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      06-28-2018, 08:30 AM   #1
mblaucoupe135
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I have placed an order recently for a 2019 M240i xdrive. I don't want to get into a political discussion here, but I have a bad feeling based on the things that have occurred in the last few months that it's only a matter of time until the Trump administration imposes higher tariffs on imported cars from Europe. I realize no one has a crystal ball but I'm curious to hear people's thoughts on how they might impact the price of new BMWs. Will BMW eat most of the increases to keep their prices down and sales up or will they pass the higher costs on to the consumer? How soon will it impact cars coming to the US? Any thoughts would be appreciated.
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      06-28-2018, 09:37 AM   #2
dradernh
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It's difficult to speculate on what's going to happen, or when. You may find this piece useful - it's mostly factual information: https://www.reuters.com/article/us-u...-idUSKBN1JM1GQ

IIRC, BMW was the world's most profitable car company in 2016, so it may be better positioned than many other auto manufacturers to absorb some or all of any increased tariffs that are imposed.
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      06-28-2018, 09:49 AM   #3
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I placed an order for my car back in April, the car is still at the port right now in Germany. I sent my dealer an email when the whole news of possible tariffs came out about my concern of the price negotiated changing.

He emailed me back stating that the price was already agreed upon and the car was already produced. He told me they would honor the deal no matter what happens.

Might be worth shooting your dealer an email asking and see what he says. I pretty much laid out in my initial email that i wouldnt take the car anymore if there was a tariff added on, and i would want my deposit back.
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      06-28-2018, 02:23 PM   #4
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Even if he does slap a 20% tariff on EU car imports, those aren't the only manufacturers that will be impacted by his actions. It is most likely that Ford and other US car manufacturers will have to increase prices dramatically to accommodate the increased cost of materials. Much of the aluminum used in auto manufacturing comes from overseas. Once tariffs impact the cost of raw materials, so too does the price of the finished product, impacting affordability and jobs in the US.

Interesting article I just read this morning on a small town in Quebec that was basically created by Americans in order to supply aluminum for the war effort, and now supplies beer cans, cars, guns, etc. A MAJOR source of US aluminum...

https://www.bnnbloomberg.ca/trump-s-...rica-1.1100245

The next thought that comes up then is "so we will just use more american steel and aluminum". Well, aside from the fact that there is no where near enough domestic supply to meet demand in the US, the reason why a US manufacturer would import steel and aluminum (other than supply issues mentioned above) is because its cheaper than domestic supply. So what happens then? Forced to buy domestic, cost of manufacturing goes up, cost of finished product goes up, sales fall, jobs are lost.

Another great post...especially the part on aluminum...

https://www.straitstimes.com/world/u...inum-and-steel

Its not going to be pretty for anyone!
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      06-28-2018, 05:54 PM   #5
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Tariffs!?

We don't need no stink'n tariffs!

My lease is up in September, plenty of time to consider buying it and waiting out the mess.
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      06-28-2018, 05:59 PM   #6
dradernh
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Quote:
Originally Posted by mike519 View Post
US car manufacturers will have to increase prices dramatically
By what percentage, would you estimate?
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      06-28-2018, 06:27 PM   #7
mblaucoupe135
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Quote:
Originally Posted by Wakka View Post
I placed an order for my car back in April, the car is still at the port right now in Germany. I sent my dealer an email when the whole news of possible tariffs came out about my concern of the price negotiated changing.

He emailed me back stating that the price was already agreed upon and the car was already produced. He told me they would honor the deal no matter what happens.

Might be worth shooting your dealer an email asking and see what he says. I pretty much laid out in my initial email that i wouldnt take the car anymore if there was a tariff added on, and i would want my deposit back.
yeah that's a good idea. I'm hoping cars already in process won't be impacted; or even better that since I believe bmw has already announced prices for the 2019 models, any increases wouldn't hit until the 2020 year. I suppose bmw is positioned pretty well in regard to tariffs as they make a ton of cars in the US and they are SUVs that most Americans buy. I'm assuming the American made bimmers wouldn't be impacted.

I had thought about ordering the car back in February when this whole tariff talk started. I'm really kicking myself now for not doing it!
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      06-28-2018, 07:19 PM   #8
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Quote:
Originally Posted by dradernh View Post
By what percentage, would you estimate?
No idea. I doubt it would be anywhere near 20%, however, the bigger question is how much of an increase in prices for manufactured goods can the US economy handle before in starts to affect jobs and the overall economy as a whole.
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      06-28-2018, 11:39 PM   #9
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BMW won't sell cars for a loss or no profit. They will have to raise prices if these tariffs are imposed.

