Quote:
Originally Posted by DGthe3
Not that simple. ZL1s start at $69,200 here. In US dollars, that works out to a bit over $51k. So every ZL1 sold up here is going to bring in a lot less money for GM than if that car was sold in the states.
Now, with an unlimited supply of cars thats not an issue. But production of any car is limited, even if there isn't an artificial cap put on it by the manufacturer. There is always 1 part that can't be produced in numbers greater than X per week or per month. And even if you can bump up production of that part, there is going to be another one with a slightly higher limit. So, there is a practical limit to the number of ZL1s that can get built in a month. If that number is say 500 cars, that means that from now until the 2018 model change over there would be a maximum of less than 4000 ZL1s built in this model year. Demand for the ZL1 in the United States could exceed that. So, in order to maximize profitability it makes sense to limit the sale of cars in low profit markets (like Canada).
On the other hand, if GM were capable of building something like 1000 or 1500 ZL1s per month; or if there is a similar restriction in place for the 2018 then this argument can get tossed out the window.
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You Sir, win the prize. This is exactly why we don't get our share of vehicles up here on lower production models. A la Z06 and ZL1...
The exchange is almost 30% now and if anyone takes the time to build one on the GM.com vs .ca site you will see on average model about a 12%.
So basically in a nutshell GM loses 18% profit potential due to exchange rate market adjustments vs selling the same vehicle in the US.