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      04-25-2011, 07:09 AM   #54
Eau Rouge
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Drives: 2012 E92 M3
Join Date: Jul 2008
Location: Florida's Emerald Coast

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2012 BMW E92 M3  [4.50]
Originally Posted by Dante View Post
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:

You make my point for me -- Those in Germany can own an M3 for a relatively cheap price compared to most others in the world. What's with the complaining?

I agree that currency is a factor, but Germany is not a country which would be a "typical" country to single out as a fine representative of the countries which are "subsidizing" the relatively low price that individuals in the USA are expected to pay for an M3. However, you've used Germany as an example, and even though import duties are not applicable to M3's let's proceed. Does it seem normal that individuals living in the country where a particular vehicle is being produced (e.g. BMW M3) should be expected to pay more than individuals living in another country are expected to pay for the same vehicle? If so, what it the logic? If not, why not?

AFAIK, BMW does not have factories in most countries in which it sells cars. It does have a production in Spartanburg, SC, and having the option to route dollars derived doing business in the USA through its stateside facilities rather than convert the dollars to euros or some other currency gives BMW some currency flexibility in the USA that doesn't have in most countries of the world.

At the end of the day, the customer will have to pay the applicable taxes to drive away with the car. The currency rate aspect is a pricing factor, but what matters to a potential buyer is out-the-door-price, and that includes VAT, gas guzzler tax, VRT, etc.., That is what drives the great price variance for the M3 about the globe, not currency factoring, and talking about this group or that group having to subsidize another group just has a ring of sour grapes about it.