Saturday, 17 January 2004
Come to the USA from Europe to buy a car?
Americans taking a long trip through Europe, and in the market for a new car anyway, often used to arrange to purchase a European car direct from the manufacturer or a dealer in Europe, pick it up in Europe (perhaps directly at the factory), use it for their European travels, and then have it shipped back to the USA at the end of their vacation.
Especially in the days before widespead availability of long-term automobile leases at reasonable prices, such an arrangement often cost less than the combined cost of renting a car for the duration of a lengthy European stay, plus buying a new car in the USA.
And a further incentive was provided by the fact that many European car makers charged more for the same models in the USA than in Europe, not just to cover the cost of shipping but because Americans were percieved as wealthier, and willing to pay more for the same vehicle than Europeans.
Some Europeans car and motorcycle manufactures still offer special packages for American buyers who want to take delivery in Europe of a new car certified for USA emissisons and safety standards, use it in Europe for some time, and then have the manufacturer handle shipping it to the USA.
But the tables have turned.
With the rise of the Euro against the U.S. dollar, some European car companies are now deliberately pricing soem vehicles in the USA substantially below their prices for the same models in Europe -- by more than the cost of shipping them back to Europe! Such lower pricing is necessary to compete in the American market, even if it reduces their prifit margin on sales made in the USA.
Mark Lander reports from Munich in today's New York Times :
Ferdinand Dudenhaffer, director of the Center for Automotive Research in Gelsenkirchen.... raised eyebrows here recently with a study meant to dramatize how exchange rates can shake up the global auto industry. He showed that the euro had risen so much against the dollar that it would be cheaper for Germans to buy high-priced German cars in the United States and pay import duties and other costs to have them shipped back to Germany than to buy them at home.
One example used in the study was Porsche's new Carrera GT sports car, which costs $440,000 in the United States. Converting that into euros at $1.30 each yields a euro price of 338,462. Add 16 percent in taxes and that total rises to 392,615 euros. Getting the car back to Germany might add a few thousand euros. The Carrera GT, Porsche's most expensive model, sells for 452,690 euros in Germany....
"Even for a Rolls-Royce owner, 65,000 euros is nice money," Mr. Dudenhaffer said. "You can do something with that."
With the fallen (and perhaps still falling) U.S. dollar making the USA the bargain destination of the year for European travellers, and the great American road trip one of the big draws for USA visitors from Europe and other more crowded places, will we start seeing special packages for European vacationers who want to take delivery of a car in the USA, use it to explore Amaeirca, and have it shipped home at the end of their holiday?
After all, what could be a more genuine way to experience the American way of life than to buy a car?
If you aren't from the USA, and want to try it, just be forewarned that -- unlike in almost any other country -- procedures for automobile and driver purchasing, registration, and insurance aren't standardized throughout the country, but vary drastically from state to state, as I discuss in The Practical Nomad: How to Travel Around the World . Try to get a local person familiar with the procedures in that particular state to help walk you through the paperwork and red tape.Link | Posted by Edward on Saturday, 17 January 2004, 20:10 ( 8:10 PM)