LAQ
Logically Asked Questions
We do not know. A logical question with no logical answer. We can only guess - see subsequent Questions and Answers.
No one. Perhaps someone should. The situation is so outrageous and cruel something needs to happen. Perhaps this site will help.
China has become a world leader in automobile production. Mexico is a dream come true for China. In most countries a new entrant like China has to discount 10% to 25% to gain Market Share. In Mexico the Prices of existing models are approximately 25% higher than they should be so the Chinese can enter and enjoy far higher Prices that they typically encounter. The existing Brands have, in essence, said "welcome China, here is an opportunity for you to enter our Market, sell vehicles for a higher Price than you imagined and gain a significant Market Share without paying an Induction Fee (discounting) like you have to do everywhere else in the world."
There is no logical answer that we know. Perhaps just because they are greedy and are getting away with it. Perhaps somehow China (government or manufacturers) government encouraged (there continue rumors that there continues significant corruption throughout Mexico) the other Brands and the Mexican Government to make this happen. We do know this situation is terrible for Mexico and the Mexican people. Perhaps this website will be a wakeup call!
It should be! We are trying to make that happen. You can help - make some noise!!!
We do not know but it sure looks like that. The biger question is WHY?
We do not know yet.
We don't know. Perhaps the Brand Manager at Mazda has a conscience. Perhaps they made a mistake and they will increase the Price 25% when they read this - we hope not. (We actually considered removing this vehicle from the data because we were worried that will happen.) Our suggestion is that reader go to Mazda, thank them and buy every Mazda 3 available. Maybe that will serve as a wakeup call to the other Brands.
BIG question. It is outrageous. This we are dealing with in the near future - stay tuned. A whole section of this site will deal with this in the coming weeks.
Because they can get away with that Policy in Mexico. This Policy was banned long ago in the US and Canada.
No, of course not. Historically they have been cheaper. The Auto Manufacturers generally have separate and distinct Pricing in every country. And, in simplified terms they charge whatever the Market can / will bear. Generally if a country has an onerous Tax structure the Pre Tax Wholesale Price will be lower to ease the burden on the Consumer. And, in almost every instance the richer the country (consumers) the higher the Price and in poor countries the Manufacturers have lower Pricing. This because people like Mexicans simply cannot afford as much as their brothers and sisters in rich countries. This was the case in Mexico historically until around 2019 when Prices were raised in Mexico far more and faster than in Canada, US and the rest of the world.
We do not know why this cruel and outrageous event has occurred.
Somewhat. Mexico has IVA (which is a "hidden" tax already included in the Price) which is 16%. Additionally Mexico has another Tax called ISAN which is more deeply hidden. ISAN is similar to a luxury tax as it is non-existent on low end vehicles and more and more percentage wise as the Price increases. In Canada in some Provinces there is a Sales Tax and GST (a Value Added Tax like IVA). In total around 15%. In other provinces these 2 taxes are combined in what is called HST (Harmonized Sales Tax) and this is 15%. All of these Taxes are added to the Price, not hidden in the Price. And Canada is just now (spring 2024) introducing a hidden Luxury Tax on vehicle priced over $100,000 CAD. In the US each State has a Sales Tax - every State is different. These State Taxes average 6%. (Soon we we add a table showing all this info)
So in summary Mexicans and Canadians pay about the same, (15% to 16%) and their American neighbours less than half as much.
No.
Simple question. Complicated answer. In the past the answer was yes. Ground zero for Pricing is the USD. So, logically (and these are LAQs) if the CAD or MXN strengthens relative to the USD then the Price should decrease in that country as a strengthening means that Currency is worth more to the USD. The reverse when the Currency weakens - Prices in the local Currency would increase. An example for the non-mathematicians reading this: A couple of years ago the MXN relative to the USD was 20,00 and now it is approximately 17.00 (It has been as low as 23.00 (weak) and as high as 16.00 (strong) since 2019). So, theoretically, if a vehicle cost $50,000 USD it's equivalent cost in MXN would, if the Rate were 17,00 (like today) be 850,000 MXN. And a couple years ago when the Exchange Rate was 20,00 that $50,000 USD would cost in Pesos (MXN) 1,000,000. SO VEHICLES PRICED IN PESOS SHOULD BE CHEAPER BUT THEY ARE NOT! Just the opposite. Maybe the MBAs working for the Manufacturers have a math problem.
I guess the answer is we do not know - what is happening defies logic. In many ways.
I would have a heart attack or mental meltdown if I didn't try to correct this terrible injustice inflicted on my Mexican friends, family and colleagues.
Enjoy reading
If you have a logical question, send it to us on the contact section. We will happily respond to you and perhapse include it in our LAQs.