Ever looked longingly at an international car magazine, or a global website, at the cool vehicles that other countries get and we don’t?
The choices for each market may seem random, but automakers spend huge amounts of time and a lot of research to determine what cars, and what engines, will be sold where.
It’s primarily about volume and costs, says Matthew Wilson, product planning manager for BMW Canada. “If you see what we offer globally as engine variants on the 3 Series, [here] we’re carrying less than a third of what’s available,” he says. “Different markets have different demands for engines because of regulations and taxes. We have three gasoline engines and one diesel, but in Europe, where diesel is 70 to 80 per cent of the market, they may have three diesels and one gas engine.
“Some (body) variants aren’t as saleable, either. In Canada, the 3 Series Touring (wagon) might be 5 to 10 per cent of total sales, and in the U.S. it’s even less—but in some European markets, the Touring outsells the sedan.”
Canada may be a big country geographically, but as auto sales go, it’s a relatively small market. It costs a bundle to bring in a global vehicle, since it has to be tested for crash and emissions standards, it may require some alterations for the North American market (even something as minor as adding more cup holders is a huge expense), and it will have to be stocked and marketed.
As a result, the volume needed to offset these costs is seldom enough in Canada alone, and so a vehicle usually needs to appeal to the larger American market before it’s brought in here.
Popularity with enthusiasts is seldom enough, and while auto writers and enthusiasts may bemoan such things as the gradual fading out of manual transmissions, or high-performance models that stay overseas, automakers have to look at hard numbers. If a vehicle’s only going to sell a handful, the automaker will lose money.
“We don’t currently offer the 5 Series Touring in Canada,” Wilson says. “We used to, but when we look at the size of the market, it’s extremely small. It’s a potential 100 to 150 units a year in Canada, so we’ve opted not to bring it into the market.”
Other things to consider
There are several other factors that go into the decision, as well. If a vehicle is made overseas and the local currency is high, it may be impossible to bring it over and sell it at a price that the market will bear. Price within the lineup is also a factor.
If a new model is priced very closely to an existing model, it may not sell—such as a subcompact that’s not much cheaper than the next-size-up compact—or it may cannibalize sales from another model, reducing the volume each needs to be cost-effective.
Infrastructure also plays a part with alternate-fuel vehicles, such as the Honda FC-X Clarity fuel cell model, which is only available in specific areas, mostly in southern California where drivers have access to hydrogen refuelling centres.
Around the world
Local tastes and culture play a huge role. In China, some cars sold as regular sedans here are stretched into extended-wheelbase models, as many executives are driven by chauffeurs. Meanwhile, the big SUVs and pickup trucks that dominate North America’s open roads are a very rare sight on the narrow streets of European cities.
And while the volume clout of the U.S. market generally dictates what we get, overall, we’re more like Europeans in our taste. Station wagons and hatchbacks are more popular here than in the U.S., which is why the Subaru Legacy wagon soldiered on in Canada for a couple of years after it was discontinued south of the border.
Stricter bumper standards in Canada also kept out models such as the Mitsubishi Lancer Evolution, although the car’s redesign—and a loosening of Canadian standards to match the U.S. requirements—finally brought it here.
But sometimes a few make it…
Even with all the research and planning, it finally comes down to sending out the car to see how it does. Sometimes it doesn’t. Nissan’s Cube may be popular with young buyers in Japan, but its quirky design failed to find an audience in Canada. Meanwhile, BMW’s 5 Series Gran Turismo, a departure from the model’s sedan styling, has yet to sell as well as the company expected.
And that niche model that you think the company just has to bring over? Don’t hold your breath. In the world of auto marketing, it’s really all about the model that pays its own way over.