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      12-25-2007, 11:37 PM   #7
Voltigeur
MacroRisk
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Drives: M3 E92 ED'09 / 335d Sport DD
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Quote:
Originally Posted by Sick Speed View Post
Dude...go back to school. Less than an 8% workforce reduction and what is your point exactly? Go back to school.

Better yet...shut the f**K up about the cost and go buy something you can afford and then get on THAT board.

SS
Huh? This isn't about my ability to afford this car. Not an issue. Did you get up on the wrong side of the bed today? It's Xmas for f**k's sake! At least your avatar is appropriate to your disposition

My premise is that the macro back-drop will, at the margin have an impact on the demand for cars like this. Maybe not in the early release period but over the next 12-18m. BMW sees the slowing and acted ahead of time to cut jobs, ie cost. Sounds a lot like Micro 101 to me (marginal cost to price) with some Macro thrown in for good measure. Also, in my world a cut of -8% to a company's workforce is meaningful, as labor is the largest cost for an auto manufacturer.

Here's some current 'Street research on the macro/micro issues (below); and this time Euro manufacturers have a HIGH EUR/USD to challenge their profitability (back in '01 slow the EUR/USD was 1.1 - 1.2 - it's 0.70 today, a whopping -36% to over -40% depreciation, which has an enormous impact on European exporters' profitability.
Quote:
Originally Posted by Morgan Stanley Equity Research - BMW, FX downgrades, 12/13/2007
BMW is highly exposed to the US consumer, with over 25% of unit sales on the US, and to the US exchange rate.."
My point on this is that it would be a mistake for BMW to charge too much to early adopters - then what once the hubbub dies down; discounts come (even 'hidden' like cheaper finance) and piss off keen early buyers (important for marketing as they are typically passionate and create good marketing buzz); and also better to sell as many units as possible to amortize the significant R&D expense (BMW is one of the largest spenders in the auto manufacturing world in R&D / Sales).


Source: Bloomberg, SCB

And last time I was at "school" (or university as I prefer to call it) a marketing case couldn't be better exemplified as phucked up as this one. I have read the views of many people on m3post who are frustrated aficionados with regard to this launch/pricing: not a good way to launch a product.

Last point: I do this sh*t for a living - no need to go back to school. For what it's worth, I expect the line below to trend up in 08 as the global economy slows -which will make it easier for BMW to keep prices down in the U.S.

USD/EUR, 2001 - 07 & US recessions


Source: FactSet
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Last edited by Voltigeur; 12-26-2007 at 01:36 AM. Reason: addendum