Benjamin Franklin once said, “Nothing is certain but death and taxes”. However, a landmark agreement between Canada and Korea will ease at least the taxes portion of Franklin’s famous quote.
The CKFTA (Canada-Korea Free Trade Agreement) is Canada’s first free trade agreement in the Asia-Pacific region. It promises to provide new access for Canadian businesses and workers to South Korea, which is the fourth-largest economy in Asia and the 15th-largest in the world.
South Korea serves as a gateway for Canadian businesses and workers into the Asia-Pacific region, and the CKFTA is projected to create thousands of jobs for Canadians, which will in-turn boost Canada’s economy by $1.7 billion.
One of the benefits of the CKFTA is that the federal import duty that was applied to the landed cost of cars manufactured in South Korea will soon be completely eliminated. This is an extra 6.1% in duties that will be abolished thanks to the agreement.
Since the Canadian dollar has been steadily declining in value on international markets, sitting at $1.20 Canadian to $1 US at the time of this article, many automotive analysts have predicted that vehicles prices will soon be raised.
Bucking that line of thinking though, is Hyundai Auto Canada Corporation with their recent announcement that effective January 15th, the MSRP of many of their models have been reduced by up to $1,300 thanks to the CKFTA.
“Hyundai is pleased to pass the benefits of this significant free trade agreement on to consumers,” said Don Romano, President and CEO of Hyundai Auto Canada. “We wanted to take action quickly after the government took the first step toward removing the import duty. Hyundai vehicles have a well-known reputation for making advanced technology and premium features available to consumers at an accessible price.”
The CKFTA eliminates the duty in three annual reductions, with the first being effective this month (January). Vehicles produced within North America will continue to be duty-free due to the existing North American Free Trade Agreement.
“This is definitive proof that the Free Trade Agreement between Canada and South Korea delivers a true benefit to consumers,” added Romano. “We believe that eliminating international trade barriers empower consumers to make more informed purchase decisions by providing a clearer picture of the merits of a product. Pricing is obviously a major factor in that decision, so, by adjusting the prices of Hyundai vehicles, our customers will see just how competitive our products actually are.”
The price reductions affect a wide variety of 2015 model year Hyundai vehicles in the company’s line-up, from the Accent subcompact and Elantra compact, to the Equus full-size premium sedan and 7-passenger Santa Fe XL SUV.
Here are some of examples of the pricing adjustments by model and trim.
Hyundai Veloster 6MT
Previous MSRP – $18,299
New MSRP – $17,999
Savings – $300
Hyundai Accent 5-door L 6MT
Previous MSRP – $13,899
New MSRP – $13,599
Savings – $300
Hyundai Elantra Sedan GL 6AT
Previous MSRP – $20,999
New MSRP – $19,449
Savings – $650
Hyundai Equus Ultimate
Previous MSRP – $72,299
New MSRP – $71,000
Savings – $1,299
Hyundai Santa Fe XL
Previous MSRP – $31,299
New MSRP – $29,999
Savings – $1,300