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BMW, VW-Audi's U.S. Operations Are Starting To Bleed Cash
It's not much of a consolation, but European car manufacturers are having a seriously hard time in the U.S. It's not just Ford, GM and Chrysler fighting off the red ink.

According to Adam Jonas, London-based auto analyst with investment banker Morgan Stanley, European automakers earned 31 per cent of their profits in the U.S. in 2001. This had fallen to 4 per cent in 2007, while the Europeans will be losing money in the U.S. by 2010.

The most important European importers are BMW, Mercedes, VW and its premium subsidiary Audi. Porsche's sales are slowing, but it's not likely to be losing money in the U.S.

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BMW, VW-Audi's U.S. Operations Are Starting To Bleed Cash



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theoptimisticpessimisttheoptimisticpessimist - 5/28/2008 4:39:44 PM
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Weak dollar strong euro, its to be expected.

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EL34EL34 - 5/28/2008 5:52:17 PM
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That's why Europeans should bring their cash to the USA and buy homes from me :-)


TeknikTeknik - 5/28/2008 6:22:49 PMView My AgentSpace
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No one will buy a home from a 5 year old kid.

Sorry... :-/


Kraut_godKraut_god - 5/29/2008 9:26:54 AM
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nobody wants kraut crap what do you expect.


Peyton18Peyton18 - 5/28/2008 4:49:27 PM
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yup...and these are a couple of very ambitious companies right now

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S4cabriofoxoneS4cabriofoxone - 5/28/2008 5:10:05 PMView My AgentSpace
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Which is yet another reason why Audi isn't focusing on the US market. Until the economy improves, it's better for them not to be a big player here.

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budfrogS4budfrogS4 - 5/29/2008 10:43:38 AMView My AgentSpace
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Homer's right, S4. They need to focus on building a US plant to keep the costs down. Hopefully it won't take too much longer to break ground on that new facility.


budfrogS4budfrogS4 - 5/29/2008 10:45:56 AMView My AgentSpace
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The US is still a very important player in the world. And eventually the economy will start getting better. If they have a plant up and running when the upturn comes, they'll be much better off.


S4cabriofoxoneS4cabriofoxone - 5/29/2008 4:07:50 PMView My AgentSpace
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I know, I said "Until." Key word.


EL34EL34 - 5/28/2008 5:50:34 PM
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I just got home from previewing a home right off PCH in Laguna Beach that is on the market for $12,800,000 and in the garage was an Aston Martin DB9, Maserati Quattroporte and a Ferrari 360 Modena. The wine cellar had over $10k worth of wine and you can open a small gate from one of the three decks and walk right down to the beach in about 15 steps.

Worth every penny and well within the owners means ;->

I'm sure Audi/VW have nothing to worry about.

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wedouglaswedouglas - 5/28/2008 6:02:17 PM
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They are going to have to sell a lot more than 3 cars per rich person to compensate for the other hundreds of millions of normal earners.


TeknikTeknik - 5/28/2008 6:23:50 PMView My AgentSpace
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Did you watch that on TV EL34, while sitting in your baby chair?


EL34EL34 - 5/28/2008 7:16:19 PM
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No, I was at the house talking with the hot lady that owns the house and is the agent as well.

Guitarist Richie Sambora from Bon Jovi lives a few houses down.




EvoAudiEvoAudi - 5/29/2008 12:15:23 AMView My AgentSpace
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nearly all 360 drivers are middle aged business men that buy it for the badge and probably couldn't tell you the displacement of the engine.


budfrogS4budfrogS4 - 5/29/2008 10:48:41 AMView My AgentSpace
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Evo - I wish there was a rule that if you asked a Ferrari owner what the displacement of their car is and they can't answer correctly, you are automatically assume ownership of the vehicle. A crying shame if they don't have an appreciation for a car like that.


S4cabriofoxoneS4cabriofoxone - 5/29/2008 4:08:47 PMView My AgentSpace
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^LOL, I completely agree. Ferrari... So cliché, but I just SO want one...


huu76huu76 - 5/28/2008 6:35:45 PM
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If all those 3 series were built here, there wouldn't be a problem. Maybe if they set the X6's sales goal a little higher than 40,000.

Should've copied the Japanese and build their cars where they sell them. It's not too late to learn a thing or two.

I have a feeling we're going to see more German auto plants in Mexico though.

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M53RM53R - 5/29/2008 5:05:52 AMView My AgentSpace
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^ When trolls agree!!!


enthusiastx11enthusiastx11 - 5/29/2008 11:23:30 AM
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blah, blah, blah....oh, were you talking again huu.


amazinBimmeramazinBimmer - 5/28/2008 9:13:25 PM
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s4.. another reason why audi doenst compete well here.. BECAUSE THEIR CARS SUCK and americans dont buy FWD POS. I love it.. you dont think they would be bigger here if they could?? thats a joke

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EL34EL34 - 5/28/2008 10:02:48 PM
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Tell us how you really feel.

