Automotive News Canada - May 2019 - v2 - 3

SECOND FRONT

05.19

The buck stops where?
Falling loonie
increases vehicle
costs, but who
will pay the tab?
Automakers?
Dealers?
Consumers?

The Sinaloa drug cartel of Mexico
is believed behind an effort to ship
methamphetamine to Canada hidden in
the spare tires of Ford Fusions built there.
P H O T O : O N TA R I O P R O V I N C I A L P O L I C E

Mexico drug ring drops
ball on spare-tire meth
Alert staff at
Canadian Ford
dealerships tipped
off police to an
international
operation
BY JOE KNYCHA

AUTOMOTIVE NEWS CANADA

A LOGISTICAL MISTAKE BY
smugglers appears to be responsible for the arrival of large
shipments of illegal methamphetamine from Mexico to 13
Ford dealerships in three eastern Canadian provinces.
Authorities believe the drugs
found in mid-to-late December
and January 2019 were never
intended to reach dealerships
in Ontario, Quebec and New
Brunswick.
"An error" appears to have
been made by the persons
responsible for putting the
drugs in the cars in the first
place, said Ontario Provincial
Police (OPP) Detective Insp.

Rob Henderson, major case
manager for the Organized
Crime Enforcement Bureau
(OCEB).
Police believe the vehicles
"were not destined for dealerships with methamphetamine
secreted in them," he said, indicating the smugglers failed
to retrieve their illicit cargo
before the rail shipment was
broken up, and the vehicles
delivered to individual dealerships.
OPP intercepted 180 kilograms of meth with a street
value of about $4.5 million. It
was packed into spare tires
and hidden in the trunks
of Ford Fusion cars built
in Hermosillo, Mexico, and
shipped by rail to Canada.
Police suspect smugglers
affiliated with the Sinaloa drug
cartel gained access to the cars
after they left the assembly
plant, said Henderson, though
how, when and where remains
under investigation.
The drugs were first found
by dealership staff in four

SEE SPARE PAGE 4

story in Tech Trends on Page 20 of the April
CLARIFICATION Aedition
cited a Foster and Sullivan research

report warning that BlackBerry's QNX automotive infotainment platform
could lose market leadership to Android Automotive by 2025 as automakers show preference for Android-based apps. In fact, Blackberry said
that in January it introduced its new QNX Platform for Digital Cockpits,
which it said allows automakers to offer a reliable, secure QNX-based digital instrument cluster and infotainment system and provides access to
Android-based applications such as Google Maps and Google Play Music
all from a single electronic control unit.

TRANS-CANADA NEWS

ONE CENT EQUALS $250

Canadians' buying power
has fallen, Romano said.
"We're paying more for
everything," he said, "not
just cars."
Prices don't immediately
increase, but since 2016, the
average transaction price
of a car sold in Canada has
risen to $35,200 from $33,000,
Romano said, citing figures
supplied by the Californiabased market researcher
J.D. Power.

