The Financial Times reports that Anti-trust officials in Switzerland are investigating the Bavarian car maker due to allegations made by a Swiss consumer TV show. The TV show sent undercover reporters to BMW dealerships in Germany (Swiss and Germany share a border, you know) to try and buy a car. The show claims to have found that BMW is blocking its dealerships in European countries from selling their cars to Swiss residents.
What makes this particularly egregious is that although Switzerland isn’t a member of the European Union (they like to stay neutral), it does have Bilateral trade agreements which guarantee free trade with its neighbors. Restricting trade? Under a free trade agreement? Uh oh…
The Swiss competition commission (Comco) said on Tuesday that it launched a probe into this affair. Because the Swiss Franc is reaching new highs against other currencies and the seeming natural concept that Swiss car prices are generally higher than the EU’s, more and more Swiss people are shopping abroad for their cars. The TV expose was merely the final straw that pushed Comco into investigating these allegations.
This isn’t the first time a carmaker has tried to pull a stunt like this. The Financial Times reports about how in 1998, Volkswagen got fined €90 million by the European Commission for stopping its Italian dealers from selling cars to German and Austrian customers. Seems like Europeans still haven’t got the hang of this free trade malarky.
We’ve lived with this crap for years in Canada and don’t see any resolution coming. US pricing is easily 20 to 40% lower than Canadian pricing yet the dollar is almost at par now (~.98). And BMW is the worst offender here too.
Try importing a BMW from the US into Canada and you find out how un-customer friendly BMW is.
Exactly. BMW Canada even publishes a long-winded justification/sample calculation for not buying American (taxes, duties, certification costs, having to pay cash, warranty issues, etc etc.). The only way it might work is if you are a cross-border commuter living somewhere like Windsor or Niagara Falls.
The racket extends to parts as well. Pleading “free trade” probably won’t me very far when I try to drive over the border with a set of coilovers in the trunk.
BMW’s cavalier and arrogant approach led me to eventually import a 911….absolutely without a hitch. Lindsey Duffield (BMW CEO in Canada) basically dared all us wanting to import. They have the RIV and Transport Canada in their hip pocket.
Try importing a BMW from the US into Canada and you find out how un-customer friendly BMW is.
Sure. Been there, done that – peice of cake. Yes BMW Canada is a bit of pain to deal with, but you don’t really have to do so – I actually chose to deal with them as I had concerns about future warranty claims (unfounded since no claims were ever made, but still).
I would venture that both Mercedes and Porsche pricing has an even worse spread then BMW.
That being said, few of them are competitive – and BMWs published “comparison” of pricing is at best a joke.
As is evident from the linked Wikipedia page, Switzerland is not a member of the EEA. It is a member of EFTA and has some bilateral agreements with the European Union that may be relevant for this case.
As can be seen from the linked wikipedia page, Switzerland is not a member of the EEA.
Duly corrected. I got my treaties wrong. I knew there was an FTA somewhere.
Beat me to it.
OT I hope there won’t be any double posts showing up cause some of my comments seem to get lost.
Also, even among members of the EU car prices due to taxes vary wildly. What would happen before is car manufacturers would ‘sponsor’ out of the factory car prices for countries with heavy taxes on cars at the cost of countries with low taxes on cars. For instance, in the Netherlands there still is a huge extra tax on new vehicles, apart from VAT, that is a percentage of the net cost of the car. In Germany, there is only VAT. What some manufacturers would do in the past is sell a car at a lower price to the Netherlands than to Germany. The cost of the car to the consumer would still be much higher in the Netherlands, but manufacturers could play with the margins a little to offer a competitive price, compounded by the tax effect.
That practise is now banned by EU legislation, but it doesn’t mean consumer prices are the same in all countries. The EU DID declare the extra tax on cars in the Netherlands as ‘illegal’ years ago and it’s now being phased out. Of course, the illegal tax is now more than compensated by ‘green’ taxes on CO2 emmissions, which means if you buy something like an M3 you pay tens of thousands of Euros above VAT for your car. A base M3 sedan is listed at 103.185 Euros now (about US$140.000) in the Netherlands, while across the boarder in Germany it is 66400 Euros. The boarder is never much more than 100 miles away anywhere in the Netherlands, but of course if you’d like to import you need to pay all applicable taxes which negates the difference. Also, the nicer the car you buy, the more CO2 it emits, the more you pay, and it will be difficult to afford a nice car in the first place, since income tax is 52% over everything you earn over about 60K I think. Soviet Holland indeed…
Darn, my whole lengthy comment got misplaced…My main point: even without extra tax levies, the consumer price for cars is far from the same in member countries.
