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      11-18-2007, 04:02 AM   #16
swamp2
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Yes, but

Quote:
Originally Posted by JEllis View Post
Agreed, I sense a fellow economist in our midst.

IMO, the estimates for the new M3 have become way over inflated some how. I think mostly because MB and Audi are selling there relatively low volume AMG's and R models, respectfully, at a significant premium (65K thereabouts). And, the M3's high sales volume (read supply and demand) in the USA is simply being disregarded by the media and most journalists that did better in English than Economics in school.

The bottom line is that we will all just have to wait and see.

But ask yourselves this.

What would you think if the M3 was 55k MSRP?

My opinion, the M3 would be the best bang for the buck luxury sports car in existence. A title the M3 has had for years.

Do you think BMW could sell 50,000 of these babies at 55k?



Jason
Sure, I agree all the talk (though much of it sarcasm) about a $75-$80k base is pure ridiculousness. However, so is mid to low 50's, IMHO. Furthermore, I would not exactly call AMG cars "specialty" or low volume vehicles any longer. These cars are selling in quite high volumes these days. Pricing is set by competition, greed and desired sales volume. If the main competitors and base prices are:

IS-F: low $50's k (est)
C63 AMG: $63k (est.)
RS4: $66k
911: $73.5k

Why would BMW come in in the mid to low 50's? As much of a good performer the Lexus has already shown to be, I don't think BMW has to worry about it stealing too much market share. Different demographic, different "league" in most folks minds (yes there are many badge whores out there and those who will buy on reputation alone). Sure they can not discount the IS-F totally and that should indeed be a factor that will push the price lower. By the way anyone have any better estimates than those above?

Hmmm looking at that list why not charge high 50's, keep it less expensive by a healthy couple of grand than the two closest competitors, keep it just below the important psychological barrier of $60k and meet both goals of besting most of your competitors on price and besting them as being the best drivers car as well? This sounds like the forumula for success to me.

So like I have said over and over I think the real question is can they push the price just above $60k or will they keep it just below $60k? I think discussions far outside of this range are simply personal fantasy and false hope.

One last detail. Consider the poll results. I am not saying a poll can predict a price but it should be reasonable. Only 1 in 8 (12.5%) believe the car will come in less than $55k. The mean and median are both in the very high 50's. I suppose you could also argue here that I, the author of that poll, skewed the results by posting the range constructed the way I did. It is a fair/possible criticism but only if there is much of a chance for a low 50's price.
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