Canada: Leasing vs. Ride-Sharing


Barely three weeks ago, Daimler AG dialed back profit expectations for the year. The move was seen as a housekeeping exercise to allow Chief Executive Officer Ola Kallenius to start with a clean slate. But on Friday, the Mercedes-Benz maker cut its earnings outlook again—the fourth warning in just over a year—suggesting an alarming degree of disarray at the world's biggest producer of luxury cars at a time when slowing sales and huge investments in new technology are testing the industry.

Source: Bloomberg


Are you gearing up to browse new cars for the first time in a long while? If so, be ready to open your wallet a lot wider. With the average age of new-car trade-ins—excluding leased autos—at just over six years, a shopper whose last purchase was in 2013 could suffer some sticker shock. Last month, buyers paid an average of $36,902 for a new car, according to Edmunds, an auto-research firm and online buying guide. That's $5,468 more than the average price of $31,434 in June 2013.

Source: CNBC


Automakers are pulling back on vehicle incentive programs as sales slow, choosing instead to concentrate on maintaining profitability rather than chasing market share, industry research indicates. In Canada, the average manufacturers' incentive per vehicle was $5,000 in June, down from $6,400 in June 2018, according to J.D. Power data. "That is a big drop, for one month, but it is consistent with the overall trend we see in incentive spending: its declining," said Robert Karwel, senior manager J.D. Power's automotive practice in Canada. The average incentive in May was $5,200, down from $6,400 in May 2018. "It's a shift in strategy from going for market share," Karwel said. "The automakers are saying, 'We know we're going to sell less this year so let's ensure we maintain good profitability.'"

While that might see counterintuitive — in many falling markets, consumers expect to see more discounts, not fewer — automakers are choosing to cut production to match low demand, Karwel said. Incentive spending climbed between 2012 and 2017 and peaked in 2018 at about $10 billion, he said. Automakers cutback due to slowing sales, higher interest rates, and a falling Canadian dollar, Karwel added. This year, total incentive spending is expected to be closer to $8 billion, he said.

Few automakers were willing to comment on their incentive spending, citing competitive concerns. Not all brands have cut incentive spending equally, said dealer adviser Michael Lewicki of Lewicki Automotive Consulting Ltd. He said that incentive spending by the Japan based automakers remains firm, while some European luxury brands and Fiat Chrysler Automobiles have reduced their discounts. Cyril Dimitris, vice-president of sales and marketing at Toyota Canada Inc. said, "We develop our sales plan considering the demand in the marketplace and where we are in our product life cycle, and then put incentives as necessary to achieve that plan. "We happen to currently be in a refreshed state of our core product — RAV4 and Corolla — that is naturally driving demand."

Hyundai Canada, Ford, General Motors, Volkswagen Canada, Nissan Canada, and Honda Canada declined to comment. FCA Canada referred to CEO Mike Manley's comments in January, saying the company has focused on improving financial performance by bolstering pricing through the introduction of new vehicles. When auto sales were reaching their peak at 2.04 million units in 2017, automakers ramped up incentive spending in a bid to grab greater market share, Karwel said. "The retail environment was healthy," he said. "In an expanding market, you can try to achieve those lofty sales goals."

Most incentives, Karwel said, fall into three categories: Cash rebates; discounted interest rates; or favorable leasing terms. But, with sales expected to fall to 1.9 million units this year, according to Scotiabank's Global Auto Report, automakers have been switching gears to protect their profit margins. The fastest way to do that is to pull back incentives, said Brian Murphy, vice-president of research at Canadian Black Book. "Incentives are a big part of the manufacturers' budgets. The nice thing about them is they can turn them off and on at will." For dealers, any slowdown in sales is cause for concern, Karwel said. But profitability remains strong as consumers continue to opt for bigger, more luxurious vehicles. "Every time you talk to dealers about less volume, they're going to be concerned," Karwel said. "But the sky isn't on fire here. People love their SUVs, and the Bank of Canada just said interest rates are not going to change for the rest of the year. That means Canadians are not going to change their purchasing habits."

The fastest-growing segment of the market is vehicles that sell for $40,000 or more, Karwel said, driven by low-interest rates and longer-term loans that make monthly payments more affordable. "I would be more concerned with consumers walking in paying cash, because that is a growing trend this year, and it inhibits dealer profit potential from arranging the financing," Karwel said. Dealers can offset some of the impact of lower manufacturers' incentives by cutting gross margins, taking less profit on each sale in the hope they will make it up in higher volume, Karwel said. In addition, they can try to boost their overall volume of business by offering more used cars for sale. "Yes, we're in a falling market, but new-vehicle deliveries are still phenomenally high," said dealer adviser Lewicki. "Many dealers are still making a good buck in this market."

