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      06-08-2007, 01:36 AM   #23
m_bazeepaymon
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its funny how the cars are imported to America and its cheaper...

thank god
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      06-08-2007, 02:41 AM   #24
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It is not about taxes. It is about a country's GDP (gross domestic product(s))export to import ratio. The more a country imports and the less they export determines the value of their currency and foreign exchange rates. Meaning if you import a hell of a lot more than you export your currency will devalue and provide less buying power hence the reason for the high cost of any import. If export prices are low conversely import prices will be sky high which has long plagued New Zealand.

Also factored in are how many units any given import will sell in any area which will drive the price down simply through volume. New Zealand and Australia are completely surrounded by thousands of miles of water meaning a finite number of units that can sell equating to still higher prices.

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Not exactly--what you are saying does indeed affect the price, but it will not double or triple it. (I guess if BMW is selling only selling 5 M3s in New Zealand a year, your second point might be relevant although I don't understand how the "thousands of miles of water" has anything to do with the number of units being sold in New Zealand or Australia as transportation costs are fairly negligible compared to the price of an M3; that would seem to be more of a factor of the market size and specific product demand characteristics). For instance, my parents live in Istanbul and they just bought a Toyota. I looked over the documents, and they were taxed over 50% (and the Turkish currency has been fairly steady against the Euro for the past year two). Meaning, Toyota charged them about $20k, and the final price was well over $30k. This is despite the fact that Turkey is a member of the European free trade zone, so those are not import taxes or anything--just local vehicle sales taxes. I know for a fact that the same is true for many countries in Europe. For instance, my Danish friends complain about the same thing all the time--for about $20k, they could only get a 4-5 year old compact Ford wagon. Also, many countries have serious environmental penalties for large engines or inefficient cars in general--nothing like the marginal gas guzzler tax we have in the US. Finally, the export/import ratio is not the only variable that determines a currency's foreign exchange rate. There are other variables as well such as capital inflow.

Last edited by lucid; 06-08-2007 at 03:06 AM.
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      06-08-2007, 05:43 AM   #25
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In Norway the new M3 cost EURO 160.000.- included all options. I think only Denmark can beat this.
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      06-08-2007, 07:41 AM   #26
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Not exactly--what you are saying does indeed affect the price, but it will not double or triple it. (I guess if BMW is selling only selling 5 M3s in New Zealand a year, your second point might be relevant although I don't understand how the "thousands of miles of water" has anything to do with the number of units being sold in New Zealand or Australia as transportation costs are fairly negligible compared to the price of an M3; that would seem to be more of a factor of the market size and specific product demand characteristics). For instance, my parents live in Istanbul and they just bought a Toyota. I looked over the documents, and they were taxed over 50% (and the Turkish currency has been fairly steady against the Euro for the past year two). Meaning, Toyota charged them about $20k, and the final price was well over $30k. This is despite the fact that Turkey is a member of the European free trade zone, so those are not import taxes or anything--just local vehicle sales taxes. I know for a fact that the same is true for many countries in Europe. For instance, my Danish friends complain about the same thing all the time--for about $20k, they could only get a 4-5 year old compact Ford wagon. Also, many countries have serious environmental penalties for large engines or inefficient cars in general--nothing like the marginal gas guzzler tax we have in the US. Finally, the export/import ratio is not the only variable that determines a currency's foreign exchange rate. There are other variables as well such as capital inflow.

In general, I agree to what you are saying. But there is one more factor: In Switzerland and Germany the price is the same (+-2%). In both countries there is no special tax on cars. In Switzerland VAT is 7.6%, in Germany 19%. The price is about 25-30% higher than in the USA. So my conclusion is that the price does not only depend on taxes and import/export ratio but also on the buying power of a region, also know as BigMac index...
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      06-08-2007, 08:37 AM   #27
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In general, I agree to what you are saying. But there is one more factor: In Switzerland and Germany the price is the same (+-2%). In both countries there is no special tax on cars. In Switzerland VAT is 7.6%, in Germany 19%. The price is about 25-30% higher than in the USA. So my conclusion is that the price does not only depend on taxes and import/export ratio but also on the buying power of a region, also know as BigMac index...
True. Local supply/demand curves will obviously affect the price. I read in the article that was recently posted on another thread on this forum that 50% of all M3s will end up in the US market and that they are planning on making about 100000 of M3s, so it sounds like 50000 of them will make it here (someone correct me on this if I've misremembered). The rest will be spread around the world (with the exception of Germany, which also gets a sizable chunk).
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      06-08-2007, 05:41 PM   #28
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Not exactly--what you are saying does indeed affect the price, but it will not double or triple it. (I guess if BMW is selling only selling 5 M3s in New Zealand a year, your second point might be relevant although I don't understand how the "thousands of miles of water" has anything to do with the number of units being sold in New Zealand or Australia as transportation costs are fairly negligible compared to the price of an M3; that would seem to be more of a factor of the market size and specific product demand characteristics). For instance, my parents live in Istanbul and they just bought a Toyota. I looked over the documents, and they were taxed over 50% (and the Turkish currency has been fairly steady against the Euro for the past year two). Meaning, Toyota charged them about $20k, and the final price was well over $30k. This is despite the fact that Turkey is a member of the European free trade zone, so those are not import taxes or anything--just local vehicle sales taxes. I know for a fact that the same is true for many countries in Europe. For instance, my Danish friends complain about the same thing all the time--for about $20k, they could only get a 4-5 year old compact Ford wagon. Also, many countries have serious environmental penalties for large engines or inefficient cars in general--nothing like the marginal gas guzzler tax we have in the US. Finally, the export/import ratio is not the only variable that determines a currency's foreign exchange rate. There are other variables as well such as capital inflow.
Denmark is one of the few places that are worse than Norway!

There is also a political connection between car prices and the amount of industry related to cars in any one country. I.e. in Germany the car industry alone is huge, but you also have a lot of employees/taxpayers connected to this business through subcontracting and so forth, this makes it important for the government to ensure a steady growth, and one way to do this is avoid taxes.

Another example is Sweden. Although the cars there are not cheap, they still cost much less than in Norway. Sweden has Volvo, Saab etc and much lower taxes.
Besides some aluminium parts, Norway is not really that dependent on the car industry, this makes it easy for the politicians to use cars as a big fat milk cow. 100% + tax on new cars, road taxes, environmental taxes, tire taxes, fuel taxes + +

But, as was mentioned in another post, you also have to consider the "Big Mac" index, or people purchase power. Salaries in Norway are very high, and even though the comparative value of the M3 in Norway is high, it is not that much higher than for a guy in the US.
One crude way to look at this is to compare how many hours an average person in the US has to work in order to buy an M3, compared to an average Norwegian?

There are of course many other factors beside these, just wanted to air some ideas.
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