Few analysts sit down and lay out the cost factor of a US car, delivered into Germany. So here is the rate.
The ship arrives and off comes Car-X (made in New Jersey). The company makes this car, with profits figured in, and the shipping costs.....at $21,000.
As it comes off the vessel, there is a 10-percent import tax applied. So that car goes to the German dealer at $23,100. But the dealer now has to add in the VAT (the sales tax), which is set to 19-percent. This brings the car up to $27,489. The dealer needs to make his profit on this, so the cost will rise around 1,500, so the car is now around $29,000.
Figure the Euro exchange rate, and the car appears on the lot for 23,780 Euro.
The import tax and the 19-percent sales tax? Basically making an American car near 30-percent more. Is that the only issue? No.
Most American cars don't appeal to the European consumer. The Jeep? Yes. The Mustang? To some degree. In an average year, I will see around two-hundred PT-Cruisers on the German highways. But the look/appeal, along with gas mileage, and the cost-factor.....all weigh against the US car industry having some chance to market their cars. That's the simple truth.
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