I also asked my dealership about what happens to ordered cars if tariffs are imposed before they pass customs. Their answer was that I could refuse the car if I didn't want to pay the higher price. The price "lock" doesn't apply to something like this.
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      06-29-2018, 08:30 AM   #10
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Quote:
Originally Posted by visualguy View Post
BMW won't sell cars for a loss or no profit. They will have to raise prices if these tariffs are imposed.

I also asked my dealership about what happens to ordered cars if tariffs are imposed before they pass customs. Their answer was that I could refuse the car if I didn't want to pay the higher price. The price "lock" doesn't apply to something like this.
yeah I was afraid of this too. right now the tariff on European cars is 5%. if they try to align them with what Europe does with US cars, it would go up to 10% which isn't too bad. however I doubt it will be this minor of an increase and I'm guessing they will go up to at least 20 or 25%, meaning only wealthier Americans will be able to afford them.
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      06-29-2018, 09:42 AM   #11
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Quote:
Originally Posted by mblaucoupe135 View Post
I'm guessing they will go up to at least 20 or 25%
Why?
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      06-29-2018, 06:04 PM   #12
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Quote:
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Quote:
Originally Posted by mblaucoupe135 View Post
I'm guessing they will go up to at least 20 or 25%
Why?
To really stick it to Europe as the trump administration feels they have been sticking it to us for years when it comes to trade. also they did 25% on some of the steel and aluminum imports so they may want to align them. I really hope I am wrong and the increases are much smaller than this.
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      07-01-2018, 01:05 PM   #13
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Bottom line is, if all the manufacturers are facing similar tariffs you can bet your last dollar that they will just pass it right on to the consumer. They might be willing to absorb it if one manufacturer was subject to a tariff but most of the others weren't...said manufacturer will potentially absorb some of the tariffs to remain competitive.
That being said, if there was an expectation that this will only be a short term pain I could see them potentially absorbing the tariffs to retain/increase market share.
My guess is that everyone will raise their prices and the tariffs will flow right through to the consumer...
In terms of dealers honouring the contracted price if tariffs do go up, they will mostl likely increase the price and hope you accept the new price. They will be in breach of contract, but your remedy is either a lawsuit or you can get your deposit back with no penalties. Read the fine print of your sales contract, if it specifically mentions duties/tariffs.
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      07-01-2018, 05:19 PM   #14
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Tariffs are almost always entirely eaten by the end consumer. It's a fundamental topic in Economics.
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      07-02-2018, 08:26 AM   #15
mblaucoupe135
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Quote:
Originally Posted by kivyee View Post
Bottom line is, if all the manufacturers are facing similar tariffs you can bet your last dollar that they will just pass it right on to the consumer. They might be willing to absorb it if one manufacturer was subject to a tariff but most of the others weren't...said manufacturer will potentially absorb some of the tariffs to remain competitive.
That being said, if there was an expectation that this will only be a short term pain I could see them potentially absorbing the tariffs to retain/increase market share.
My guess is that everyone will raise their prices and the tariffs will flow right through to the consumer...
In terms of dealers honouring the contracted price if tariffs do go up, they will mostl likely increase the price and hope you accept the new price. They will be in breach of contract, but your remedy is either a lawsuit or you can get your deposit back with no penalties. Read the fine print of your sales contract, if it specifically mentions duties/tariffs.
yeah I agree this is probably what will most likely occur with any new tariffs. There was a little good news on this front recently. GM apparently made a statement against the tariffs saying it would hurt their business too and force them to raise their prices, hurting the consumer. I hope other US car companies say the same thing.
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      07-03-2018, 12:46 PM   #16
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Announcement now that Trump wants to slap the same tariff on cars coming into the US from Canada (and Mexico). So let me get this straight...some models from US makers are made in Canada (for example) and he's going to tariff them coming into the US. So, it hurts US manufacturers when sales drop and hurts US consumers who have to pay the higher price now to buy an "American" car. Smooth move!
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      07-03-2018, 04:06 PM   #17
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Quote:
Originally Posted by mike519 View Post
Announcement now that Trump wants to slap the same tariff on cars coming into the US from Canada (and Mexico). So let me get this straight...some models from US makers are made in Canada (for example) and he's going to tariff them coming into the US. So, it hurts US manufacturers when sales drop and hurts US consumers who have to pay the higher price now to buy an "American" car. Smooth move!
yeah doesn't make a lot of sense and is going to piss off a lot of people!
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