Comments on: Reduced BMW / MINI Availability? http://www.motoringfile.com/2005/05/19/reduced_bmw__mini_availability/ MotoringFile | MINI news, reviews and opinion. MINI Cooper, Cooper S, Clubman, Countryman Thu, 09 Feb 2012 20:14:00 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Eric http://www.motoringfile.com/2005/05/19/reduced_bmw__mini_availability/comment-page-1/#comment-20247 Eric Mon, 23 May 2005 20:35:57 +0000 http://matthewgifford.com/2005/05/19/#comment-20247 <p>Timothy, good points, but using parenthesis every other sentence makes them hard to read.</p> <p>Also, BMW doesn't care about gas-guzzling taxes and neither does the dude shelling out $55,000+ for the vehicle.</p> Timothy, good points, but using parenthesis every other sentence makes them hard to read.

Also, BMW doesn’t care about gas-guzzling taxes and neither does the dude shelling out $55,000+ for the vehicle.

]]> By: Timothy Sipples http://www.motoringfile.com/2005/05/19/reduced_bmw__mini_availability/comment-page-1/#comment-20246 Timothy Sipples Sat, 21 May 2005 15:27:20 +0000 http://matthewgifford.com/2005/05/19/#comment-20246 <p>An automaker CEO's job is not to talk about plentiful supply but rather (artificial) scarcity. I guarantee that if/when the dollar's value increases relative to the euro -- as it has somewhat recently -- Mr. Purves will not be talking about the eagerness with which BMW will offer increased allocations to North America.</p> <p>BMW makes lots and lots of cars (and SUVs) in South Carolina now. So does that mean BMW will be lowering the euro price of the X5? Of course not.</p> <p>Currency fluctuations happen all the time. BMW is not (I think) stupid. That's why the company has manufacturing in different countries (including the U.S.) and, undoubtedly, currency hedges. Mr. Purves's marketing and operating expenses are now euro-cheaper as well. (Mr. Purves's dollar salary costs less in euros.) Currency impacts are not all one direction for a multinational company like BMW, and any competently run multinational takes steps to protect against normal currency fluctuations. It's a pretty minor issue from the perspective of auto buyers, especially in this very competitive industry.</p> <p>The price of oil is up, too, increasing the price of plastics and the energy used to produce vehicles, worldwide. Also remember that MINI engines are, at least currently, built in Brazil. The Brazilian Real has surged in the past year versus both the U.S. dollar and euro. Moving engine production to Europe, assuming at least equal productivity, will actually make the car cheaper (also assuming no change in currencies).</p> <p>Mr. Purves is simply doing his job, talking up how "scarce" the vehicles are. (If it wasn't this it'd be something else.) But remember also that BMW could tolerate selling MINIs at a loss because every MINI sold means another mega-profitable X5 can also be sold under CAFE rules. No MINIs, many fewer X5s -- or a sales-killing gas guzzler tax. The same goes for the other models, so BMW can't really adjust the allocation mix too much against the more fuel efficient models.</p> An automaker CEO’s job is not to talk about plentiful supply but rather (artificial) scarcity. I guarantee that if/when the dollar’s value increases relative to the euro — as it has somewhat recently — Mr. Purves will not be talking about the eagerness with which BMW will offer increased allocations to North America.

BMW makes lots and lots of cars (and SUVs) in South Carolina now. So does that mean BMW will be lowering the euro price of the X5? Of course not.

Currency fluctuations happen all the time. BMW is not (I think) stupid. That’s why the company has manufacturing in different countries (including the U.S.) and, undoubtedly, currency hedges. Mr. Purves’s marketing and operating expenses are now euro-cheaper as well. (Mr. Purves’s dollar salary costs less in euros.) Currency impacts are not all one direction for a multinational company like BMW, and any competently run multinational takes steps to protect against normal currency fluctuations. It’s a pretty minor issue from the perspective of auto buyers, especially in this very competitive industry.

The price of oil is up, too, increasing the price of plastics and the energy used to produce vehicles, worldwide. Also remember that MINI engines are, at least currently, built in Brazil. The Brazilian Real has surged in the past year versus both the U.S. dollar and euro. Moving engine production to Europe, assuming at least equal productivity, will actually make the car cheaper (also assuming no change in currencies).

Mr. Purves is simply doing his job, talking up how “scarce” the vehicles are. (If it wasn’t this it’d be something else.) But remember also that BMW could tolerate selling MINIs at a loss because every MINI sold means another mega-profitable X5 can also be sold under CAFE rules. No MINIs, many fewer X5s — or a sales-killing gas guzzler tax. The same goes for the other models, so BMW can’t really adjust the allocation mix too much against the more fuel efficient models.

]]> By: Greg http://www.motoringfile.com/2005/05/19/reduced_bmw__mini_availability/comment-page-1/#comment-20245 Greg Sat, 21 May 2005 11:03:44 +0000 http://matthewgifford.com/2005/05/19/#comment-20245 <p>Hmmm...seems Timothy has an issue. The lower US dollar means lower profits for BMW AG despite record sales in USA and elsewhere. The more cars sold in USA mean less profits for the Quants and shareholders. If it weren't for BMW the Mini would be also dead and buried with MGF and Rover. What has Mini convertible got that MGF and Mazda Miata don't have? Answer - two rear seats. Otherwise Mini beats both hands-down in many areas.</p> Hmmm…seems Timothy has an issue. The lower US dollar means lower profits for BMW AG despite record sales in USA and elsewhere. The more cars sold in USA mean less profits for the Quants and shareholders. If it weren’t for BMW the Mini would be also dead and buried with MGF and Rover. What has Mini convertible got that MGF and Mazda Miata don’t have? Answer – two rear seats. Otherwise Mini beats both hands-down in many areas.

