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Friday, October 31, 2014

My Halloween Rant: Discrepency on Tire Prices


Garfi the angry cat from Google images

OK so most of us Canadians and some Europeans have bought all this bullshit over the years on how car prices in the US are lower than in other countries because they sell more units. Basically the more units sold in that country the lower the manufacturers cost per unit thus the lower the purchasers price. This in economics is called economies of scale, if you would like to read more about this; http://en.wikipedia.org/wiki/Economies_of_scale
Yes, I agree that there are more vehicles sold in the US than in Canada and thus the cost per unit is lower as well that the US dollar is 10% higher than the Canadian dollar.

Which brings me to my RANT, winter tires. To my knowledge the only country other than Canada that purchases more winter tires is Russia. So then if economies of scale hold true how come winter tires are approximately 15% cheaper in the US than in Canada?
For example just to compare apples to apples I will use the same retailer and same winter tires, Costco and the Bridgestone Blizzak WS80 & Michelin X-Ice3(195/65/15)
In the US not including any promotions $99.99 and $99.99 respectively.
http://tires2.costco.com/SearchResults.aspx?SearchID=61148cf8-5861-4bee-900a-ba17ae519092
In Canada not including any promotions $114.99 and $138.99 respectively.
http://tires2.costco.ca/SearchResults.aspx?SearchID=700fbf47-1805-446c-a5b6-a601f58d298a

Almost all cities in Canada in the winter require winter tires just to get through our daily commutes, maybe with the exception of the province of British Columbia. Here in Quebec (winter tires are mandatory on all vehicles after December 15 of every year. Just in the province of Quebec in year 2010 that's 5,913,950 vehicles with winter tires installed. http://montrealgazette.com/news/local-news/chart-number-of-vehicles-on-quebec-roads-has-soared-since-1978

How can ALL tire manufacturers justify higher winter tire prices in Canada than in the US. If economies of scale hold true we should be paying much less for our winter tires than our American counterparts. The only answer folks may be cross border shopping. Until manufacturers and retailers get their act together and offer fair pricing across all countries of this world.

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