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      04-24-2011, 09:59 PM   #52
crackberry's Avatar

Drives: Porsche Carrera GTS (997.2)
Join Date: Sep 2010
Location: southern california

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Originally Posted by Eau Rouge View Post
Interesting interview. One bit of info that would have been useful to know more about, IMHO of course, is...

- Month/Year that production of E92 M3 will end.

Maybe this will help.

AFAIK, BMW does not collect the monies that are the difference between what US customers pay and what the rest of the world pays for their BMW's. The reason the price of an M3 is Australia, for example, is so much greater than an M3 sold in the US market is thanks to the Australian government slapping LCT (Luxury Car Tax), GST (Good and Services Tax) on all imported cars. Those taxes can combine to substantially increase the cost of the car before the dealer even begins to think about increasing its profit margin with an at-the-dealership-level-markup.

In short, BMW customers around the world are "subsidizing" their own governments by paying ridiculously high prices for imported automobiles; LCT, GST, VRT(Vehicle Registration Tax) which, depending on the country, any of the three can, by itself, or in combination drive the cost of the car up from x% to xxx% of what we think of as MSRP).

So, what we have is a situation that demands BMW customers fork over more cash thanks to governments of the world engaging in protectionism designed to spare their respective national automotive manufacturers from having to compete with foreign manufacturers on an even playing field. The huge taxes on imports artificially inflate the price of BMW's or any other imported brand automobile in a given country, and in market economies we can bank on the law of demand playing its part: When the price of a good or service increases, the demand for that good or service decreases. That, my friend, is how a government can hold down the demand for the foreign good with the manufacturer of the national good continuing to see demand for its relatively inexpensive good. Of course, if you live in a place like Switzerland, which has no automobile manufacturers, the import taxes are not a factor since the Swiss Government has nothing to protect from foreign competition.

EDIT: Having noted you are advertising living in Germany, BMW's only incur the VAT rather than import tax + VAT. You have it easy compared to most others in the world that are looking at BMW's.
THANK YOU! that was truly a great speech. i didnt know about the swiss thing, but it was really informative.

im glad we dont have a VAT in the states and i hope we continue to in the future.