Quote:
Originally Posted by Sick Speed
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.
SS
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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.