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View Full Version : Headline: Profit Hurt, BMW Diverts Cars From U.S.


Balthazar_B
04-30-2008, 06:57 PM
In the WSJ:

http://online.wsj.com/article/SB120945134910152293.html (requires subscription)

Hasn't been the best of times for BMW...

Adi
05-01-2008, 08:03 AM
Not specific to BMW. Hard times for anyone selling product in US$ with (most of) their costs being in another currency, especially Euros.

AzNMpower32
05-01-2008, 08:49 AM
Yea, a lot of European manufacturers are being hurt by the depreciating USD. That's why BMW is hedging by manufacturing more heavy-demand models in the US, such as the X6 and the next generation X3.

BMW ought to just raise its prices to readjust with more current exchange rates. With a $40.000 335i sedan, changing that into Euros at the current rate is a mere ***8364;25.881,59. For comparison, a 335i sedan in Germany starts at ***8364;41.300. Even if you take out the 19% VAT, that's still ***8364;33.500 base. That's also before automatic climate, cupholders, and electric seats. I think a fair US base price would be $46.000 for the 335i sedan

nealh
05-01-2008, 09:12 AM
Yea, a lot of European manufacturers are being hurt by the depreciating USD. That's why BMW is hedging by manufacturing more heavy-demand models in the US, such as the X6 and the next generation X3.

BMW ought to just raise its prices to readjust with more current exchange rates. With a $40.000 335i sedan, changing that into Euros at the current rate is a mere 25.881,59. For comparison, a 335i sedan in Germany starts at 41.300. Even if you take out the 19% VAT, that's still 33.500 base. That's also before automatic climate, cupholders, and electric seats. I think a fair US base price would be $46.000 for the 335i sedan
Good LucK selling a 3 series for a base of $46000...335 or not

Balthazar_B
05-01-2008, 05:39 PM
Good LucK selling a 3 series for a base of $46000...335 or not


...in the teeth of a recession. A bunch of BMW salespeople will join the mortgage brokers and real estate agents in the unemployment line...

AzNMpower32
05-01-2008, 05:44 PM
It makes room for a 4 cyl BMW :p. Yea, I know Americans would never tolerate a realistically-priced European car. I dunno what direction BMW is headed in thesedays..........they're trying to sell a lot of cars (like Toyota/other mainstream brands) by keeping prices low, but at the same time, they're making little if any money on the cars they sell. It's like Nordstrom trying to lure customers by cutting all their prices in half but losing money in the process. There's lots of fine details that go into car selling, but sometimes I really wonder what BMW's goal is.

Unagi1
05-01-2008, 06:51 PM
Kind of a mixed bag: The drop in profit was due to "a provision of 236 million euros taken to protect the company from the risk of default" -- essentially a hedge, but it's a one-time hit. Sales were up 9.6% in April, and they expect to exceed targets throughout the year, just not in the US of course. Link to Marketwatch article: http://www.marketwatch.com/news/story/bmws-profit-down-17-financial/story.aspx?guid=%7B1AEA9175%2D3F73%2D44DA%2D8959%2 DA8296A000336%7D&dist=msr_1&referer=sphere_related_content&referer=sphere_related_content


Worldwide, they'll be fine.

TX Buzzard
05-02-2008, 06:13 AM
The US is BMW's largestest market. In the US they are looking at profits based on volume. If other countries could keep up I am sure pricing would be comparable. Perhaps instead of concerning yourself with US prices you ought to aim your suggestions towards BMW for trying to keep their profit margins in all market segments.

DSXMachina
05-02-2008, 06:59 AM
The US is BMW's largestest market. In the US they are looking at profits based on volume. If other countries could keep up I am sure pricing would be comparable. Perhaps instead of concerning yourself with US prices you ought to aim your suggestions towards BMW for trying to keep their profit margins in all market segments.

Could you further elaborate on what you mean by this sentence?

Unagi1
05-02-2008, 12:03 PM
:dunno:

valeram
05-02-2008, 01:01 PM
That is the main reason why I cannot wait for an MY2009 It is possible that they might increase the price more than the normal yearly increase to compensate for lower $US.