Evropski automobili jeftiniji u USA nego u Evropi

[dragvorl]

Naisao sam na interesantan tekst pa sam mislio da podelim sa vama i da se prodiskutuje na temu.

There are a number of reasons for this and you have alluded to at least one, so let’s start with that.

1) Local Pricing:
Taxes in places like Germany and the U.K are usually listed as part of the headline price which amounts to a hefty 20%. This goes some way to explaining the differential although not all the way and as you have said you still notice a differential after this has been taken into account. BMWs are still cheaper in America than even Canada.

2) Supply and Demand:
Up until recently the USA was the largest market for BMW, Mercedes and Porsche so one could suggest that as there is more demand in the U.S it can take advantage of a certain amount of 'volume pricing'. I think this is true to a certain extent but perhaps better explained in the other points below.

3) Competition:
The U.S premium market is very competitive, far more so than in Europe. I should provide some context here for clarity’s sake. Competition between the German makers is very cutthroat but outside of them in Europe there is no real competition. The Germans have had this market sewn up for many, many years. Lexus, Jaguar, perhaps the occasional high end Citroen and Alfa Romeo all pails into insignificance when compared to numbers posted by BMW, Mercedes and Audi. In the USA you have Cadillac, Lincoln, Buick and Acura as well as sales of Lexus and Infiniti models that Nissan and Toyota could only dream of for Europe. Yes, American consumers still see the Germans as slightly more premium but also see many alternatives that are pretty decent. Ford and GM long abandoned this space in Europe when they saw that consumers would rather have a poverty spec 3 Series than a high end Ford Scorpio or Opel Omega. They tried to get around this by buying SAAB, Jaguar, Volvo and Aston but failed epically.

Over the last 15 years the Germans have basically subsidized the American market to a certain extent to gain a foothold. Up until very recently BMW lost money on every lease car to compete in North America and even the base unit price on vehicles sold was heavily discounted. This has changed as they have gained momentum and prices have recently risen with every new model, do not expect this to change as you see the same here as you did in Europe but to a lesser extent. The Europeans will continue to eat away at domestic competition capturing greater market share. GM, Ford and Chrysler (with defeatist schemes like employee pricing) will race to the bottom as price is the only place they can compete. However, this comes with a big penalty as specification and quality of materials is sacrificed to meet margins a greater gulf will emerge between the two countries products.

To sum up the Germans have to be very aggressive on price to build volumes but will not do so forever. As the domestic brands become less competitive (in product not price) market share will fall and those left standing can still charge a premium. The Japanese trio is the only wrench in the works here; however they too are in a race to the bottom in terms of pricing. It is no coincidence that all three are planning to or have launched uber expensive halo models (Lexus LF-A, Acura NSX, Infiniti Essence) to try and reinforce the fact that they are a viable sporting alternative to the Germans with the same engineering integrity.

4) Home Market Legacy:
Traditionally a car maker’s strongest market is their home one. A good example is that of the British, French, U.S and Italian car companies which all relied on (took advantage of) faithful domestic consumption to fuel production, even when the product was poor. In come the Japanese and Koreans delivering a decent product at last and these older companies were decimated. In Europe, BMW, Audi and Mercedes have spent literally decades positioning themselves as premium manufacturers to warrant that premium price. Markets outside of Europe were a welcome distraction but only in the last 25 years has there really been a sharp focus on this. Playing catch up in the US to cement the brand and reputation has been hard (especially with Lexus, Infiniti and Acura chasing the same goal) and cannot happen without Americans physically behind the wheel of the product. In Europe everyone gets the message, if you want a German car you have to pay more than the equivalent Peugeot, Citroen, Vauxhall or Ford but they’re ‘premium’ so it doesn’t matter. That thinking is not as common as they would like it to be in the U.S but it is getting there.

5) Specification:
Very often specifications are different like for like so that BMW doesn’t sell the farm on its newest Seven. Cars in the factory are built ‘U.S spec’ which sometimes means less standard toys and in extreme cases less than premium plastics and even less salubrious leather, wheels or even tires. VW are great at this and a good example was them selling the less than impressive mark IV Golf long after it had retired in Europe. VW want to be seen as ‘premium’ but not too ‘premium. As I said above a few manufacturers effectively subsidized their cars to get a foothold here including VW. However, with their Passat even they could not carry this on and as a result their newest model is U.S only. They launched a separate Europe only model around the same time and they look quite similar but the European version has better suspension, completely different dash design and far better plastics, leather and other materials (I have driven both). The US Passat is bigger and if you ask VW that is the reason why they say a US only model was necessary. Hear that USA, you should count yourselves lucky you’re getting a bigger car than the Europeans here! The brutal truth is these changes have been made so they can sell this car for old Passat money but at vastly reduced production costs. A case of perceived premium rather than simply premium?

6) Branding:
The German’s are great at taking a fairly average vehicle with a premium ‘feel’ and selling it with a fat profit margin. BMW has done it with the new Mini. Originally only three doors, smaller than most of its rivals, not as practical but sold by the bucket load at a premium price (perhaps they learnt lessons from buying MG Rover). Until recently Porsche was the most profitable manufacturer in the world, even more so than Toyota. This tiny, tiny producer had fatter profit margins than pretty much any other company on the planet, I always think of Porsche as the Apple of the car world even before Apple resurgence.

Volkswagen (meaning people’s car) also did it with the updated Beetle. A pretty horrid car with cheapo torsion beam suspension based on a Golf which not only performed better but was more practical and in my view looked better. However a premium was paid for the Beetle.

These German brands are rock solid in terms of positioning in Europe and the car companies know they can charge more. As with every product if the market will tolerate the price then you charge that price. It also doesn’t help that rarely do consumers compare prices they are paying in Germany or the UK with those in the US.

http://www.quora.com/Why-are-German-car ... -in-the-US