BMW M5 US pricing

[rks838]

In the UK, the M5 starts at $61,xxx. That translates to a $111,000 base price in the US. WOW! Hopefully Audi will not follow BMW and price its next RS6 that high. I know exchance rates are bad, though...

[M&M]

That's a very clever way of working it out. Take the UK price & convert it to dollars. Why didn't I think of that. So that means the RS4 will be $95000 in the US using your technique.

[Nordschleife]

The procedure to convert prices is as follows:

Work with German prices, do not take the UK price, as the UK is such a well healed car market, all manufacturers get away with over charging there and attribute the excess to RHD

Go to the manufacturer's configurator and price up a car with all the accessories that are shipped with US versions.

Then take the quoted German domestic price remove the Sales Tax, called MwSt. in Germany. Currently this is 16%, to do this, divide the price of the car with accessories by 1.16.

Now, take this price in Euros and convert it to $US and you have the raw US price.

The raw price has to be adjusted to account for the additional US warranty and service costs, the cost of federalisation and testing, and addition of US specific add-ons.

None of these adjustments 'add up' when you compare the calculated price to the actual price in the US, and its not in the dealer margins. The manufacturer actually supplies cars to the US market cheaper than to other markets.

This has significance, Porsche, the German car maker most dependent on the US market, makes more money out of financial transactions in the Foreign Exchange market than it does out of manufacturing cars, in deed some analysts think currency hedging accounts for the company's entire gross profit.

The manufacturers can afford to sell cars at a discount, but they are not going to add many bells and whistles when they do so. Reviewing costs for a specialist supercar manufacturer the other day I noted that variable costs per car are 30% of the ex-factory price.

R+C

[bludnik]

Originally posted by rks838
In the UK, the M5 starts at $61,xxx. That translates to a $111,000 base price in the US. WOW!

boo friggedy hoo... the M5 is like $220 000 in Norway... we're talking Ferrari-money... :eek: :eek: :eek: :( :eye:

[Klint]

Originally posted by Nordschleife
The procedure to convert prices is as follows:

Work with German prices, do not take the UK price, as the UK is such a well healed car market, all manufacturers get away with over charging there and attribute the excess to RHD

Go to the manufacturer's configurator and price up a car with all the accessories that are shipped with US versions.

Then take the quoted German domestic price remove the Sales Tax, called MwSt. in Germany. Currently this is 16%, to do this, divide the price of the car with accessories by 1.16.

Now, take this price in Euros and convert it to $US and you have the raw US price.

The raw price has to be adjusted to account for the additional US warranty and service costs, the cost of federalisation and testing, and addition of US specific add-ons.

None of these adjustments 'add up' when you compare the calculated price to the actual price in the US, and its not in the dealer margins. The manufacturer actually supplies cars to the US market cheaper than to other markets.

This has significance, Porsche, the German car maker most dependent on the US market, makes more money out of financial transactions in the Foreign Exchange market than it does out of manufacturing cars, in deed some analysts think currency hedging accounts for the company's entire gross profit.

The manufacturers can afford to sell cars at a discount, but they are not going to add many bells and whistles when they do so. Reviewing costs for a specialist supercar manufacturer the other day I noted that variable costs per car are 30% of the ex-factory price.

R+C

Robin,

Great information as always! This post makes a good read. :thumb:

[rks838]

thanks, nord - as you now know, I'm not to knowledgeable with that