Posted on July 15, 2012
Motormouth catches up with regular guest and Canada's leading auto analyst Dennis DesRosiers.

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Viraf Baliwalla
9:33 AM on July 28, 2012
Hi Zack, A couple of corrections and comments to what Dennis and Adesa says in this interview session. Importing - there is no problem in importing a new car, you are certainly allowed to do it from a RIV standpoint. The problem is that manufacturers don't want you to import new cars to protect their dealer channels so most prohibit dealers from selling them to buyers across the border. If you have an address in the US, you can buy one then bring it in but there may be some US sales tax implications. The used car market has changed radically the last several months. The loonie has changed but so has the disparity between sale prices so in most cases it doesn't make sense today. The market is cyclical and I predict in the mid to late fall, things may change a bit. Manufacturers may be posting higher sales figures but dealers are sitting on the inventory. Industry sales figures only reflect what manufacturer sales are like and not what consumers are buying. Walk through some dealerships and look at the disk brakes through the rims, you'll see a lot of surface rust meaning they've been sitting on the lot for quite a while. Brands like Hyundai are not having as much problem because they are underestimating demand and so dealers are having problem getting stock. All the comments about new car pricing in this interview were based on incentives and how great they have been. Reality is, when you negotiate the price of a car, you aren't negotiating the price of a car, you're negotiating the profit the dealer will make. All incentives are available to the buyer no matter which dealer they buy from. When there are big incentives, dealers sell that as the discount levels and don't dip into their profit as much. People don't understand there is more left on the table because they see a big discount from the incentive. Adesa - Used cars going through auction - lots of cars going through but many have accidents on them. Even leased vehicles. Good cars are being kept by the dealers on the lot for sale. There is also a big increase in the wholesaler business so many of the better trades will never make it to Adesa. There is much better supply of good quality cars that are accident free at Adesa locations in the US (wholesale dealer only) but it won't make sense to buy and import for many of them at this point. Some companies had stopped leasing a few years back because they had been losing their shirts. However, this was only GMAC (now Ally) and Chrysler. GMAC used to do leasing some other smaller brands as well. The other brands are coming off lease so availability is there. However, the problem in getting good used cars is the number of vehicles without accidents is limited at the wholesale auctions. Adesa offering consumer auctions is great. However, most car buyers are looking for the tax benefit and simplicity of trading a vehicle in. Dennis has obviously been an industry analyst for years and knows his numbers from the manufacturer perspective. We are auto brokers and have daily dealings at the dealer and consumer levels where the real flow of sales into the market takes place. Hope this sheds some light on things. Regards, Viraf Baliwalla President Automall Network

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