BOOSTD

My company's exports are going to be severely hampered this year due simply to the strong dollar/limp-wristed Euro. We were able to lower prices on our goods (in US$) due to cost savings, yet our customers will still pay more for our goods than ever before because the currencies are so far out of whack. If this is the case, when do we get to see the flip-side of this?? Why aren't Audis and Porsches selling for steep discounts? It would appear the auto industry is immune to this phenomenon. Come to think of it, currency fluctuations only seem to help or hurt other countries when it comes to importing and exporting. We never see the good side of having a strong dollar!

EdP

Demand dictates price. Car sales not down enough.

BOOSTD

true, but at this rate, European car co's are REALLY raking it in on us

Darrenn

All I remember from Economics 101 is "Supply and Demand" They are in high demand so that just means that they're making more money on them based on the exchange. Audi prices their cars based on the local market - for example I bought my car in Canada and they are priced waay cheaper up there than here in California. I've seen guys selling 1.8T a year old for less than what I paid for mine new (when you work out the exchange)

Auditude

they can use these funds for incentives on slow selling vehicles. Otherwise they just use them to make shareholders happy.

hemants

Auto companies likely pre-hedge their currency risk based on expected sales forecasts using currency forwards, options etc. That way, their profits are not subject to short term fluctuations.

At the same time if there is a persistant trend to a stronger US dollar (for example) then the price of European cars in the US will drop. (all else being equal).

FourRings

Go up to Canada to see the power (albeit somewhat limp-wristed) of the US dollar.

J.Russ

As far as Audis are concerned, us Yanks are paying a lot less for our cars than the poor saps Over There. Audis are at least as expensive, if not more so, than bimmers and benzes in Europe while here in the states they undercut those two marks by thousands of semolians. This is a case of a producer creating demand through aggressive pricing.

It's amusing to read the British car mags writing about A4 Avants that sell new for 30,000 pounds, which translates to about $45K US.

But on the other hand, they DO get to buy the RS4!

EdP

When you factor in the emmissions requirements and equipment and tuning necessary to meet spec, the RS4 performs NO BETTER than the S4. Sad but true. This is from AoA Product management in a recent article. It was the primary reason for not considering importing the car. The S4 avant will fill the RS4's shoes here in the States.