weak dollar
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RL Lemke
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It really depends on which manufacturer you are looking at. The Toyota, Honda etal have been very successufl at hedging that portion of their non-US produced products. BMW has hedged about half of what they should. VW has done little in the way of hedging their exposure. Ford's PAG lines should be well protected with their US operations.
So, the Euro-Dollar exchange rate is not the predictor of doom, either way.
So, the Euro-Dollar exchange rate is not the predictor of doom, either way.
RL Lemke
New member
Currency hedging is done to facilitate constant (competitive) pricing for a company's entire vehicle line. If Toyota decided to raise the price of the 4Runner because it is sourced in Japan, then the competitive vehicles made in the US would become more attractive to buyers. Do you think Toyota wants to lose market share?
It is a very competitive automitive market out there. My numbers are off a bit but GM makes $250 per car, Ford closer to $500, and Chrysler earns about $750. I have not seen the net profits for other manufacturers.
One interesting additional statistic is that Hummer spends something like $2500 per vehicle on advertising. Of course, this high figure is due to the low sales totals for the Hummer line. But you have to figure that it takes a lot of advertising for men with tiny units (and women that wish they even had one) to buy a POS like a Hummer.
It is a very competitive automitive market out there. My numbers are off a bit but GM makes $250 per car, Ford closer to $500, and Chrysler earns about $750. I have not seen the net profits for other manufacturers.
One interesting additional statistic is that Hummer spends something like $2500 per vehicle on advertising. Of course, this high figure is due to the low sales totals for the Hummer line. But you have to figure that it takes a lot of advertising for men with tiny units (and women that wish they even had one) to buy a POS like a Hummer.
