Re: BMW Canada's economic lesson

[John Firestone <john.firestone@xxxxxxxxxxxxxxxxxx>]

thnewton@domain.elided (Tom Newton) writes:
> 
> I couldn't help but laugh out loud about the ridiculous reasoning BMW
> Canada used to explain why their parts/accessories prices are higher
> than in the states. The funniest sound bite of 'em all was this one...
> 
> >Some Canadians have found ways around the pricing situation by buying
> directly from the USA, and all that does is drive the price up here
> even higher...<
> 
> HA!!! I'll tell you what, Boris Yeltsin aught to hire the guy that
> wrote that! I'm afraid the basic laws of supply and demand dictate
> that if people buy more and more products somewhere else, demand for
> your products will decrease. And the primary way to rebuild demand for
> your products -- AND STAY IN BUSINESS -- is to lower prices - not
> raise them! If the free market system operated the way BMW Canada
> thinks it should, we'd all be driving Trabants by now! 
> 

I beg to differ.  I think we would be driving BMW's. The reasoning you
make fun of is not uncommon in Europe. It is the natural instinct of a
protected franchise operating next to a more competitive market. I am
curious what sort of mark up BMW Canada is asking.  I know from
experience that most German consumer prices could be cut by a third if
there were as much competition as in the U.S.  Yet that does not seem
to have made German cars obsolete.

- -John
'96 318is
john.firestone@domain.elided

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