]]> By: Timothy Sipples http://www.motoringfile.com/2005/05/19/reduced_bmw__mini_availability/comment-page-1/#comment-20244 Timothy Sipples Fri, 20 May 2005 14:32:12 +0000 http://matthewgifford.com/2005/05/19/#comment-20244 <p>Well, what would Mr. Purves say? "Dear Potential Purchasers: Our products will be in plentiful supply, especially those new models that we're introducing. Your Beemer will be as common as cups of coffee at Starbucks. Your neighbor will be driving one, too. Feel free to negotiate aggressively with our dealers. They'll be desperate to unload all the extra inventory we're sending them. Buy a new 7 series and they'll throw in a MINI if you simply ask."</p> <p>Please. If it wasn't the exchange rate (which is probably hedged anyhow) Mr. Purves would talk about something else. For example, the bankruptcy of Rover now "forces" ex-MG buyers to purchase MINI convertibles, making them rarer than virgins in a Nevada brothel.</p> <p>Besides, BMW now gets to pay its U.S. workers who assemble its cars in South Carolina a lower (euro) wage, saving money there. So even unhedged, it's not like currency fluctuations affect their business uniformly. Those high markup X5 monsters just got cheaper to produce, in relative terms.</p> Well, what would Mr. Purves say? “Dear Potential Purchasers: Our products will be in plentiful supply, especially those new models that we’re introducing. Your Beemer will be as common as cups of coffee at Starbucks. Your neighbor will be driving one, too. Feel free to negotiate aggressively with our dealers. They’ll be desperate to unload all the extra inventory we’re sending them. Buy a new 7 series and they’ll throw in a MINI if you simply ask.”

Please. If it wasn’t the exchange rate (which is probably hedged anyhow) Mr. Purves would talk about something else. For example, the bankruptcy of Rover now “forces” ex-MG buyers to purchase MINI convertibles, making them rarer than virgins in a Nevada brothel.

Besides, BMW now gets to pay its U.S. workers who assemble its cars in South Carolina a lower (euro) wage, saving money there. So even unhedged, it’s not like currency fluctuations affect their business uniformly. Those high markup X5 monsters just got cheaper to produce, in relative terms.

]]> By: Ian Elstub http://www.motoringfile.com/2005/05/19/reduced_bmw__mini_availability/comment-page-1/#comment-20243 Ian Elstub Fri, 20 May 2005 11:59:31 +0000 http://matthewgifford.com/2005/05/19/#comment-20243 <p>Remember guys that the UK is not part of the euro so I guess the Mini is dependent on the £/$ exchange rate. Although the £ is strong it is showing signs of weakening against the dollar and the UK economy is likely to be quite soft in the coming months forcing it down further, I think it unlikely that with the expansion of production at Cowley that supplies to the U.S. will get smaller.</p> Remember guys that the UK is not part of the euro so I guess the Mini is dependent on the £/$ exchange rate. Although the £ is strong it is showing signs of weakening against the dollar and the UK economy is likely to be quite soft in the coming months forcing it down further, I think it unlikely that with the expansion of production at Cowley that supplies to the U.S. will get smaller.

]]> By: Erik http://www.motoringfile.com/2005/05/19/reduced_bmw__mini_availability/comment-page-1/#comment-20242 Erik Fri, 20 May 2005 03:51:37 +0000 http://matthewgifford.com/2005/05/19/#comment-20242 <p>If you currently own a MINI it's probably good for future resale.</p> If you currently own a MINI it’s probably good for future resale.

]]> By: johnsocal http://www.motoringfile.com/2005/05/19/reduced_bmw__mini_availability/comment-page-1/#comment-20241 johnsocal Thu, 19 May 2005 19:00:01 +0000 http://matthewgifford.com/2005/05/19/#comment-20241 <p>It appears the US-dollar bottomed out against the Euro in March and has been climbing since.</p> It appears the US-dollar bottomed out against the Euro in March and has been climbing since.

]]> By: Amit http://www.motoringfile.com/2005/05/19/reduced_bmw__mini_availability/comment-page-1/#comment-20240 Amit Thu, 19 May 2005 18:38:42 +0000 http://matthewgifford.com/2005/05/19/#comment-20240 <p>This is exactly why I bought my new MINI in the US and brought it to Montreal. The US dollar is extremely low and the prices across border have not changed as a result. I saved $5,000 by going this route.</p> This is exactly why I bought my new MINI in the US and brought it to Montreal. The US dollar is extremely low and the prices across border have not changed as a result. I saved $5,000 by going this route.

]]> By: Bill Lawrence http://www.motoringfile.com/2005/05/19/reduced_bmw__mini_availability/comment-page-1/#comment-20239 Bill Lawrence Thu, 19 May 2005 18:26:47 +0000 http://matthewgifford.com/2005/05/19/#comment-20239 <p>This could mean expansion of the Spartanburg SC plant. BMW depends too much on North American sales to just not attempt to meet demand.</p> This could mean expansion of the Spartanburg SC plant. BMW depends too much on North American sales to just not attempt to meet demand.

]]> By: Eric http://www.motoringfile.com/2005/05/19/reduced_bmw__mini_availability/comment-page-1/#comment-20238 Eric Thu, 19 May 2005 15:21:57 +0000 http://matthewgifford.com/2005/05/19/#comment-20238 <p>Ian, I wonder how this will affect BMW's planning and strategy for the upcoming 1er in North America???</p> Ian, I wonder how this will affect BMW’s planning and strategy for the upcoming 1er in North America???

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