Why are European cars more expensive than American ones?

Discussion in 'The Garage' started by xanis, Aug 12, 2008.

  1. xanis

    xanis Lifer

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    It's something I've always wondered. Take, for example, the Volkswagen Jetta, sold both here and abroad. In America, a very basic, base model Jetta costs $16,990. In Germany, in the car's home country, the same model costs 20,225?. That's about $30,000. Why such a huge price difference? Is it taxes or other things? I'm honestly a total noob when it comes to this stuff, so sorry if I'm missing something obvious.
     
  2. CyberDuck

    CyberDuck Senior member

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    I have always wondered why cars where so cheap in America to.. Its probably mostly because of taxes, but also because the dollar is very weak now, making European cars more expensive because nobodt wants to put higher prices in dollars. Btw, in my country the most basic Jetta (1,6 102 hk) cost NOK 257.350 = $ 47.890
     
  3. Colt45

    Colt45 Lifer

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    Well VAT is ~20% in Germany, so that can't help. I'm not sure if there are other auto related taxes as well.


    Also ( I know this isn't the case for most german cars, but for the jetta..) the american model is probably produced in brazil, and the german model... probably in germany. But not always the case I guess.
     
  4. Riverhound777

    Riverhound777 Diamond Member

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    Many of the European models of cars use better parts and materials. They expect it over there and are willing to pay for it. Americans are cheap and would rather pay less.
     
  5. AstroManLuca

    AstroManLuca Lifer

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    I've always noticed that when watching Top Gear. They quote a price of "only 20,000 pounds" for a car that, in America, would only cost about 20-25,000 dollars. But 20k pounds is 40k dollars!
     
  6. Demon-Xanth

    Demon-Xanth Lifer

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    European cars and European gas has always been higher because they have been heavily taxed to discourage large cars and lots of them.
     
  7. xanis

    xanis Lifer

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    Alright, so it's the taxes then. That makes sense.
     
  8. JulesMaximus

    JulesMaximus No Lifer

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    That is complete nonsense.

    Fact is there are a number of reasons ranging from taxes to economies of scale. The United States is one of the largest consumers of European cars worldwide so they need to sell cars here. Some may even make a business decision to sell cars for less than they can get for them in Europe just to have the market presence and to help get volume discounts on the raw materials they buy to build the cars. They may also build cars for American market in South America or even in the United States vs building them in Europe to lower production costs.

    Also, currency conversion rates might make selling cars even less attractive but manufacturers might elect to take even less profit on their cars to increase sales volume.
     
  9. everydae

    everydae Diamond Member

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    It's not cars are more expensive in Europe -- The fact is, cars are too cheap in US.

    Not only in EU, look at the other parts of the world. For instance, in Korea, Hyundai Sonata is about $ 30,000. And due to import tax, imported cars are even more expensive. BMW 3 series is about $ 55K, CR-V and Accord are about $ 40K, etc.

    The biggest part of the price difference is obviously tax. But on the other hand, we live in the country we have to have a car, while they live in the country they don't have to have a car. And also, think about the sales volume and the competition driven from that.
     
  10. Riverhound777

    Riverhound777 Diamond Member

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    No its not just taxes. Go look at a Euro Focus and an American Focus. Way different cars.
     
  11. xanis

    xanis Lifer

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    True. And why don't we have a 3-door hatchback of the Focus here anymore?