Strong Canadian dollar means lower satisfaction with Canadian car sites

The Canadian dollar's rise against the ever-weakening greenback was one of 2007's news items of the year in Canada. The loonie's increasing strength was a source of pride for Canadians, but also of frustration. In my cases, prices did not change to reflect the increased purchasing power of the Canadian dollar, and many Canadians frequently looked south with an envious eye to see that Americans were still enjoying significantly lower prices on many goods, notably cars. The perception that Canadian car-buyers were getting a raw deal was widely-held and was well-documented by the mainstream media.

But did this backlash against a perceived pricing imbalance go so far as to affect website satisfaction for Canadian automotive sites? Below is a graph showing the movement of the cumulative iPSI score for 9 Canadian car sites versus the movement of the C$/USD$ exchange rate. The results are eye-opening:

Some points:

1) Customer satisfaction plummeted dramatically during the week that the loonie hit its peak against the US dollar.

2) Even when the Canadian currency began to lose ground against the US dollar, the collateral damage to auto site satisfaction continued unabated. Car sales slowed 5% in the month of December, despite generous discounts and incentives. Likely this was fueled by increased media coverage of stories detailing cross-border pricing disparities.

3) Interestingly, a stronger Canadian dollar in the latter half of December correlated with higher satisfaction on the Canadian car sites. This could be evidence that Canadian car marketers are now being more proactive, offering, as is the case with Nissan, bonus programs aimed at fairness.

4) Finally, take a look at some verbatim feedback culled from one of the studies I looked at. These reflect the frustration of ordinary car buyers, as well as their collective sense of being taken for a ride

- “Bloated prices based on the old Canadian dollar.”

- “Finding how much Canadians are being ripped off as compared with the USA.”

- “MSRP pricing is still completely out of line with US pricing. I am now considering importing a vehicle from the US if Canadian auto retailers don't adjust MSRPs or offer exchange rate rebates of some sort.”

Powerful stuff, indeed.