[MikeTerp]

This topic is in the news today (could be put in almost any of the forums) but wanted to see what people think about how the strong dollar may affect future prices of BMWs in the USA? We have gone from around one Euro = $1.39 to about one Euro = $1.05 today. Many predictions show a continuing fall to where the Euro may only be worth about 85 to 90 cents within a year or so. While I am sure that many will say "nothing will change", this would be a good opportunity for U.S. dealers to put pressure on HQ to (at minimum) hold the line on prices or even slightly lower them in order to sell more cars vs. other competitors. Thoughts?

[spuntyb]

I would put 20" wheels, an ///M badge, and a carbon fiber front lip on the Euro. It's value will skyrocket. Plus it will go faster.

[squidlyboy]

Originally Posted by spuntyb

I would put 20" wheels, an ///M badge, and a carbon fiber front lip on the Euro. It's value will skyrocket. Plus it will go faster.

lol

Its quite shocking - i remember the days it was close to 2:1. Recently i purchased some parts from a European part site and thought something was wrong when i did the euro price conversion to usd and saw that it was about the same price. like wtf

[fecurtis]

Originally Posted by MikeTerp

This topic is in the news today (could be put in almost any of the forums) but wanted to see what people think about how the strong dollar may affect future prices of BMWs in the USA? We have gone from around one Euro = $1.39 to about one Euro = $1.05 today. Many predictions show a continuing fall to where the Euro may only be worth about 85 to 90 cents within a year or so. While I am sure that many will say "nothing will change", this would be a good opportunity for U.S. dealers to put pressure on HQ to (at minimum) hold the line on prices or even slightly lower them in order to sell more cars vs. other competitors. Thoughts?

Not likely, if its a long going trend you could see a slight decrease in prices.

Funny thing is, since this was a rather unexpected development, this could weaken economic growth in the US (short term anyway). Mainly through our already crappy trade deficit (less exports into the EU region, more imports)

And the euro will only likely continue to weaken vs the dollar, especially if (more like "when") the Fed decides to raise rates (expected to be this year), it'll only make the dollar stronger, all other factors equal.

From an automotive perspective, this isn't very great news for the likes of GM and Ford who are pushing into offering more models in Europe.

Quite a few economists saw this coming eventually. The European Central bank can't implement monetary policy as effectively as the Federal Reserve can and since some countries (Germany) are so much better off than others (Greece), this can make policy making difficult.

[G30 B58]

I remember going to Amsterdam a couple years ago and using the X2 math to get a USD estimate on my purchases.

[stormlv]

I'm paid in USD and I'm constantly checking the exchange rates
Yay for strong $$$

[ft1330]

Few years ago I moved a bunch of Euros states-side when the rate was 1.50. This was awesome. Now that the EUR is way down, I'm hoping that the European products I like to buy (food items especially) go down in price. But I'm not holding my breath.

Especially in the case of BMW. They've been tightening their belts for years due to the strong EUR. BMW prices are already super-low in the US compared to the rest of the world. And the strong EUR only made things worse for BMW. Now they'll be making some of that profit back. I would not expect the prices to go down 1 cent. And the strong sales support the current pricing.

[KneeDragr]

On the models BMW makes in the USA, no they wont see a price change. The reason they make them over here it mainly to shield themselves from currency shifts. Its possible on the ones made in Germany, but more likely is they just make more profit.

[sygazelle]

Originally Posted by spuntyb

I would put 20" wheels, an ///M badge, and a carbon fiber front lip on the Euro. It's value will skyrocket. Plus it will go faster.

Hilarious!

[Jamesons Viggen]

This has been great for my diecast car collecting where I make purchases from countries using the euro lol.

[M4LF]

BMW will make sure the price stays the same but ideally it should increase. How would people feel if a brand new BMW costing less than an older one. That would be a nightmare for the auto industry. However if the dollar do get much stronger they can always give it back in terms of rebates. But MSRP should always increase.

[F32Fleet]

Not likely because BMW still has expenses (Supply,Manufacturing) in dollar dominated areas of the world.

[Don N.]

Wow, did not know that the value of the euro had gone down that much already.

I also remember when it was double the value of the US dollar. I guess this will make taking a trip over to Europe a bit easier.

-Don

[vxb]

Euro/USD has never been over 1.5

[ft1330]

Originally Posted by vxb

Euro/USD has never been over 1.5

I think it's been to 1.6 at some point.

But never double for sure.

[300hp]

It's a good thing I had not made plans to travel to Spain until this year. Hopefully we can start trading at parity and this will make the trip way better. It's like a 30% discount

[pmc123]

heh, I started a similar thread in the pricing forum.

I doubt prices will be cut, but I'm hoping for some very nice incentives.

[FC4]

Originally Posted by mso4

BMW will make sure the price stays the same but ideally it should increase. How would people feel if a brand new BMW costing less than an older one. That would be a nightmare for the auto industry. However if the dollar do get much stronger they can always give it back in terms of rebates. But MSRP should always increase.

Care to explain how you think it's possible for a used BMW to cost more than a new one?

[M4LF]

Originally Posted by FC4

Care to explain how you think it's possible for a used BMW to cost more than a new one?

Let's say you buy a brand new BMW (manufactured in Germany) for $40k. Six months later a new body style comes out and you sell yours for 37k. Now if at that time the euro suddenly decreases 15% relative to the US dollar. Because of the new exchange rate the brand new $42k BMW might cost less than $35,700 (42,000x.85).

The above is only in theory and very highly unlikely that this would occur. In the past it's actually the opposite that occurred. In the 1990s as a result of a strong Yen, a lot of Japanese sports cars became super expensive in the US (think NSX, 300ZX, and Supra).

[nop]

The general rule is that prices never go down unless they have spiked temporarily. If you were willing to pay $50k for a car last year, you're still willing to pay the same for a car this year. They will gladly take the windfall from the conversion. If they think the strong dollar will last, they are less likely to raise prices on next year's models and eventually let inflation eat up the difference, but that's a dangerous game. If the exchange rate goes the other way suddenly they are in a situation where they have to do a big price bump and that makes people very unhappy.

[optimaxed]

They can and most probably hedge a significant amount and therefore may have locked in a rate of say 1.20 and therefore will not be making as big a gain as you think