The weak Dollar

[F Spider]

With the weak Dollar, and no recovery in sight, many European manufacturers have a problem when the sell products in "Dollar" countries.

Dollar countries are not only the US, but also the middle east (they have all their oil income in Dollars, and China, because the Yuan is linked to the Dollar).

Spyker sells 50% of its production inside the USA, but if you take into account the Dollar Countries, it is much higher: 75% of the cars sold are in that market.

This has to lead to a whole new strategy.........

[Kevin Slegg]

...and what do you think that may be???

[F Spider]

Get major components made in the so called dollar economies. A US engine is only one of the things you have to consider. Chassis and body shell also come to mind as being the three major components a car has. And of course there are many smaller ones: rims, tires etc.

[Kevin Slegg]

I see

[F Spider]

In the local US's struggling economy there is still rather limited inflation, because the Feds are lowering the interest rate continuously. On the other hand, this means that on the world market it is more attractive to buy Euros than Dollars. This makes the exchange rate so crazy.

The Euro was designed on par with the Dollar. It started at 1.18, then sunk to 0.84 and now is almost 1.60. Those are huge swings.

Now, i've noticed that there is a strong correlation between the oil price and the Dollar exchange rate. They are moving almost in lock-step.

In other words, you could contend that oil is not charged in Dollars any more, but already priced in Euros, because the price in Euros is fairly constant, while in Dollars its just going up and up.

[FocdeBlanes]

This is an interesting dutch documentary from 2005 about the collapse of
the dollar. They wrote a scenario about the collapse of the dollar in 24 hour.
The exchange rate started at the 2005 rate and collapsed within 24 hours to euro/dollar : 1/1.65. It's interesting that 1.65 is the current exchange rate and in the scenario they are going to charge the oil not in dollars anymore, but in euro's.

http://cgi.omroep.nl/cgi-bin/streams...rt=0&end=0

[F Spider]

BMW and mercedes are also building cars in the US, so, somewhat they are able to offset their exchange losses. Whatever they are losing on the 3-5-7 series (because they could not increase the prices by 50%) gets offset by the X5 and Z4 US produced cars. Inside the US these cars are a wash ($ to $), but exporting these models to Europe gives them some extra profit to offset the losses (Note that the US produced models have not become 33% cheaper in the EU)

Porsche and Ferrari do have a problem. They cannot offset their losses, and especially Ferrari is sending less cars to the US, and the ones they send have (only) become 15% more expensive.

Porsche has not been raising their prices. You can get a well optioned Cayenne Turbo for just over $100K. This would be less than 70K Euros.