[Magi_young]

Hi, I am new here, and I am current working in Germany, I've got a 2008 BMW 320D with 110000 KMs on it, and it costs me 20000 Euros, the dealer tells me a new car of that type will cost around 50000-55000 Euros. which is around 70000 Dollars. In the US, you could easily afford a fully loaded M3 by that price. Can anyone give a reasonable explanation of how come we have such a huge gap on the prices between 2 countries? It is a German car for God sake!

One of my German colleagues told me that it is because in Germany, they have autobahn which require better designed materials such as brakes and suspensions to handle 240 KMs/H speed, I do realise there's a different standard on the cars which were made for the US markets but I don't really believe that they are sending cars with lower quality standard to US. Does anyone has any clue here?

[vat51]

It has a lot to do with Taxes on the top of price. It is the same way in south korea. For the States those Korean car is way cheaper, but in Korea it is around 20% higher for the same model and make. If you are in Germany working under Canada or US Military, you would pay the invoice price of stateside price.

[Magi_young]

Probably you are right, the only possible reason could be the tax, unfortunately I am not working under any kind of US force, actually I am a Chinese working in a German Branch of Chinese company

[Wild Squid]

So what is he saying that BMWs in Germany are better than our BMW's in the US? I would hope not and its just a tax difference.

[Magi_young]

From what I was told (nothing against anyone, just open discussion), it looks like the Germans are using different standard of materials on cars which are manufactured to US market to save the costs because in the US market, the competition is severe, the japanese and Korean cars are much more popular in US than in Europe. In Germany, people drive at more than 200km/h quite often, therefore they demand higher stability and reliability on materials.

[username604]

Originally Posted by Magi_young

From what I was told (nothing against anyone, just open discussion), it looks like the Germans are using different standard of materials on cars which are manufactured to US market to save the costs because in the US market, the competition is severe, the japanese and Korean cars are much more popular in US than in Europe. In Germany, people drive at more than 200km/h quite often, therefore they demand higher stability and reliability on materials.

False

[Kolyan2k]

Originally Posted by davidkneiber

False

I am pretty sure it is false

[Saintor]

It is all about marketing.

BMW will screw you Germans [read: Europeans] (and us Canadians) because they can.

BMW will not screw Americans because they can't.

The real reasons are more complicated and were established decades ago. Bottom line is that Europeans accept to spend more for transportation or the same for much less car than Americans.

[johnbuz]

Its also not fair to compare the cost in dollars in both countries. $1 in US is going to buy you more than $1 or 0.75 Euro in Europe. If you compare the price in US in dollars to the price in Europe in dollars its not even close.

How about land, or food? Preferably something thats not subsidized. I just looked it up, 1 doz eggs in Germany cost 2.07 Euro or $2.60. In US, eggs cost $1.25. I would say most things cost more in Germany as they don't have nearly as much land to produce from or resources to produce with, every after taking into account for taxes, which are higher in Europe. Another thing, if we in US domestically produced our goods, they would be more expensive than they are now, as they are made in China. The cost of lots of things trickles up and down. Cars not as much as some items, but there is still an effect.

[rgbimmer]

Originally Posted by johnbuz

Its also not fair to compare the cost in dollars in both countries. $1 in US is going to buy you more than $1 or 0.75 Euro in Europe. If you compare the price in US in dollars to the price in Europe in dollars its not even close.

How about land, or food? Preferably something thats not subsidized. I just looked it up, 1 doz eggs in Germany cost 2.07 Euro or $2.60. In US, eggs cost $1.25. I would say most things cost more in Germany as they don't have nearly as much land to produce from or resources to produce with, every after taking into account for taxes, which are higher in Europe. Another thing, if we in US domestically produced our goods, they would be more expensive than they are now, as they are made in China. The cost of lots of things trickles up and down. Cars not as much as some items, but there is still an effect.

$1.25 for a dozen eggs? I don't think so

[krhodes1]

I find it HIGHLY amusing that BMW only sells the three fastest models of 3-series (M3, 335i, 335D) in the US plus a slightly detuned version of the fourth fastest (330i detuned to 328i). This in a country where the highest speed limit is a whopping 85mph on a couple hundred miles of ass-end of nowhere West Texas highway. My 70hp Spitfire will do 85mph all day long.

