Real Exchange Rate.... Applied to Merc-Benz Vehicles - Mercedes-Benz Forum

 
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post #1 of 6 (permalink) Old 01-12-2008, 10:04 AM Thread Starter
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Mercedes Benz Pricing... USA/UK/Aus

Hi guys, I'm a new poster here but was really hoping someone could shed some light on this topic. (Not sure if this is the right area to be posting this, and I apologise if it isnt )

Australia
MERCEDES-BENZ E-CLASS W211 E500 Elegance
$161,300RRP

UK
MERCEDES-BENZ E CLASS E500 Elegance 5dr Tip Auto
£45,442RRP (w/ taxes+reg)

USA
2007 Mercedes-Benz E 550 (Only quote I could find in a quick google search)
$59,000MSRP

real exchange rate = nominal interest rate * price / foriegn price

rer (aus, uk) = 0.4553 * 161300 / 45442 = 1.62
rer (aus, us) = 0.8908 * 161300 / 59000 = 2.44
rer (uk, us) = 1.5966 * 45442 / 59000 = 1.23

What is the reason behind this ridiculous differential in price competitiveness between Australia/USA, in particular?? Even though I am completely uninformed about car pricing/imports/etc... I initially put it down to the car being a left-hand drive in USA/Germany, thereby meaning US dealers needed to reduce prices to correlate with German car dealerships to avoid US citizens importing the car themselves if it was severely overpriced. But, I mean there is still a pretty big difference in pricing between UK/Australia (62&#37.

Could someone please shed some light on the matter of why Mercedes-Benz's are so much dearer in Australia, than in the USA and UK?

Last edited by vrumchev; 01-12-2008 at 11:07 AM.
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post #2 of 6 (permalink) Old 01-12-2008, 11:57 AM
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The first reason must be tax, the second one also tax, the third one must be the manufacturers interest to be present in an important market (important specifically in respect to share holders).

I'm not sure about the US prices but you would probably have to pay some tax on top of the advertised price (you know when you go to a shop, you have to pay more than the indicated price as tax is not included). In Australia I assume you pay car tax and likely some VAT on the car and the car tax. You should have more details about this.

There must be some price premium for a RHD car but that would not that much actually.
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post #3 of 6 (permalink) Old 01-13-2008, 03:02 PM
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Hi,
I am from Australia and I have also wondered. Part of the reason is import duty and 'on road tax', although Aust has reduced its import duties over the last few years (decades?).
Another might be the difference in specification.
I once compared the prices of a C350, and the UK and US ones needed a whole bunch of options to get it equivalent eg leather seats, COMAND, Thermotronic a/c, Parktronic, full sized spare wheel, etc. However, the UK model had folding mirrors as standard, optional in the wide open spaces of Australia :-)
But I also think there is a bit of price gouging going on with the Aust dealers.....
Does anyone know precisely what the option 625 Aust delivery consists of?
regards from sunny South Australia,
audiophile_AU
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post #4 of 6 (permalink) Old 01-15-2008, 11:15 PM
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(a) Shipping charges to Australia are outrageous compared to R.O.W.
(b) Import Duty
(c) Stamp Duty
(d) Luxury car Tax
(e) GST (VAT)
(f) Alleged ADR compliancy
(g) hot climate packs
(h) any other tax I haven't thought of.
(j) Outrageous dealer delivery charges
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post #5 of 6 (permalink) Old 01-16-2008, 05:56 PM
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Welcome to BW. This is an interesting topic. Could you possiblely enlighten us in the USA on what the rates or charges are on some of these different taxes.

Also, it would be a good time to fill out your profiles so we can all know where you are, what you drive and all the fun stuff.

Again, welcome.

McBear,
Kentucky

Being smart is knowing the difference, in a sticky situation between a well delivered anecdote and a well delivered antidote - bear.
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post #6 of 6 (permalink) Old 01-20-2008, 08:20 AM Thread Starter
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Quote:
(a) Shipping charges to Australia are outrageous compared to R.O.W.
(b) Import Duty
(c) Stamp Duty
(d) Luxury car Tax
(e) GST (VAT)
(f) Alleged ADR compliancy
(g) hot climate packs
(h) any other tax I haven't thought of.
(j) Outrageous dealer delivery charges
Can you provide some figures as to how these correlate to an approx. $100,000 price differential??
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