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      04-25-2011, 05:59 AM   #53
Dante's Avatar

Drives: F87 M2 / F31 330d
Join Date: Nov 2005
Location: Bavaria

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Originally Posted by Eau Rouge View Post

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.
No sorry, not helping much.

Why? Although I totally agree with your point on import taxes and VAT, you didn't consider the most important thing at all: currency rate.

A BMW like the M3, which is still built in Germany, has to be calculated in EUR.
Most parts come from EU and employees have to be payed in EUR.

Lets stick with the example of a bone stock E92 M3:

In the U.S., a bone stock M3 comes to a base price of USD 59,775, incl. destination charge within US.

In Germany, the same car is EUR 57,773 net, without our 19% VAT. Although the car is built about 100 miles away from me, I have to pay between EUR 400 - 800 destination charge for the car beeing delivered to my dealer.
Thats a base price of about EUR 58,300.
To bring our bare german spec. M3 up to U.S. standard, we need to add:
- Auto dimming and tilting mirrors: EUR 320.00
- Adjustable front armrest: EUR 130.00
- Hifi-speaker system: EUR 480.00
- Radio BMW Professional EUR 180.00
- Ambiance lighting: EUR 220.00
- Shadowline trim: 440.00

Our total german base price is: EUR 60,070

Lets compare: Todays exchange rate EUR/USD is 1.4567.
So the US M3 comes down to EUR 41,034. If we deduct a moderate shipping/customs rate of about EUR 1,000 we get a sum of EUR 40,000.

If we leave dealer discounts and dealer margins aside, BMW gets about 1/3 less for each M3 sold in the U.S. The difference grows even more if you add options like Nav (EUR 1,200 more in Germany than in U.S.), DCT (EUR 1,300 more) or Competition Package (EUR 1,900 more).

That is my point and probably the reason why most M Special Editions won't make it overseas: The numbers produced are way to small to subsidize U.S. pricing. Or like Jason put correctly:

Originally Posted by Jason
If bringing the lightweight E90 M3 to the US made business sense, we'd surely see it here.

Last edited by Dante; 04-25-2011 at 06:16 AM. Reason: typos