GL Fahrer

I decided to take stroll through the M-B Germany website…fascinating!

The base GL450 is 80,682 EUR, which is converts to $114,264 !!!
MBUSA sells the GL450 for MSRP $55,500

I’m now on the German "Build your own" website and built up the V8+ (GL500) with as many U.S. (V8+) standard features as available. I come up with a price of 110,100 which converts to $155,741 !!!
MBUSA sells the GL550 for MSRP $76,975

ReachWest

Try the same thing on the MB Canada website - you'll see that we pay alot more for the same thing too. MB Canada Website

LindaAZ

A lot of that is due to the dollar falling relative to the Canadian dollar and the Euro...

oknish

So my guess is that shipping and import duty must add a fair bunch to the GL cost while in US there is only shipping costs. What about cars that MB builds in Germany? Do they also sell at twice (approx) twice of US base costs?

ReachWest

Actually the US dollar falling relative to the Euro and C$ would make anything built in the US less expensive in Germany (and or Canada). Not vice versa.

Can Drive 55

Don't the European countries have a lot of taxes added to the price of the vehicle? Such as the VAT?

Prefo

Yes Reachwest you are correct.

What bugs me most, specifically with the GL and ML, is that they are manufactured in the USA, and therefore under the Free Trade Agreement between Canada and USA, there should be no or very minimal duties or import tax to cause a price difference. Maybe at most a couple extra hundred dollars for the shipping across the border, but we are seeing a 20 - 30% msrp difference.. I can understand that duties and taxes on imports from Germany or Japan might make a difference in msrp's, but it doesn't apply to USA manufactured goods coming into Canada such as the GL and ML.

scottybdiving

Is it possible for you to purchase in the US. Does NAFTA cover that also?

oknish

So why can't those of you in Canada come down to US to buy a car? I am curious.

Prefo

Oknish - a good question. Short answer is we would if we could.

The reason is that the manufactures prohibit the US dealers from knowingly selling a vehicle to Canadians (they stand to lose their dealership if they do); and the Canadian dealers are prohibited from offering warranty on the US purchased vehicle (dealership loss if they do). In fact in Canada right now there is so much consumer backlash against this that there has been a class-action lawsuit launched that accuses major automakers and dealers of violating competition and consumer protection laws by conspiring to artificially inflate car prices in Canada. And specifically with the M-B GLs and MLs which are manufactured in the USA, the Free Trade Agreement between Canada and USA should negate any import taxes and duties differences so the prices should be similar rather than the 20 - 30% difference we see today.

Regardless of my Rant... I love the GL and am still get one.

oknish

I see what you are saying. I would be ticked off too.

GL Fahrer

The NAFTA answer is simple: Volume.
Like option pricing and availability, vehicle pricing is directly related to volume...In three weeks, M-B USA sells what M-B Canada sells in a year.
In my opinion, this is not some conspiracy, but simply M-B Canada has little to no ability to negotiate with DCAG when it comes to pricing.

The majority of vehicles rolling off the line in the Alabama plant are built for one country...the U.S. That is a pretty powerfull position to be in.

LindaAZ

No... if you exchange American dollars for Euros you get less Euros than previously - when the dollar was highter...so you need MORE American dollars for the same number of Euros....

The exchange rate is playing a part in the American dollar amount you are seeing. I have purchased things from England and the amount I pay now is higher not lower than before because of the falling value of the American dollar.

emayer

Aside from the Euro conversion rate there are a few other issues involved:

1. For lack of a better descriptor there is a cost differential by foreign auto manufacturer's to stay competitive in the US marketplace. You will likely find these price discrepancies throughout various manufacturers and models.

2. The other thing not mentioned which I'm not certain is incorporated in the MB price is the VAT tax. This is a major component of vehicle purchases in Europe.

oknish

So, Fahrer, won't that also account for lower prices in US also? MBUSA is in a much stronger position to negotiate prices with DCAG, going by your arguments.

GL Fahrer

Yes...that's my point. If DCAG were to offer a GL for +100K MBUSA would simply walk...just like luxury SUV buyers in the U.S.

GL Fahrer

If you order a German (equiv) V8+ today, you will be required to pay 110,000 EURO. quibble on the equivalent value all you want, the customer will pay nearly double what we pay here in the U.S.

A good part of this price is also in the simplifying of option complexity from the factory (for U.S. spec vehicles).

lkchris

When you buy a GL in Germany you buy an engine and transmission built in Germany, shipped to USA to be installed, and then shipped back.

This likely applies to the tires, too.

oknish

What about the shipping costs and duties, Fahrer? How much do they add to the EU costs for cars made in US?

Prefo

What we are seeing in Canada is not really a volume, it's more a function of FX rate between US$ and CDN$.

For a simplified example:
A year ago a 2007 GL 450 Base Model msrp from M-B Canada was ~ C$82,000 (taxes, VAT, etc. are outside of this)
Today, a 2008 GL 450 Base Model msrp still cost ~ C$82,000 (same price - so looks good so far)
However what has changed in the last year is the Cdn$ has risen ~ 25% against the US$; so today C$1.00 = US$1.00. The alleged conspiracy ("words used in the class action - not mine") is that the Canadian manufactures, M-B Canada et al are now purchasing their US made vehicles such as ML/GL at a 25% discount to what they paid last year. This 25% has not been past to the consumer, that's what has the Canadian consumer PO'd. To make matters worse, the Manufactures/Dealers prevent the consumer (by not offer warranty etc.) from crossing the border to buy the same identical brand new vehicle for 25% less. This also goes against NAFTA. Anyway, sorry for the long explanation, all I want is my GL at any price.

GL Fahrer

Great post , but are you serious when you say "...my GL at any price"?
I'm interested to see if there are consumers who would be willing to pay +$100k for a GL with the opportunity to order all worldwide options.

oknish

Try me

ReachWest

Well - I paid north of $100k for mine. Bottom line, in Canada .. if you want one - you gotta pay it. By the way - my dealer is preselling all that they are allocated 4 to 5 months ahead. So even at these prices, the demand is there.

Bottom line, in Canada .. If I had the option to travel to the US and bring one back, I would have. That door is closed to us.

emayer

I would, especially if this included the off-road package.

GL Fahrer

Let me re-phrase: would there be 30,000 of you?


.....didn't think so.