[F32Fleet]

Originally Posted by Kenny@JleviSW

BMW had no choice really as the expenses were increasing so they had to increase prices accordingly. I mean it really is not their fault that the economy is the way it is. They know they had to do something to move cars so they're offering the low finance rates. I mean there really is nothing any of us can do except for switching to other brands as prices would always increase.

I'm beginning to re-think that. Sure 12 mo's ago the Euro was at an all time high, but the gap has shrunk. BMW also stated that higher raw material costs were another reason for price increase, yet with the global recession the cost of raw materials and steel in particular has fallen through the floor. Oil is currently trading < $70/bl. My feeling is that although the above factors play a part in the price increases, the overriding reasons are: #1 to preserve residual values on leased vehicles, #2 a re-emphasis on luxury (ie high price). I read about 6 mo's ago that the new CEO of BMWNA is from the UK, and one of his goals was to bring exclusivity(sp?) back to the brand.

[VIZSLA]

Originally Posted by John 070

Exactly, about 20% since August. So not only are 2k9 models quite a bit more expensive, but when you factor in buying them with USD, the overall increase in payment to BMW is quite substantial.

Bear in mind that BMW like all multi nationals hedges their currency. Their dollar costs today reflect moves made in earlier market situations. Anyone here prepay their winter heating fuel bills at this summer's rates anticipating 200$/bbl oil?.

[KCWolfPck]

Originally Posted by PaCman328

what the hell? thats like 5-series prices

Perhaps, but I'd rather have a fully loaded 3 series convertible than a 5 series sedan.

[cycler]

I have heard different points on why the costs of BMW's have gone up from the Euro to the dollar to raw materials. Everyone has their own points on all this. Some of you are calling one another snobs. Others are saying they can afford a bmw while other are saying its to expensive.

But the bottom line is this. BMW is a company that is trying to make money. They are not our friends. No car company is our friend. Everyone car company is only our friend if and only if we purchase their products. The moment we stop they look elsewhere. The way they look at it is like this. They will keep increasing prices until they feel their sales havent met their goals. And once that happens the price increases will cease until sales have caught up and people get used to the pricing. Once that happens its time to increas again. That was just my opinion. And not a definate fact.

[GregL]

I was surprised to see that a fully loaded 335xi here in Canada is cheaper for MY2009 than it was for MY2008, $4k-$5k worth which is tremendous. However, as was mentioned earlier, your pricing in the US is still more affordable than anywhere else in the world even now.

[BMW F22]

Originally Posted by Socom

I'm beginning to re-think that. Sure 12 mo's ago the Euro was at an all time high, but the gap has shrunk. BMW also stated that higher raw material costs were another reason for price increase, yet with the global recession the cost of raw materials and steel in particular has fallen through the floor. Oil is currently trading < $70/bl. My feeling is that although the above factors play a part in the price increases, the overriding reasons are: #1 to preserve residual values on leased vehicles, #2 a re-emphasis on luxury (ie high price). I read about 6 mo's ago that the new CEO of BMWNA is from the UK, and one of his goals was to bring exclusivity(sp?) back to the brand.

If what you said is true then it's not as simple as increasing costs will cause a price hike. Thus I agree with the points you made above. What I don't understand is why not keep the price the same (or don't increase it so much) but just lower the residual value. It works out to be about the same IMO as people would still pay more. I think that the reason being that the US went into a recession before any of the European nations so the costs were on the rise; pricing for the new models was also announced. It was only recently that those nations are beginning to feel the effects but they can't really go back and change the price.

Also, perhaps it's not the cost of materials but the rise in value of other currencies compared to the Euro.

[Yoshii]

wow...good thing i got my 2008 335...hehehe...i saved some money on it and i have all the goodies...

[cda888]

Originally Posted by GregL

I was surprised to see that a fully loaded 335xi here in Canada is cheaper for MY2009 than it was for MY2008, $4k-$5k worth which is tremendous. However, as was mentioned earlier, your pricing in the US is still more affordable than anywhere else in the world even now.

This is the kind of statement I was talking about earlier. It is inaccurate to compare the base price across countries and claim that the car is "more expensive" in one country than another. Rather, you have to consider each market and the purchasing power of the median consumer with that market's native currrency.

Average median income in Candada is about $53k candadian. In the US it is approximately $44k. So BMWs in Canada have a higher base price, to compensate for the buying power of Candadians.

