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Why Cars Are So Cheap In The US?  
User currently offlineF.pier From Italy, joined Aug 2000, 1523 posts, RR: 10
Posted (7 years 9 months 1 week 4 days 21 hours ago) and read 10781 times:

A BMW 3 series costs much less in the US than here,
On average you spend € 37.000 (about usd 47.000) for a 320 here.....

24 replies: All unread, jump to last
 
User currently offlineAerobalance From United States of America, joined Sep 2000, 4681 posts, RR: 47
Reply 1, posted (7 years 9 months 1 week 4 days 21 hours ago) and read 10784 times:

Yea, why is that?

"Good post Jim!",



"Sing a song, play guitar, make it snappy..."
User currently offlineDtwclipper From , joined Dec 1969, posts, RR:
Reply 2, posted (7 years 9 months 1 week 4 days 21 hours ago) and read 10777 times:

Quoting F.pier (Thread starter):
A BMW 3 series costs much less in the US than here,
On average you spend € 37.000 (about usd 47.000) for a 320 here.....

Taxes and Labour and Taxes!


User currently offlineAndesSMF From , joined Dec 1969, posts, RR:
Reply 3, posted (7 years 9 months 1 week 4 days 21 hours ago) and read 10762 times:

Quoting Dtwclipper (Reply 2):
Taxes and Labour and Taxes!

Plus you also have import fees, tariffs, and additional transportation costs for exportation.


User currently offlineDtwclipper From , joined Dec 1969, posts, RR:
Reply 4, posted (7 years 9 months 1 week 4 days 20 hours ago) and read 10755 times:

Quoting AndesSMF (Reply 3):
Plus you also have import fees, tariffs, and additional transportation costs for exportation.

Sorry, I meant that in Europe you pay higher taxes on your cars then we do here.

Also, your labour costs are higher.

Many "imports" are now built here, so we avoid most of the "Import Fees".


User currently offlineAndesSMF From , joined Dec 1969, posts, RR:
Reply 5, posted (7 years 9 months 1 week 4 days 20 hours ago) and read 10728 times:

Quoting Dtwclipper (Reply 4):

I understood the original intent of your post, so we are in agreement over this. Remember that also if the cars are imported, they tend to come from Canada or Mexico.


User currently offlineNeilYYZ From , joined Dec 1969, posts, RR:
Reply 6, posted (7 years 9 months 1 week 4 days 20 hours ago) and read 10719 times:

Quoting AndesSMF (Reply 5):
I understood the original intent of your post, so we are in agreement over this. Remember that also if the cars are imported, they tend to come from Canada or Mexico.

With GM/Ford killing all of our plants that might not be the case for long  Wink Although Toyota is making a ton of plants in Ontario.


User currently offlineSuperfly From Thailand, joined May 2000, 39659 posts, RR: 75
Reply 7, posted (7 years 9 months 1 week 4 days 20 hours ago) and read 10702 times:

Quoting NeilYYZ (Reply 6):
With GM/Ford killing all of our plants that might not be the case for long

The Saint Thomas plant in Ontario will increase production next year now that the Town Car will be produced out of that plant.



Bring back the Concorde
User currently onlineKlaus From Germany, joined Jul 2001, 21379 posts, RR: 54
Reply 8, posted (7 years 9 months 1 week 4 days 19 hours ago) and read 10665 times:

American prices are without sales tax, european prices are usually including VAT. Warranties are different, standard equipment vs. added features may differ and the markets are very different. American car manufacturers have already almost ruined themselves by undercutting each other, so price pressure is higher.

User currently offlineLTBEWR From United States of America, joined Jan 2004, 13004 posts, RR: 12
Reply 9, posted (7 years 9 months 1 week 4 days 19 hours ago) and read 10665 times:

There are number of reasons:
Purchase Taxes: Most countries may have National sales taxes of 12-30% on cars. In the USA, the prices you see for cars do not include State sales taxes which may be none to 8.5%, but even at 8.5%, a lot lower than most countries.
Competition and advertising: The large number of brands and models available including imports and Foreign brand cars made in the USA along with heavy price advertising encourages lower advertised and Suggested Retail prices.
Lower labor costs: Yes, USA based, unionized companies have tremendous retirement benefits costs that most companies outside the USA and Toyota, Nissan and others don't have within the USA (not UAW plants). We have much more labor flexibility than in the EC. BMW operates a non-union plant in South Carolina so 3-series models will have much lower labor costs than when made in Germany.
Lower component cots. We have more flexibility with outside suppliers of major and minor parts, and including their manufacturing in Mexico, Brazil, China, elsewhere in Asia so lower costs there.
Dealer competition: Within the USA, there is a lot of competition from dealer to dealer for each brand of dealers or of competing brands and models. Except for models in limited supply and high demand, almost all cars are sold below Suggested Retail prices, so lower costs as well. In the EC, you don't have as many dealers, less shopping around for price.


