Topic: dollar at parity

[gord_boyd]

Time to review imports again.
Any activity out there?

[sailor723]

I think there is still quite a bit of importing going on. I was in the US last week and when I came back I noticed lots of signage for "vehicle exports report here" and a large parking area for traffic exiting the USA at the new US Customs building in Calais,Me. The only reason that I know for reporting on the way out of the US is if you are exporting a vehicle

[Railton]

Yup, in RE again.
Railton

[sailor723]

Just looked....99.72 US  as of 14:30 EDT 

[DockMan]

I'll be "importing" a new Ipod , Kentucky bourbon, and winter mats while I'm in Cinci this weekend

 

I'm going to import tires and rims for four vehicles, and perhaps repatriate some Canadian Beer!

[sailor723]

Almost there!......CDN $ was quoted at .9995 US when I looked at Yahoo Finance this morning. maybe I won't keep the SRX for another year after all! 

[gord_boyd]

From what I read, Euro cars will go up in price in New Year, due to weakening both US & Cdn currancies.

A weakening US currency leads to inflationary pressures on any imports.

New BMW X3 will avoid this by adding production to Spartanburg.

Hyundai bragged recently their 400K unit production capacity vs. Sales No.'s at 500K
means they have same ratio as Ford/GM & Chrysler.

[dave]

Just got my winter tires for the Passat from Tirerack.

[mmret]

With all the USD buying that you guy are going to be doing we'll never get to 90 cents (the other way).

[JSCC]

With all the USD buying that you guy are going to be doing we'll never get to 90 cents (the other way).

You never know.
http://www.bloomberg.com/news/2010-11-05/asian-currencies-rise-most-in-month-as-fed-easing-encourages-carry-trades.html

What I don't understand is, how can imported vehicles going into USA still be at such low prices?
The US dollar has been weak for the past 2-3 years, yet the German and Japanese (foreign made not USA made) vehicles are still being sold at relatively cheap prices.

[No H2O]

I've imported products since the early 90s at exchange rates as high as 1.57 and still saved quite a bit. You had to pick your purchases at that rate, but anything under an exchange rate of 1.40 was a saving for the majority of my purchases. At better than 1.20, I'm laughing all the way to the bank. Business up here does not want to know how much of my money went stateside this year...in the thousands. 

What gets me is VWs are made in Mexico, part of NAFTA, yet I cannot buy a new one at a dealer stateside. No doubt due to pressure from VW Canada in their inability to compete...or more like their desire to rip off.

[mmret]

With all the USD buying that you guy are going to be doing we'll never get to 90 cents (the other way).

You never know.
http://www.bloomberg.com/news/2010-11-05/asian-currencies-rise-most-in-month-as-fed-easing-encourages-carry-trades.html

What I don't understand is, how can imported vehicles going into USA still be at such low prices?
The US dollar has been weak for the past 2-3 years, yet the German and Japanese (foreign made not USA made) vehicles are still being sold at relatively cheap prices.

FX has been volatile for the last 2-3 years, USD was quite strong for a time (of course this coincided with the banking blow up on pre QE1).

But to answer your question...how do you expect to raise prices in a terrible economic environment where it seems the only way to sell something is to put it on sale? There are still some deflationary pulls in the machine down south. So probably they are just taking it on the chin and trying to slowly grind out of it through a combination of slow price hikes year over year, hoping the economy recovers, probably a better net interest margin on loans (I would guess loan rates have not really come down that much but their funding rates have), and probably decontenting (see new Jetta).

Oh and they are making a shitload of money in China.

[JSCC]

With all the USD buying that you guy are going to be doing we'll never get to 90 cents (the other way).

You never know.
http://www.bloomberg.com/news/2010-11-05/asian-currencies-rise-most-in-month-as-fed-easing-encourages-carry-trades.html

What I don't understand is, how can imported vehicles going into USA still be at such low prices?
The US dollar has been weak for the past 2-3 years, yet the German and Japanese (foreign made not USA made) vehicles are still being sold at relatively cheap prices.

FX has been volatile for the last 2-3 years, USD was quite strong for a time (of course this coincided with the banking blow up on pre QE1).

But to answer your question...how do you expect to raise prices in a terrible economic environment where it seems the only way to sell something is to put it on sale? There are still some deflationary pulls in the machine down south. So probably they are just taking it on the chin and trying to slowly grind out of it through a combination of slow price hikes year over year, hoping the economy recovers, probably a better net interest margin on loans (I would guess loan rates have not really come down that much but their funding rates have), and probably decontenting (see new Jetta).

Oh and they are making a shitload of money in China.

Wouldn't introducing lower end entry models at current prices and increasing the prices of higher end models be reasonable?
How long can they keep the prices low without cutting in to profits (or even worse, selling at a loss)?

Relying on profits from other regions to make up for the loss (or reduced profit) in the USA does not seem to be a "long term" sustainable solution.
Yes, the global balance sheets may look okay for now, but in the long run, steady growth in all regions should be what these corporations are aiming for.

[sailor723]

Short term I think the Europeans will take the loss on US sales to maintain market share while they hope for the greenback to recover (pretty tough to raise prices given current US economic conditions). Longer term,if the FX rates don't rebound they will either have to move more production to the US or scale back their US operations.

[safristi]

... LET'S PARITY like it's 1999......................... ..wifey taking me across the Rio Grande (Sarnia crossing/semi legally!!!) this coming weekend fer BED BATH & BEYOND ...something or other.... ...................prolly a chandelier will be INVOLVED......... ............

[JSCC]

Short term I think the Europeans will take the loss on US sales to maintain market share while they hope for the greenback to recover (pretty tough to raise prices given current US economic conditions). Longer term,if the FX rates don't rebound they will either have to move more production to the US or scale back their US operations.

Well, the "move more production to the US" part has already started with BMW's X3 and VW's new nid-size sedan.

MB considered to make the next generation C-Class in the USA but some how did not go ahead.
Audi may start to produced some vehicles in the VW plant in Chattanooga.

[mmret]

Relying on profits from other regions to make up for the loss (or reduced profit) in the USA does not seem to be a "long term" sustainable solution.
Yes, the global balance sheets may look okay for now, but in the long run, steady growth in all regions should be what these corporations are aiming for.

'

Fully agree with you, but they can't hike prices 20% just because Euro went from 1.20 to 1.40 and JPY from 95 to 80.

[sailor723]

Don't know about cars coming in from the States, but I know we're doing more Christmas shopping online then ever and most of it seems to be US companies.