DesRosiers estimates
that for every US one-cent
decline in the value of the
Canadian dollar, the importBy DANA FLAVELLE
ed cost of a vehicle rises
TORONTO CORRESPONDENT
by $250 to $300. His figures
assume an average retail
WHAT'S FOR SALE AFFECTED
CANADIAN DEALERS
price of $35,000, including
and automakers could face
The biggest impact of
cars and light trucks, with
some tough choices
the low dollar on Canadian
an average import
if the Canadian dolauto dealers is the availcost of $21,000.
lar continues to fall
ability of product from
Most automakers
against its U.S. coundon't like to raise the the manufacturers, said
terpart, industry
Shahin Alizadeh, presimanufacturer's sugexperts say.
dent and CEO of Downtown
gested retail price,
With 70-80 per
Autogroup in Toronto,
especially when
cent of vehicles sold
which sells 12 brands across
the market is soft,
in Canada coming
11 dealerships.
said Brian Murphy,
Automakers
from outside the
"If the car is hot
vice-presresist raising
country - mainin the U.S., imagident of
suggested
ly from the United
ine having a 35 per
research at
retail prices
States but also from when markets Canadian
cent advantage in
Europe and Asia
making a decision
Black Book,
are soft, said
- an unfavourwhere does the
a
dealers'
Brian Murphy
able exchange rate
product land, espeguide to newof Canadian
becomes a critical
cially in the luxury
and usedBlack Book.
factor in their cost.
brands," Alizadeh
car prices.
PHOTO:
A
low
Canadian
CANADIAN
"There's no
told Automotive
Instead,
dollar limits
BLACK BOOK
doubt the value of
News Canada.
they will
dealers' ability
the dollar does affect pric"Why would they
use other strategies to get 'hot'
ing in Canada," said Dennis
want to collect
to cut costs, such as product from
DesRosiers, president of
reducing incentives manufacturers, Canadian dollars?"
DesRosiers Automotive
On the flip side,
or making more
said Shahin
Consultants in Richmond
a
higher
U.S. dollar
standard features
Alizadeh,
Hill, Ont.
benefits Canadian
optional, Murphy
president
The only remaining ques- said.
dealers by boostand CEO of
tion is who pays: the autoing demand for
The industry
Downtown
maker, the dealer or the con- typically tries to
Canadian-owned
Autogroup in
sumer?
used vehicles from
manage short-term Toronto.
If the automaker passes
American buyers,
swings in currenPHOTO:
DOWNTOWN
the price increase along to
Alizadeh said.
cy valuations, but
AUTOGROUP
the consumer, it risks losing
Automakers
"ultimately it's
market share. If it swallows
with assembly plants in
the consumer that pays,"
the higher cost, that hurts
Canada can benefit from
said Don Romano, CEO of
its profit margin, DesRosiers Hyundai Canada.
a lower Canadian dollar,
said.
depending on how many
Since 2014, when the
The loonie slumped to
parts they import, because
value of the Canadian dola near four-month low in
they sell 85 per cent of what
lar reached US 90 cents,
they make outside the country, most of it to the United
States, said David Adams,
CEO of Global Automakers
of Canada (GAC). Toyota,
Honda, Ford, General
Motors and Fiat Chrysler
Automobiles all have

Ultimately, it's the
consumer that pays.

DON ROMANO

Hyundai Canada CEO

5,000 KILOMETRES OF STORIES

Son acquires father's
former dealership

Nick Beyak honoured his father's
legacy by buying back his former Fort
Frances dealership. P H O T O : D R Y D E N G M

April - at US 74.04 - after
the Bank of Canada said
economic growth this year
would be slower than expected and held its trendsetting
interest rate at 1.75 per cent.

FORT FRANCES, ONT. - NICK
Beyak has acquired Jim MacDonald
Motors, his third Western Ontario
auto dealership.
"Being from Fort [Frances] and
having the GM dealership here in
Dryden and the [Sunset Country] Ford
dealership down there, it was a logical choice," he told the Fort Frances
Times.
"Jim [MacDonald] has had a long

career in Fort Frances and he was
looking to retire," Beyak said. "And
we already had a lot of GM customers
in Fort. It was a good fit for us."
Beyak said his father, Tony, sold
Causeway Pontiac GMC to MacDonald
in 2000 when the Beyak family bought
the GM dealership in Dryden and
moved there.
The MacDonald deal included his
father's original Causeway building
on Kings Highway. "It gave me a pretty good feeling to have that building

SEE CADA PAGE 4

back. With the role model he was for
me, the teacher he was for me, it was
very touching," Beyak said
- Joe Knycha

Golden Mile dealers hurt
by rail transit project
SCARBOROUGH, ONT. - AS
construction of the Greater Toronto
Area crosstown light-rail transit project drags on - causing drivers to
avoid the city's Golden Mile stretch
along Eglington Ave. - several auto

SEE TRANS-CANADA PAGE 20

Automotive News Canada - May 2019 - v2

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