User currently offlineVC10BOAC From United States of America, joined Feb 2004, 402 posts, RR: 0
Reply 10, posted (7 years 9 months 1 week 3 days 21 hours ago) and read 10555 times:

Quoting F.pier (Thread starter):
A BMW 3 series costs much less in the US than here,
On average you spend € 37.000 (about usd 47.000) for a 320 here

I have wondered the same thing. My 2004 BMW 525i costs about the same as the 320 you mentioned, including taxes. Labor cannot be a factor since it was made in Germany

[Edited 2006-10-03 20:00:32]

User currently offline777DadandJr From United States of America, joined Feb 2005, 1516 posts, RR: 12
Reply 11, posted (7 years 9 months 1 week 3 days 20 hours ago) and read 10523 times:

Quoting LTBEWR (Reply 9):
BMW operates a non-union plant in South Carolina so 3-series models will have much lower labor costs than when made in Germany.

But the 3 series is not built in South Carolina. I believe that the Z3 was, now the Z4, and the X5 are built in SC.

Russ



My glass is neither 1/2 empty nor 1/2 full, rather, the glass itself is twice as big as it should be.
User currently offlineFalstaff From United States of America, joined Jun 2006, 6056 posts, RR: 29
Reply 12, posted (7 years 9 months 1 week 3 days 19 hours ago) and read 10518 times:
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Some states, like Missouri, have personal property tax that you pay every year on a car, motorcycle, boat etc. Also sales tax is due when you register the car even if your are making payments.

In other states, like Michigan and Ohio you can roll the taxes into the payment on the car. Then you pay a license fee based on the value (and sometimes weight) of the car.

On used cars you pay sales tax on the selling price, which I always lie about.



My mug slaketh over on Falstaff N503
User currently offlineCPDC10-30 From United Kingdom, joined Feb 2000, 4775 posts, RR: 24
Reply 13, posted (7 years 9 months 1 week 3 days 19 hours ago) and read 10500 times:

Quoting Klaus (Reply 8):
Warranties are different, standard equipment vs. added features may differ and the markets are very different.

As in the European warranties are much skimpier..at least they are in the UK. I've seen cars with 1 or 2 year warranties, in North America there are very few that don't give at least 3 years comprehensive and 5 years powertrain warranty.

However, it is true that for example ABS is standard on even small European cars whilst it remains optional in North America for the lower end models.

Although new cars are expensive, I find that used cars in the UK are quite a bit cheaper than in Canada...mostly because of the high fuel prices and road taxes that encourages newer, more efficient cars.


User currently offlineAerobalance From United States of America, joined Sep 2000, 4681 posts, RR: 47
Reply 14, posted (7 years 9 months 1 week 3 days 19 hours ago) and read 10484 times:

Quoting 777DadandJr (Reply 11):
But the 3 series is not built in South Carolina

Correct, my '06 330i was built in Munchen.



"Sing a song, play guitar, make it snappy..."
User currently offlineAdh214 From United States of America, joined Sep 1999, 358 posts, RR: 0
Reply 15, posted (7 years 9 months 1 week 3 days 17 hours ago) and read 10457 times:

You are on the wrong path talking labor costs, taxes, fees, etc.

Pricing of cars has little to do with what they cost to produce and everything to do with what the seller thinks they can get.

The net net of this is:

BMW does not think they can get $47,000 for a BMW 3 series in the US. Since very very few Germans will come to the US to buy a BMW, they can price differently in different markets.

Since, I was recently in the market for a car, believe me BMW would have a very hard time selling the 3 series for $47,000. We have too many other cars competing with it such as Lexus, Mercedes, Infiniti, Acura. All of these makers have similar cars available for between $30,000 and $40,000 that compete directly with the BMW 3 Series.

Andrew


User currently offlineDeltaGator From United States of America, joined Sep 2005, 6341 posts, RR: 13
Reply 16, posted (7 years 9 months 1 week 3 days 10 hours ago) and read 10400 times:

Along the same vein I have a question about the Honda Odyssey. I bought my wife one a month or so back and I got a 2006 for about $27,000 USD (no leather unfortunately.) The reason I ask is because I saw new Odyssey's in Australia and Singapore that were much smaller than ours (perhaps based on the Civic instead of the Accord like ours) and when I looked up the price in Singapore they were $100,000 SGD which is about $70,000 USD. What gives with that? Why the huge price differential for a smaller car with the same name?

Quoting 777DadandJr (Reply 11):
I believe that the Z3 was, now the Z4, and the X5 are built in SC.

You are correct. IIRC they are going to expand the plant even more and build a few more model lines there. As a side note the SC Highway Patrol got a bunch of unmarked 5 series as part of the incentive deal to bring BMW to the Upstate.



"If you can't delight in the misery of others then you don't deserve to be a college football fan."
User currently offlineCheckraiser From , joined Dec 1969, posts, RR:
Reply 17, posted (7 years 9 months 1 week 3 days 9 hours ago) and read 10394 times:

The price difference is insane. I bought a new Volvo S60 T5 in 03 and paid $30,850. The same car sold in the UK for a pinch under $50k.


Labor may not be as big of a driving force - but I think Europe's high taxes definately play a part.

Another reason to toss into the equation could be higher dealer costs. A dealer in Europe pays more for everything, from labor to land.

Competition is likely the biggest force at work though. As pointed out earlier, you're never going to sell a 3 series for $47k. While a lot of US/Canadian posters on this forum constantly blast American cars, the fact is their quality has improved drastically over the past five or ten years.


User currently offlineUTA_flyinghigh From Tunisia, joined Oct 2001, 6495 posts, RR: 51
Reply 18, posted (7 years 9 months 1 week 3 days 5 hours ago) and read 10356 times:

Quoting DeltaGator (Reply 16):
The reason I ask is because I saw new Odyssey's in Australia and Singapore that were much smaller than ours (perhaps based on the Civic instead of the Accord like ours) and when I looked up the price in Singapore they were $100,000 SGD which is about $70,000 USD. What gives with that? Why the huge price differential for a smaller car with the same name

Singapore is a bit of an exception in Asia, huge taxes are levied on personal transportation in order to promote mass transportation.

UTA  checkeredflag 



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User currently offlineLehpron From United States of America, joined exactly 13 years ago today! , 7028 posts, RR: 21
Reply 19, posted (7 years 9 months 1 week 2 days 20 hours ago) and read 10293 times:

Quoting F.pier (Thread starter):
Why Cars Are So Cheap In The US?

So people who cannot afford an education can still get a car.



The meaning of life is curiosity; we were put on this planet to explore opportunities.
User currently offlineFalcon84 From , joined Dec 1969, posts, RR:
Reply 20, posted (7 years 9 months 1 week 2 days 13 hours ago) and read 10236 times:

Nothing cheap about cars from my vantage point. I can't even afford a brand-new sub-compact these days, that run around $12-14,000 to start with.

User currently offline57AZ From United States of America, joined Nov 2004, 2550 posts, RR: 2
Reply 21, posted (7 years 9 months 1 week 2 days 6 hours ago) and read 10182 times:

Don't forget that many people do not consider the operating cost of the vehicle. Kind of like having an airplane-you have to add the cost of servicings, fuel and insurance to the purchase cost. Fuel doesn't vary significantly from location to location but the insurance does. Moved to Arizona from Tennessee and the insurance rates tripled. In Tennessee I could literally carry commercial vehicle insurance on THREE Jeep Cherokees with the premium payment I pay on my Jeep here. Of course, the risks here are different than in Tennessee-thus the extremely high premium.


"When a man runs on railroads over half of his lifetime he is fit for nothing else-and at times he don't know that."
User currently offlineKaiGywer From United States of America, joined Oct 2003, 12199 posts, RR: 35
Reply 22, posted (7 years 9 months 1 week 1 day 23 hours ago) and read 10140 times:
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Quoting Falcon84 (Reply 20):
Nothing cheap about cars from my vantage point. I can't even afford a brand-new sub-compact these days, that run around $12-14,000 to start with.

Chevrolet Aveo. Starting at $9800 Big grin



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User currently offlineJJJ From Spain, joined May 2006, 1754 posts, RR: 1
Reply 23, posted (7 years 9 months 1 week 1 day 21 hours ago) and read 10126 times:

Competition is the very first reason. Taxing should be the second.

However, to deal with the thin margins, many manufacturers offer in the US stripped down versions not available elsewhere, as well as cheaper interiors than those offered in Europe.

The last part is especially true of VW and most Japanese brands.

Quoting KaiGywer (Reply 22):
Chevrolet Aveo. Starting at $9800

Wait until you have the Renault Clio with the Nissan sticker Big grin


User currently offlineSovietjet From Bulgaria, joined Mar 2003, 2543 posts, RR: 17
Reply 24, posted (7 years 9 months 1 week 1 day 21 hours ago) and read 10124 times:
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My WRX costs $25k new here, yet in Bulgaria when I was there this summer it was about $55k, double the price.

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