong in this...but I think pricing in the US and Canada affect each other slightly? Reason I say this...if a car is very cheap in either country...folks would purchase across the boarder.
Not sure if I am talking out my arse or what.

Makes sense to me. Cars are no different than any other purchased item. We are next door neighbors so we have to be reasonably close in price or you just piss off a bunch of customers. Not much different than an order of fries at McD's or Burger King.

 

[Stephen5242]

There would be a lot of duty on a vehicle not manufactured in north america. NAFTA currently removes any duties for vehicles purchased in the US, by Canadians that are made in Canada, US or Mexico and vise versa. When the Canadian dollar is at par with the US a great deal can be saved if purchased in the US. And sometimes vehicles manufactured in Canada can be cheaper in the US.

 

[Mark_888]

I may be wrong in this...but I think pricing in the US and Canada affect each other slightly? Reason I say this...if a car is very cheap in either country...folks would purchase across the boarder. Yes it may be a pain...duty...getting speedo's adjusted...emission adjustments, etc. But the purchase price might offset all that.

So I would imagine that the price would have to remain competitive within the home country to keep sales local.

Not sure if I am talking out my arse or what.

The idea of purchasing a car in Canada and bringing it back to the USA has been discussed many times. There are warranty issues, as the Canadian warranty is usually not honored in the USA, unless special permission is granted. I doubt that permission would be granted if they knew it was purchased in Canada and immediately brought to the USA.

Even if the new car Canadian warranty was honored in the USA, one would be missing out on the 10 year - 100K mile extended powertrain warranty for original purchasers in the USA, which is only country that has that warranty. Warranties to consumers are provided by Hyundai Motor America and Hyundai Canada, and not by Hyundai Motor Korea.

The prices in Canada and USA might appear to affect each other, but that has more to do with price of the Korean Won.

If you look back about 5-7 years ago when the CAD was about the same value as the USD (the CAD is only worth about $0.75 USD now, but 7 years ago it was worth $1.05 USD), and compare Genesis prices charged to Canadians, I don't think prices in Canada have increased much over the inflation rate.

 

[canucklehead604]

^ +1. getting off topic a bit, but with certain vehicles, particularly out of warranty and rare models, there was a decent market for US vehicles in Canada back in ~2009-2012. that's when the exchange was close to par, and supply in US meant that we saw a ~20-30% discount by importing. in more recent years, some CAD cars have been going south due to the favorable exchange - a lot of light duty trucks and fleet vehicles. many US dealers close to the border refused to sell to canucks though, there was an agreement with CAD dealers who were complaining.

this may be out of date, but here's a site that shows which makes allow warranties to transfer:
Automobile Protection Association | Canadian Warranty information on new cars bought in the U.S.

i imported an Infiniti to CAD in 2010. not for savings (i broke about even), but for supply. i simply couldn't find the model up here after 6+ months of searching. based on my experience, people and brokers doing so are a very small share of the new and used car market.

 

[Mark_888]

this may be out of date, but here's a site that shows which makes allow warranties to transfer:
Automobile Protection Association | Canadian Warranty information on new cars bought in the U.S.

That's good info for Canadains, but does not apply to cars purchased in Canada and imported into the USA.

 

[Edmguy]

No, they don't, if you look at all locations around the world. Maybe they are similar in Canada and USA for most brands, but that is not the entire world.

The point is that those decisions are made locally, and the local marketing group bears the cost of the warranty, not the actual manufacturer (if auto is imported).

I was only referring to Canada vs US warranties which is what we were discussing. Not around the world.

Yesterday's average exchange rate was 1067.51 won to the dollar; in Jan, 2017, it was 1064.51 wan to the dollar. That's less than a 0.3% change over that interval. So, at least for the won and the US dollar, the rates have been very stable over the past 17 months or so. The same site didn't have rates for as long a period comparing the won to the CAD, but over the past 6 months, the CAD has lost a fair bit of ground against the won.

I was talking about warranty and the fact that in Canada we technically prepay for our service. Not really discussing FX.