Source: Automotive News Canada


Pushback dealerships might hear from potential vehicle-lease customers come from individuals who say that using ridesharing services could be more cost-effective rather than taking on a lease contract. Well, the analyst team at ran the numbers — taking into consideration that costs for ridesharing services are climbing — and recently shared an estimated cost analysis to show what the average transportation costs would look like. All of sudden, leasing a vehicle became much more attractive...

Source: Auto Remarketing


Ford Motor Co. and United Auto Workers leaders stretched across the table Monday for the traditional opening handshake that opens contract negotiations. The divide between the two stretches much wider, however: On one side is an automaker coming off a stretch of record profits, but is trying to cut costs to prepare for an autonomous and electric future. On the other side, the labor union is looking for job security and a piece of the fat profits all three Detroit automakers reported annually since workers ratified the last contract in 2015. UAW President Gary Jones set the tone for negotiations with the Detroit Three automakers Monday at Ford's world headquarters in Dearborn, demanding that laborers get what is due to them. The opening handshakes for General Motors Co. and Fiat Chrysler Automobiles take place Tuesday.

Source: The Detroit News


The senior economist of the National Automobile Dealers Association sees a continued "shift" in demand from new cars to used on the horizon, according to a Q&A analysis of the second quarter released by NADA earlier this month. One of the drivers for this movement to used vehicles is the pricing difference between new and pre-owned, which continues to grow, even as used cars become more expensive at franchised dealerships. In the analysis, NADA senior economist Patrick Manzi, who was citing the latest NADA Average Dealership Financial Profile Series, said that used vehicles sold for an average price of $20,979 at franchised dealerships in April.

Source: Auto Remarketing


The Curtiss Zeus Radial V8 is a minimalist $75,000 electric motorcycle The Zeus is a prime example of how the future can thoughtfully reference the past

The future of motorcycling might or might not be completely electric, but even if it is, we don't have to abandon the look or feel of machines of the past -- nor do we have to mindlessly copy them. The 2020 Curtiss Zeus Radial V8 gives us a glimpse of another approach: a bike that is wholly, even radically, modern, yet still shockingly fresh. Designed by Jordan Cornille, it's the first offering from Leeds, Alabama's Curtiss Motorcycles, a high-end cycle-builder founded by Matt Chambers. If these names, and the overall look and feel of the girder-forked bike, seem somehow familiar, that's because the Curtiss Motorcycle Company is a sort of reincarnation of Confederate Motors (which, confusingly, lives on as an unaffiliated company called Confederate Motorcycles). Confederate, founded by Chambers in 1991, was known for its exotic, handcrafted, and fabulously expensive motorcycles. The company's extreme designs -- think classic American V-twin-meets-Pagani Zonda cockpit -- pushed internal-combustion motorcycles as far in that particular stylistic direction as they could possibly go.

The Zeus takes another route entirely. It's as minimal as the Confederate bikes were baroque, yet certain elements -- like those front forks or the arching backbone that defines the machine's profile -- tie the two companies together. Early Zeus drawings and prototypes actually looked much more like the old Confederates; this new iteration takes things in a decidedly less Dieselpunk direction.

And then there's the most distinctive feature: The eight cylindrical batteries arranged in a modified V formation. It's hardly as blatant as Triumph wrapping fuel injection system throttle bodies in castings deliberately designed to mimic old carburetors, but it's a clear nod to the internal combustion-powered past. Even on a bike as radical as this high-dollar, hand-built Curtiss, we can't seem to get away from certain form factors and design elements -- even though, as this design demonstrates, new technology allows us to play with familiar cues in unexpected ways. "With the battery cells packaged inside eight cylindrical towers configured in a flaring radial 'V' pattern, we're not only able to tap into Glenn's iconic V8 form language, but we're also able to achieve maximum battery cooling efficiency," says designer Cornille. Something tells us aesthetics were the primary consideration, but maybe there is a benefit to dividing a battery pack into modules and letting airflow around each one individually. The "Glenn" Cornille is referencing is company namesake Glenn Curtiss, American inventor, and daredevil. Curtiss came of age during the 19th century's bicycle craze, while led naturally into motorcycles; one notable stunt of his was a January 1907 top speed run, which saw him hit 136.36 mph on Florida's Ormond Beach. Curtiss was piloting a V8-powered motorcycle that he designed -- a spindly bike clearly referenced by this new machine.

Source: Autoweek

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions