BMW to go front-drive

[MX793]

It was never going to do well in the US though, given Americans' dislike of small cars.

It would have sold a lot better if it was less money.  It's true that Americans generally equate bigger with better (or "worth more", at the very least).  But the 1 series was priced within 5% of a comparable 3 series.  Basically, a shopper would look at the 1 series, and then notice that for $1500 more (a few dollars more a month in payments), they could step into a "better" 3 series.

[the Teuton]

It was never going to do well in the US though, given Americans' dislike of small cars.

It wouldn't have sold like the 3er, but at $30k when the bigger 3er starts at $33k, that doesn't leave much room. On top of that, we only get the two-door 1er models with the trunk.

No hatch, no 4-doors, no smaller engines, no price gap large enough to make people consider the 1er. Come on, for an extra $20/month on a car payment, I'd probably pick the 3 Series over the 1er, too.

[omicron]

Yes, that US pricing strategy of theirs is ridiculous. At least here there's a proper gap, albeit stupidly inflated by that horrid luxury car tax of ours. $45,500 buys you an automatic 120i hatch, whereas an extra $9k is required to step into a 320i. The difference is even more prominent at the top-end - $74,700 for a 135i versus $107,800 for a 335i.

[the Teuton]

Yes, that US pricing strategy of theirs is ridiculous. At least here there's a proper gap, albeit stupidly inflated by that horrid luxury car tax of ours. $45,500 buys you an automatic 120i hatch, whereas an extra $9k is required to step into a 320i. The difference is even more prominent at the top-end - $74,700 for a 135i versus $107,800 for a 335i.

The 135i starts at $36k here, while the 335i starts at $41k. It's still not that big of a difference here.

[omicron]

The 135i starts at $36k here, while the 335i starts at $41k. It's still not that big of a difference here.

Get a sharp deal on a demonstrator 335i or find a babied CPO example, and there's hardly reason at all to consider the 1.

[the Teuton]

Get a sharp deal on a demonstrator 335i or find a babied CPO example, and there's hardly reason at all to consider the 1.

Pretty much. The 1er is a much smaller car than the 3 in the real world. I can't see why BMW planned it like they did. At least they should have given us a 125i or something similar starting at about $25k. The way they planned the lineup with the same two engines and very similar prices to the 3 is almost setting the car up for failure, especially since financing (the choice way of paying for cars in the US) would likely put the car payments within $50/month of one another.

[MexicoCityM3]

Here a 120i hatch is 24.2K with current discounts. The closest 3 is a 325i at 32.9K. Now that I look at it, not much of a gap considering the larger engine and body. But still the 1 series sells a lot in Mexico (the hatch).

[Madman]

It is absolutely ridiculous that the BASE 1 Series in America is powered by a 3.0 litre six cylinder engine!  Why?  There is no reason whatsoever for BMW not to offer a 120i over here.  Also, BMW only sells the coupe and cabrio versions over here and there is a pretty limited market for two-door cars.

Note to BMW: try offering us the five-door with more realistic engine choices and maybe we'd buy the damn things!




Madman of the People

[2o6]

It is absolutely ridiculous that the BASE 1 Series in America is powered by a 3.0 litre six cylinder engine!  Why?  There is no reason whatsoever for BMW not to offer a 120i over here.  Also, BMW only sells the coupe and cabrio versions over here and there is a pretty limited market for two-door cars.

Note to BMW: try offering us the five-door with more realistic engine choices and maybe we'd buy the damn things!




Madman of the People

BMW can't afford to move too far downmarket without compromising their integrity or imposing on MINI.

[the Teuton]

BMW can't afford to move too far downmarket without compromising their integrity or imposing on MINI.

Perhaps we shouldn't have gotten the 1er in the first place then. Though a downmarket 1er would've ended up just like the 318ti most likely.

[TurboDan]

Perhaps we shouldn't have gotten the 1er in the first place then. Though a downmarket 1er would've ended up just like the 318ti most likely.

But as I've mentioned, why would this be a problem? I used to see a TON of 318s around here when they were selling those.

[saxonyron]

Yes, that US pricing strategy of theirs is ridiculous. At least here there's a proper gap, albeit stupidly inflated by that horrid luxury car tax of ours. $45,500 buys you an automatic 120i hatch, whereas an extra $9k is required to step into a 320i. The difference is even more prominent at the top-end - $74,700 for a 135i versus $107,800 for a 335i.

Omi, are you  serious??  Did you mean to say a 735i, not a 335i?  $100,000?  I know an Aussie dollar is about equal to a US dollar, so if that's true, your prices are about double ours?  Is that all taxes?  I was just talking to an Australian yesterday about the old 100% or so tariff on cars that old friends of mine from Adelaide back in the 1980's used to pay.  Is this still the case?

[Raza]

Omi, are you  serious??  Did you mean to say a 735i, not a 335i?  $100,000?  I know an Aussie dollar is about equal to a US dollar, so if that's true, your prices are about double ours?  Is that all taxes?  I was just talking to an Australian yesterday about the old 100% or so tariff on cars that old friends of mine from Adelaide back in the 1980's used to pay.  Is this still the case?

It's a long boat ride.

[saxonyron]

It's a long boat ride.

True.    But I'm pretty sure they're floating in on freighters and not superyachts.  Shipping shit is cheaper than ever.  That why we cut trees down in America and ship them to China for milling, and ship the finished lumber back here.  I think the Aussies are being taxed to death.  The cursed socialism always comes with a big price tag.

[the Teuton]

Remember, minimum wage is also something like $20/hr. there because they're all socialists and everyone deserves a "living" wage -- even high school kangaroo burger flippers.

[omicron]

Omi, are you  serious??  Did you mean to say a 735i, not a 335i?  $100,000?   I know an Aussie dollar is about equal to a US dollar, so if that's true, your prices are about double ours?  Is that all taxes?  I was just talking to an Australian yesterday about the old 100% or so tariff on cars that old friends of mine from Adelaide back in the 1980's used to pay.  Is this still the case?

A 730d is $199k.....

Tariffs on imported cars peaked at 57.5% in 1984, but as of January 2010 both imported cars and 4WDs are subject to a 5% tariff. As with almost every good or service sold here, a new car purchase attracts 10% GST/VAT, but prices quoted to consumers must always be inclusive of GST (business buyers, however, who can claim back GST, can be advertised GST-exclusive prices). In addition, there is a luxury car tax of 33% that is applied to the GST-exclusive portion of the purchase price that exceeds the GST-inclusive $57,123 threshold.

To use that 335i as an example, of the $107,800 MSRP ($98,000 plus $9800 GST), $50,677 is subject to LCT. Removing the GST from this portion leaves $46,070 to calculate the LCT component. 33% of $46,070 is $15,203.

Assuming all other things being equal, then, without the LCT our 335i would have an MSRP of $92,597 ($84,179 plus $8,417.90 GST). Still, in other words, relatively more than your 335i, even if the 5% tariff was removed.

So why the high price, then? Because they can, I guess? One of the unintended consequences of the high tariffs of the '80s and '90s was conditioning the market into accepting high prices for imported cars - with 50% tariffs, higher sales taxes, and limited opportunities to amortise costs due to limited sales and model ranges, I'd expect that essentially every BMW, Mercedes, high-end Audi or Saab et. al. was pushed well beyond the reach of most, but in the process acquiring a definite 'status symbol' reputation. Up until this point, of course, as a direct result of tariff protection most brands had some sort of local manufacturing or assembly presence to avoid said tariffs, so 'imported' was generally synonymous with 'European', although there are many examples of Japanese models with quite high prices relative to locally-built models.

Looking at my February 1986 Wheels, a mid-spec Holden Commodore cost $19,140; a top-spec Mazda 323 hatch cost $19,400; a Mercedes 190E $55,647; and a Porsche 944 Turbo $114,992. Nowadays, you can buy a brand-new base Mazda3 for $21,115; a C200K for $57,900; and a Cayman for $114,000, but a mid-spec Commodore is $42,790. It wouldn't surprise me at all if Mercedes is making substantially more money on each C200K than they were on each bare-bones 190E, either.

Relatively speaking, therefore, imported cars look much, much better value to the market these days because consumers had to pay 2010 entry prices way back in 1986. With much-reduced tariffs, lower sales tax, the ever-increasing price of mainstream models from plebeian brands pushing more buyers closer to the entry-level premium brands, a market accustomed to high prices for premium brands, and higher incomes and household wealth, the pricing of new cars in Australia is probably a surprisingly accurate representation of what the market would gladly pay for such cars. That is, with no luxury car tax or import tariff, and simply a flat 10% sales tax on all models, I don't think you'd see much of a difference in price at all.

To that end, I give you this article:

AMG stands for: Australian Market Growth

''Australia is proving to be one of the biggest markets for Mercedes-Benz's high performance cars -- despite some of the strictest speed enforcement in the world.

Since the arrival two years ago of the 'bahn-storming C63 AMG -- a 6.2-litre V8 in a sedan smaller than a Toyota Camry -- at $140,000, about $20,000 less than its predecessor, sales have taken off.

Australia is now fourth in overall AMG sales in the Mercedes-Benz world, behind Japan, Germany and the USA. But as a percentage of total Mercedes-Benz sales in each country, Australia tops the lot.

More than 1000 Mercedes-Benz C63s have been sold over the past two years -- 1003 to be exact, including 32 wagons -- and the company expects the 2010 tally to eclipse 600 by the end of this year.

"This year alone we're on target to sell in excess of 600 Mercedes-Benz C63 AMGs, which would outsell all its competition combined, according to the figures we have," says Mercedes-Benz spokesman David McCarthy.

The more expensive E63 AMG, which offers a more powerful version of the 6.2-litre V8 in a Holden Commodore-sized sedan, is also selling well.

Despite its $220,000 price tag, more than 100 new generation E63s have been sold so far this year alone, and another 100 are expected to be delivered by the end of 2010.

When asked for a possible explanation for the boom in the popularity of AMG cars, McCarthy said: "Australians love rear drive V8s. Indeed some customers have come up through the top end of the Australian muscle car ranks (HSV and FPV). One customer had a HSV W427 [the $155,000 7.0-litre supercar] on order, but cancelled his order and bought a C63 and pocketed some change

http://www.carpoint.com.au/news/2010/prestige-and-luxury/mercedesbenz/amg-stands-for-australian-market-growth-19207

Or at least, that's how I see things. 

[cawimmer430]

Australia is now fourth in overall AMG sales in the Mercedes-Benz world, behind Japan, Germany and the USA. But as a percentage of total Mercedes-Benz sales in each country, Australia tops the lot.

There are more AMG's sold in Japan and Germany than the US?

Holy shit! 

[Xer0]

There are more AMG's sold in Japan and Germany than the US?

Holy shit! 

I think it means behind in chronological order so Japan would be 3, Germany 2, and the US 1.  Strange if Japan and Germany would be over the US though since I always thought it was the largest market for AMG too.

[cawimmer430]

I think it means behind in chronological order so Japan would be 3, Germany 2, and the US 1.  Strange if Japan and Germany would be over the US though since I always thought it was the largest market for AMG too.

Upon rereading the sentence again it seems to make sense now. I guess the US is the biggest market for AMG's, then Germany, Japan and finally Australia. 

[omicron]

LONG POST LONG POST LONG POST

Come to think of it, with all these free-trade agreements these days, I have a strong suspicion that the 5% tariff only applies to select countries - most likely continental Europe. Honda's Thailand factory supplies most of the Australian range because there's no import tariff on Thai vehicles, and it wouldn't surprise me if much of south-east and east Asia fell under the same banner. Tariffs between Australia and the US should have been eliminated by now, too.

Upon rereading the sentence again it seems to make sense now. I guess the US is the biggest market for AMG's, then Germany, Japan and finally Australia. 

Japan's buying habits always intrigue me. For all the dross they buy, and with their remarkable metropolitan population density in mind, there's still a healthy market for outlandish, powerful supersaloons and GTs.

[hotrodalex]

It is absolutely ridiculous that the BASE 1 Series in America is powered by a 3.0 litre six cylinder engine!  Why?  There is no reason whatsoever for BMW not to offer a 120i over here.  Also, BMW only sells the coupe and cabrio versions over here and there is a pretty limited market for two-door cars.

Note to BMW: try offering us the five-door with more realistic engine choices and maybe we'd buy the damn things!




Madman of the People

The US hates most wagons. Hatchbacks do a little bit better, but not much.

[saxonyron]

Wow Omi, you really get hosed over there.  That still comes out to around 50% or more for a car.  You should really start a minor smuggling operation.  Think of the great tax-free deals you can get then! 

[omicron]

Wow Omi, you really get hosed over there.  That still comes out to around 50% or more for a car.  You should really start a minor smuggling operation.  Think of the great tax-free deals you can get then! 

It was so much worse in the past. Looking in the January 1989 issue, a BMW 750iL was $216,500 (today's 740Li is $218k), the 190E had jumped to $70,000, a Bentley Turbo R was $351,978 (!), a Saab 900 Cabriolet $78,140; even a miserable Fiat Croma was $35k. No wonder the local Falcons and Commodores sold so well.