DRAYTON, Ontario (Nov. 16, 2007)—As the growing strength of the Canadian dollar enables more “grey marketing” of tires, the Tire Dealers Association of Canada (TDAC) is calling on tire manufacturers to consider a more equalized pricing structure in North America to alleviate this strain on tire retailers in Canada.
The value of the Canadian dollar has risen nearly 17 percent since Jan. 1, making wholesale grey marketing of goods available to a growing number of individuals and is enticing Canadian consumers to shop more in the U.S., as well.
“Our membership recognizes the additional costs associated with servicing the Canadian market and accepts the need for a reasonable spread between U.S. and Canadian prices,” said TDAC President Eric Gilbert. “However, this spread is pricing has grown to a level that challenges their very survival.
“It is not the best interest of the manufacturer or tire dealers to ignore this issue hope it will go away,” Mr. Gilbert said. “A solution must be created.”
Each manufacturer has responsibility to the end-user to ensure adequate distribution, professional post sale service and warranty coverage on the products they build, the TDAC said. The price disparity that has emerged in the past several months is disrupting the market's traditional channels of distribution.
“If cross-border shopping and grey marketing continue to exist, in addition to eroding the brand equity of Canadian companies, we risk destroying the traditional Canadian market,” Mr. Gilbert said.