BTW, on PCH in Laguna Beach today I saw an Audi A5.

It was a nice silver one ;->


amazinBimmeramazinBimmer - 5/28/2008 10:34:21 PM
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EL.. i saw a 335 coupe today.... better, faster, meaner, and better built. You heard of these cars?

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ChicaneShooterChicaneShooter - 5/29/2008 4:09:41 AM
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what this means, is that barring a strong recovery of the dollar vs. the euro (don't hold your breath while spendthrift GOPpies remain in power), euro brands will become even more expensive. and/or reliant on cheaper component parts and electrical items.

this will be a replay of the late '70s, when the socalled prestige/luxury euro brands were ONLY the equivalent of pontiacs and buicks. nowhere as classy as cadillacs and lincolns. (tho' they DID handle better.)

the shift in dollar/mark ratios FORCED pricing in dollars to shoot upward. so they had to re-position themselves as "luxury" and "sport-luxury" cars to justify the higher prices.

history will repeat itself with another huge round of "adjustments." sorry, euro fans, but that is the basic REALITY of the current economic situation.



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MaindrianPaceMaindrianPace - 5/29/2008 4:30:52 AM
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So why don't the US manufacturers capitalise and start selling more cars over here? People would buy the mustang, people would buy the challenger....

...unless of course it's true what they say about american cars not driving as well as euro cars, in which case, surely people in the states are still going to wnat to pay a premium for the better euro cars?

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JWalkerLegrandeJWalkerLegrande - 5/29/2008 6:25:59 AM
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Hmm. This does not make sense.

BMW builds all their X5's & X6's in Spartanburg, moves X3 here by October 2008. I do not see how they could lose money on the US venture as they are selling these beasts for hard euros to their distributors all over the place - even in South America and Asia. 40% of BMW WW sales is SUV's er.. SAVs.

MB has a capacity of 300,000 vehicles in Alabama, while they sell around 220,000 vehicles on the US market each year. Looks to me they are also perfectly hedged...

VW AG lost $1 bn two years ago in the US of A, WITHOUT the weak $. They have been building their cars in cheapo Mexico AND could not capitalize on that. Audi's US sales have never been strong enough to cause too much damage on the currency issue alone. Their number2 market is the UK though - I can see some issues coming from the weak sterling.


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enthusiastx11enthusiastx11 - 5/29/2008 11:27:10 AM
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bmw sales are NOT 40% SUVs.

the dozen-plus variants of the 3-series alone accounts for 60% of brand sales. add in 5 and 7-series and that's over 75% of sales. SUVs are actually less than 15% of overall sales.


S4cabriofoxoneS4cabriofoxone - 5/29/2008 4:10:00 PMView My AgentSpace
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enthusiast, you're right, that figure sounded completely wrong...


enthusiastx11enthusiastx11 - 5/29/2008 11:21:55 AM
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just to be clear, this is a BUSINESS topic NOT a product topic.

the dollar has lost about 60 percent of its value against the euro in the past few years. this is a MASSIVE currency fluctuation that probably will wipe out US profits for european companies of all sorts that do not have local production.

just stop all the blather about product and get off this post if you don't have a rudimentary understanding of currency markets.

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nybimmernybimmer - 5/29/2008 4:04:46 PM
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Yes, I think the country is (or will be) in pretty bad shape. Inflation is here, the jobs really aren't.

People bash the war in Iraq (and I do agree it was a very bad direction for our country) but objectively, if it wasn't for all the jobs created as a result of the $1 trillion per year the govt is spending, our country would have been in the economic doldrums much, much sooner.

Everybody on this site - please tally up your monthly expenditures, roll that out three years, and consider whether you will be able to afford your lifestlye if you lost your job or that bonus (or commisions) didn't come thru. I hate to be a naysayer, but I think its going to get a lot worse before it gets better.

Perhaps the people in EL34's PCH house are really selling it because they can't afford it?


huu76huu76 - 5/29/2008 10:22:55 PM
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I think enthusiast is star.
Odd that Star knew I'm Asian right off the bat and both have nothing of relevance to say.

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huu76huu76 - 5/30/2008 11:32:04 PM
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nybimmer,
How much do you think oil would be if Iraq's 2 million barrel per day production disappeared? You think Europe's going would get it back?
The speculators would have a hay day blaming "windier than expected Wednesdays" and "uncertainty about whether Monday will always precede Tuesday" as reasons to push oil higher. Expect this to happen if Obama's college kids remember to vote.

jwalker,
VW builds their cars in Mexico so I don't know what they're complaining about. Audi probably is getting hit but the U.S. isn't their #1 market.

Wherever the U.S. market goes, the rest of the world follows, like it or not. The only major country not affected is probably Russia since they don't sell us anything.

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