A BMW M3 for instance has a list price of 103.185 Euros in the Netherlands and 66.400 Euros in Germany. For those who get their European countries a bit mixed up, yes, these are neighbouring countries, and I happen to live in the more Soviet one of the two. Luckily, for the first time in 100 years we have a ‘right wing’ PM now so maybe some things will change a little bit for the better. I put right wing between ” because what we call right wing here you Americans would still call a bunch of communists.
As was said above, we’ve been living this in Canada for years.
Some manufacturers are preventing US dealerships from selling new cars to Canadians, and are being as difficult as possible in providing the information required to import. A “recall clearance” letter is required, stating that all recalls have been performed. Some manufacturers make it almost impossible to get.
I also seem to recall one restriction (a vague memory, will need to look it up) that indicated that vehicles newer than a certain year had to be equipped with a certified immobilizer system. (i.e. your pretty much universal transponder key.) Some manufacturers, Honda being one as I recall, were simply just refusing to confirm to the Canadian government that US cars had this feature, which they all did.
Also, if you do get it imported, you need to have daytime running lights in Canada. I know the local BMW dealership has been charging people $1500 for the service of plugging into the onboard computer, and changing the DRL setting from off to on.
It’s particularly troubling when very often the car was built in Canada in the first place, then sells for less in the US, and the manufacturer works against you being able to bring it back.
This possibly explains why DRL’s are turned off in the U.S., for several brands of cars….even though many U.S. citizens would welcome the feature and it is very inexpensive to implement. If they included it, the cars would be easier to export to Canada.
A lot of the initial restrictions from the manufacturers have been removed but they are screw you over on the refusal to honour warranties.
Reeks of retraint of trade but I doubt we’ll ever see anything actually done about it….even with the class action lawsuit against BMW, Mercedes et al.
Hey, I recognize that wagon and the police, because this is where I live!
SG on the license plate stands for the Canton (state) of St. Gallen, in Switzerland.
WAKE UP FOLKS... It is the US and Canada governments that will not allow cross border purchases of NEW cars regardless of brand.
Used is OK, no matter how old. So get a friend in the other country to buy a car and resell it to you used a couple days later.
Keep in mind that the car will be hard to resell or trade-in later. It will be metric (kilometers, etc) if from Canada and the reverse if from the USA.
Years ago, a friend brought a Honda Accord to the USA from Bermuda. Being British it drove on the right. You should have seen the stares when it looked like his Golden Retriever in the passenger seat was driving…LOL!
sugarbrie, a car has to be titled in the USA for six months before it can be exported. So your plan will not work. Cars 2008 and newer also have different bumper supports/dampers in the USA this is a major expense, at least on the German cars. I’ve exported hundreds of cars to canada.
Wait six months then…(D’oh). I actually was told this regarding American’s buying new Canadian cars, so it might (?) be doable in a week or so going from CA to USA ???
I saw a small Mercedes B Class tooling around the Washington DC beltway recently. It surprised me at first until I saw the Ontario license plates.
I suppose it may not be importable new or otherwise ??
Is that a rhetoric question?
It’s bound to be a huge PITA, ain’t it. I know it is already hugely annoying to get something like a Mustang here in the Netherlands (not sold officially through Ford in Europe), so with all the legislative issues in the US…If you’d get in an accident with it you can already hear the lawyers gearing up to sue you dead.
Having had a Mercedes B class turbo as a rental car a couple of times (yes, really) I wouldn’t bother. Awful little car. Only redeeming quality was the full length sun roof. Other than that, it handled poorly, was cramped, noisy, slow, transmission shift times could be measured with a calendar, and because you had to thrash it to get anywhere, the mileage ended up being not all that great.
The Corolla I had a couple of trips ago was a much more pleasant car to drive.
While I can’t really see the evil of simply leaving to BMW that which is BMW’s, I guess the meddling in the business of others defect is now popping up even in Switzerland. Too bad, as it was probably the last straggler in the West down that particular road to irreversible decline and irrelevance.
Anyway. A more important point is; a car company involving itself heavily in nonsense such as this, is obviously no longer being run by engineers and car people; but by lawyers, marketing hacks and others too stupid for undertakings as complicated as actually building something of value. And that reflects really poorly on a company like BMW.
All I can say: This can get VERY expensive ….