GM Chief: Strong Euro Is Damaging Car Industry

This is a complicated problem.
I just bought a Lexus IS for $9000 less than the equivalently equipped BMW 3 series (it's true my local BMW dealer doesn't deal as well as our Lexus dealer). I don't like the unfairness of the Japanese artificially deflating the value of the yen to keep their industry humming at the expense of the rest of the world, but what choice did I have? This is not a insignificant amount of money I saved. Some might say the BMW is well worth the extra $$$s, and it might be to some, but most people who want a decent sports sedan (in which the BMW 3, IS, G35, TL, CTS, and A4 are the most popular) are very cost conscious.
How do you guys/gals feel about this?

"I don't like the unfairness of the Japanese artificially deflating the value of the yen to keep their industry humming at the expense of the rest of the world."

Why is this bad when you just got a equivalently equipped car for $9000 less. I hope the Japanese would keep deflating its yens so we can buy quality Japanese goods at bargain prices. If the Germans can't keep up, deflate the Euros. better yet, go back to Deutschmarks, if Euro won't go down. I don't see anything wrong with it. Britain is a member of the EU, and it's still using sterling pounds.

It's bad because it's an unfair advantage, and is damaging exports from Europe to Japan, meaning Japan is doing great while Europe suffers.

Simple, lower the Euro then.

"He estimated that the currency difference gave Japanese car makers such as Toyota, Nissan and Honda a 3,000 to 4,000 advantage over their European rivals on each model sold."

Wow, but BMW is doing quite well even with this 3000 to 4000 disadvantage. Is his estimation wrong? or is BMW doing exceptionally well?

Right, the dollar is weak. But then the dollar should be equally weak to both yen and Euro.

correct.... the dollar keeps falling..... thanks to G.W.Bush and his endless wars.....

The dollar is desinged to be weak. M53R, your statment is false. Our economy is booming right now. We had a small recession pre - post 9/11 and have been roaring ever since and a major part of that is due to the weak dollar.

"...It is not something you can leave to the free market."
And therein lies the problem, i.e. the belief that it is the government that needs to take some sort of artificial action as opposed to allowing the market itself to develop the necessary correction.

my EUR 0.02

This seems to be working both ways. European compaines such as Porsche, BMW and Audi are seeing massive gains in profitability. Part of this comes from the extra prices now paid for European cars.

On the other hand, there are buyers at stake.

I'm glad I'm not GM's European chief!

euro, shmuro! the CARS THEMSELVES are the basis for ranking.
following are results of TopGear survey, Best in Class category:

"If you want satisfaction, buy from Japan. That's the message from our survey if you break the results down class-by-class. Nearly every category is topped by a sensible, well put-together piece of Japanese metal, and nearly every category sees a badly-built, unreliable European banger at the bottom. Like it or lump it, we're just telling it like it is.

Sports
The Honda S2000 canters to victory in the sports car category, closely pushed by a pair of Mazdas (the MX5 and RX8) and brace of Toyotas (the MR2 and Celica). Smart's tiny Roadster is officially the worst sports car around, but we reckon that's partially due to harsh categorisation. Dishonourable mention, then, goes to the second-bottom Merc CLK, which owners found bugged by reliability issues.

Luxury
You might expect the German executive barges to walk this one, but no - the Lexus IS200/300 is the top luxury car around. And though the Jaguar marque is languishing in the doldrums, owners haven't been deterred with the XJ and S-Type both recording strong positions. The Mercedes E- and S-Class bring up the rear, with poor reliability causing the problems again.

SUV
It's another victory for Lexus in the 4x4 category, with owners exalting the RX300's combination of bullet-proof build quality and on-road manners. Second place for the Kia Sorento is a great result for a model aimed at the budget end of the SUV market. Mercedes manages to avoid the wooden spoon in this category, but only just - the utilitarian Jeep Cherokee proving even worse than the M-Class.



'Nearly every category is topped by a sensible, well put-together piece of Japanese metal'
MPV
Brace yourself for a shock: it's a European car in first place. A combination of spaciousness and versatility sees the Seat Altea take the crown in the MPV category, while at the other end - can you tell what it is yet? - the Peugeot 807 lurks apologetically. You really didn't like it, did you?

Medium
It's been a good survey for Skoda. The Czech company has flourished under Volkswagen's ownership, and this top-two finish for the Octavia and Superb helps Skoda edge past Lexus as the best manufacturer overall. It's not a category that makes good reading for the French, though, with Peugeot's 406 and 407 joining the Renault Laguna in the relegation zone.

Compact
It's the celebrity media-appeaser of choice, and it seems the rest of you are keen on the Toyota Prius too. The hybrid tops a Japan-dominated category, beating off strong competition from the Mazda 3 and Honda Civic. Z-list status goes to the Peugeot 307, Renault Megane and Merc A-Class.

Small
Tiny but perfectly formed, the Honda Jazz nipped past Skoda's Fabia and the Fiat Panda to scoop the big prize in this category. And just in case the French manufacturers were getting lonely propping up the table, the Rover 25 gallantly

(excuse repetion. slow pasting causing me to re-do, thinking 1st try didn't take.)

link to page (other categories listed too):
http://www.topgear.com/content/carsurvey/2006/features/07/1.html

last part that was cut off (autospies REALLY needs editing capability!):

(And just in case the French manufacturers were getting lonely propping up the table, the Rover 25 gallantly) ...sinks below the Citroen C3 in last place. Good British manners, y'see.

"and nearly every category sees a badly-built, unreliable European banger at the bottom. Like it or lump it, we're just telling it like it is."

An Oxymoron? If telling it like it is means sensationalising a car with minor faults as being a 'banger', then I've lost respect For TopGear's editorial team.

This is an issue that is very complicated and is debated by economists all through the globe. This goes far beyond the auto industry. What is amazing to me is that German car companies are still able to make a profit and sell against their Japanese counterparts. It must really attest to the desirability of German makes. If the prices were the same for both vehicles - where do you all think sales would be? I'll use an example close to home for me. The company I work for is a global company and has many offices all over the globe. Part of the strategy to being profitable is being cost-effective. I work in one of the NY offices and we have an office in a Southern U.S. state that does many of the same functions. The company had been trying for years to send our functions to that other office because it's cheaper to have employees in the south vs. NY. The salaries, insurance, transportaion etc. etc. would be cheaper - but what happened is that our team was so good at doing our job that it didn't make sense to try and move our functions. It wasn't because the executives "liked" us - it was because of the cold hard facts. I don't say this to brag - I say this because if you study business management it's called cost/risk/benefit analysis and opportunity cost. Not to mention one of the Directors told our group himself that was the case. Now apply the same theory to shopping for a vehicle and it amazes me that BMW, Mercedes, and Audi are still the three largest luxury makes - because the Japanese have such a price advantage. I'm sure this is going to upset the Lexus faithful - but I'm not dealing with emotions here - just the reality at hand. Although, admittedly we'll see what happens when the Japanese really start to push Infiniti and Lexus (I believe Acuras will still be called Hondas) in Europe for so much less. For right now it seems they are just starting to ramp up the marketing and production efforts.

Check what prices?? Please be more specific

Hell, why doesn't currency just be equallized around the globe? $1 = 1 euro, 1 peso = $1, 1 yen = $1, etc....and see how everyone is REALLY doing...