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School me on automotive (macro)economics

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Old 01-17-2020, 12:38 PM
  #11  

 
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Super complicated stuff.

On a macro level gotta look at the rules and regulations of these other countries as well.
Old 01-17-2020, 02:27 PM
  #12  

 
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Originally Posted by budgy
Super complicated stuff.

On a macro level gotta look at the rules and regulations of these other countries as well.
Manufacturers have factories everywhere. I read somewhere that the Toyota Camry is the most american car if you consider design to finished product. Alot of bummers are built in NC for instance.
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budgy (01-17-2020)
Old 01-18-2020, 02:27 PM
  #13  
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Default It is part of the business model

BMW, Merc, Audi , sell ( or lease) to people with high disposable incomes who drive the cars for a few years and move on to the next new model. They pay a premium price and suffer huge depreciation, and those makes take in a killing off them.

Them comes the average guy who wants to look baller and buy a lightly used three year old car. That guy thinks they are getting a really great deal, and they very well may. But as the cars pack on miles and need replacement parts, BMW, Merc, and Audi see the potential to make ANOTHER huge haul off of a group of people who wont buy from them new.

I disagree with those claiming other makes charge the same for parts, because they dont. My 3 series replacement headlight was almost $1,000. The higher your make brings in price for the “gotta have it to be cool” factor, the same is true of what peoole will pay for parts. If Chevy or Dodge start charging what BMW charges for parts, there would be less reason to buy those brands. Every automaker WANTS to charge top dollar for parts and make it a profit center, but each can charge what the market will bear. People will pay premium parts prices for what they feel is a premium brand. They will not pay premium prices for a perceived average brand. All automakers will charge the most they can get away with in the marketplace. It has almost nothing to do with exchange rates or country if origin.

Ferrari and Honda can each source a fan belt for $5, but if you have the money Ferrari will charge you $500 because owners will pay it, but Honda buyers wont. If Chevy could get away with charging $500 for a belt, dont you think they would?

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QUIKAG (01-20-2020)
Old 01-18-2020, 04:29 PM
  #14  

 
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How about the good ol' TUV standards in Germany. Everything must be certified, which involves expensive testing, engineering and inspection. The history behind the creation of TUV standards likely created a mindset throughout that country where everything was highly engineered. Regardless if that is a good system or not, it has to add costs to anything that is produced there. Germans make great efforts to tell the rest of the world how well they engineer things. Coupled with German labour costs, and generally higher costs of production, they need to charge more for their products. That pretty much applies to any product made in Germany. They can't compete with production costs in places like China or Mexico , so they stake their reputation on quality and expect to find the right customers who will pay for that.
Old 01-20-2020, 03:04 AM
  #15  
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Manufacturers charge what they can get away with.

Premium brands charge more because they are premium brands.

Here in the UK, Honda was seen as a mid-to-luxury brand (similar to VW, so positioned above the French, Italian and the "UK" manufacturers Ford, Vauxhall (GM) and British Leyland/Rover).

My perception of Honda in the USA is that it's more of a budget brand (happy to be corrected on this).

Consequently, the parts are very expensive, often costing more than twice as much as in the USA.
Random example, the S2000 headlight in the UK is GBP750 or about $980. Sales tax is 20% here, so that's $816 pre-tax.
US price is $440, even with 6% tax, that's only $466.

Honda feels it can get away with that sort of thing here, so it does so.
Old 01-21-2020, 08:11 AM
  #16  

 
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Originally Posted by vader1
Ferrari and Honda can each source a fan belt for $5, but if you have the money Ferrari will charge you $500 because owners will pay it, but Honda buyers wont. If Chevy could get away with charging $500 for a belt, dont you think they would?
Yep, you see this all the time. Often higher-end cars will use the exact same part # as a mainstream brand, but somehow it will cost more. Great example is on my old E39 M5, there were two MAF sensors and each one cost several hundred bucks - but the exact same part was found on a Volkswagen and somehow it cost much less.
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