But as to material differences, uh, no. The cars are all made on the same assembly lines out of the same parts (with VERY minor detail differences), no matter the market they are destined for.

The difference is taxes, because they can, and the fact that the US market is incredibly competitive in the 3-series market segment. If the Japanese did as well in Europe as they do here BMWs would be cheaper there too. But it is mostly taxes. Plus our prices do not include taxes - in my state that added another 7.5% on top the first year. Many states are higher than that. Real money on a $50K 335i.

We do get these cars for bargain prices compared to most of the rest of the world though, especially as our standard equipment levels are usually MUCH higher.

[RaihaX]

Nothing new I suppose we all know the US gets ridiculously cheap car. $100kish USD for 335i over here

[FI]

International economics. Supply and demand. Economies of scale. Etc.

[MCoupeInsanity]

Originally Posted by FI

International economics. Supply and demand. Economies of scale. Etc.

Not to mention, quantitative easing. Phillips' curves. Market baskets. Purchasing Power Parity. GDP per capita. C + I + G = (X-M). And probably some other shit.

[ZZZZ]

market dictates price. they will charge as much as people are willing to pay.

As far as I know, current BMW models use the same materials/are produced by the same factories in both North America and Germany. However, this was not always the case. For example, the e36 BMW was a very different animal in the US market compared to Germany. A lot of the quality was lost to compete in the American market.

i.e. US market lost projector lights, they were all plastic cover halogens instead of glass lenses. the headlight-levelling feature was not available. no light under the hood. coupes did not have rear window glass that could be opened, etc.) Not to mention our M3 used a stroked 328i engine instead of the real M3 engine.

[BEAR-AvHistory]

In the UK it’s the VAT, value added tax. When I lived there I had a Jaguar that cost the same in pounds sterling in the UK as it did in dollars in the US. At the time the ratio was 1 pound was equal to $1.85.

[Blubaron79]

It's the Value Added Tax. Adds about 20% to the cost of products. It's so people can't hide from taxes like they do there in the US..

[GB///M]

Well as biff tannen once said, "I just wanna say one thing, god bless america" lol

[E9TOU]

Main reason is Germany's MwsT (similar to VAT in the UK). A lot of things sold in Germany already have mwst (tax) factored in the purchase price, whereas in the states, taxes aren't calculated until after the purchase price is determined. Germany's tax rate is at 19% and that's way higher than anything in the states. Also, even though Germans pay more than Americans, they're typically paid more as well -- in the end, the inherent cost of purchasing a car is almost the same.

You can't think of purchase prices as a straight conversion from EUR to USD, there are many factors that contribute to the prices difference (and not just what I mentioned above).

[E90PAT]

Originally Posted by MCoupeInsanity

Not to mention, quantitative easing. Phillips' curves. Market baskets. Purchasing Power Parity. GDP per capita. C + I + G = (X-M). And probably some other shit.

lol someone is currently in school...

[bimmer_335]

Originally Posted by Magi_young

Hi, I am new here, and I am current working in Germany, I've got a 2008 BMW 320D with 110000 KMs on it, and it costs me 20000 Euros, the dealer tells me a new car of that type will cost around 50000-55000 Euros. which is around 70000 Dollars. In the US, you could easily afford a fully loaded M3 by that price. Can anyone give a reasonable explanation of how come we have such a huge gap on the prices between 2 countries? It is a German car for God sake!

One of my German colleagues told me that it is because in Germany, they have autobahn which require better designed materials such as brakes and suspensions to handle 240 KMs/H speed, I do realise there's a different standard on the cars which were made for the US markets but I don't really believe that they are sending cars with lower quality standard to US. Does anyone has any clue here?

alternatively you could have asked why mcdonalds meal costs $9 in germany. It has nothing to do with the car itself... and i'm brain dead to explain right now...

[project6]

And how are the petrol prices in Germany nowadays?