What BMW does in every market is to determine the maximum price the market will bear, which is a function of the portion of a consumer's income or buying power the consumer is willing to give up for the car. So the "price" in each market will be different because the value and buying power of the native currency is different in each market.

So BMWs aren't really "more expensive" in Canada than in the US, notwithstanding that the raw base price in Canadian dollars is higher than the raw base price in the US of US dollars. If that analogy were true, then BMWs would be extremely cheap in Germany because they cost less Euros. And as I explained earlier, you can't convert currency to Euros to determine the "cost" to the consumer in any given market.

Bottom line: BMWs are about as expensive in each country vis-a-vis other cars and products.

[VIZSLA]

Originally Posted by cda888

This is the kind of statement I was talking about earlier. It is inaccurate to compare the base price across countries and claim that the car is "more expensive" in one country than another. Rather, you have to consider each market and the purchasing power of the median consumer with that market's native currrency.

Average median income in Candada is about $53k candadian. In the US it is approximately $44k. So BMWs in Canada have a higher base price, to compensate for the buying power of Candadians.

What BMW does in every market is to determine the maximum price the market will bear, which is a function of the portion of a consumer's income or buying power the consumer is willing to give up for the car. So the "price" in each market will be different because the value and buying power of the native currency is different in each market.

So BMWs aren't really "more expensive" in Canada than in the US, notwithstanding that the raw base price in Canadian dollars is higher than the raw base price in the US of US dollars. If that analogy were true, then BMWs would be extremely cheap in Germany because they cost less Euros. And as I explained earlier, you can't convert currency to Euros to determine the "cost" to the consumer in any given market.

Bottom line: BMWs are about as expensive in each country vis-a-vis other cars and products.

In that currencies have values relative one another one can of course compare prices across geographical markets. The fact that a marketer determines different prices for different markets is not relevant. The 'cost' to an individual consumer depends on many factors unique to each transaction and again is not a consideration in terms of price comparisons.
In short the terms price and cost are not the same.

[Park2670]

Very good info ITT. I was always under the assumption like everybody else that we got good deals. I didnt even think about the exchange rates and the other countries paying with their currency. Thanks for the lesson cda888

[cda888]

Originally Posted by VIZSLA

In that currencies have values relative one another one can of course compare prices across geographical markets. The fact that a marketer determines different prices for different markets is not relevant. The 'cost' to an individual consumer depends on many factors unique to each transaction and again is not a consideration in terms of price comparisons.
In short the terms price and cost are not the same.

I think I understand what you are saying, and I don't disagree that prices can vary across markets. My point is that it is far too simplistic to say that because 35k in Euros may be the equivalent of $70k in dollars, Americans are getting a steal when they buy a BMW for $50k in dollars because exchange rates are irrelevant to purchasers in each country. What is relevant is what the price of the car represents vis-a-vis the salaries consumers earn (and the currency in which they are paid) for comparable work or services in each country.

A quick analogy is the cost of living analysis people frequently employ in deciding whether it is worth it to take that new job. Starting at $150k in New York sounds like a fantastic salary to the guy who is living in Dallas until he goes to look at apartments in New York, and realizes that half of his $150k is going to go towards housing. Suddenly, $100k in Dallas, where housing only consumes $25k per year, seems like the much better deal.

The same is true with BMWs. A Doctor in Munich making $100k Euros may part with one third (33k) of that for a BMW. A doctor in L.A. making $150k may also be willing to part with one third of his salary (50k) for a BMW. When the dollar is weak, BMW may make less off of the sale to the doctor in L.A., but the car does not seem any "cheaper" to the L.A. doctor than it does to the Munich doctor. The Munich doctor has parted with the same percentage of his buying power to obtain a BMW as the L.A. doctor has.

Incidentally, this is the reason why BMW opened the Spartanburg facility. By buying parts and labor in the US in Dollars instead of Euros, it avoids the losses created by the dollar's weakness in Europe. If all of the BMWs sold in the US were manufactured in the US, prices would probably come down and BMW would earn much higher profits on US sales.

[ianbiz]

I thought the 3er was the 'average joe's" car?

[barbados]

Originally Posted by ianbiz

I thought the 3er was the 'average joe's" car?

Nope, it's the 'average joe that is living beyond his means' car

[VIZSLA]

Originally Posted by skibbs

Nope, it's the 'average joe that is living beyond his means' car

Joe the plumber