Quote:
Originally Posted by Z K
The cars built in China is mainly for Chinese and other Asian consumption.
It makes no sense to manufacturer the cars in the USA and ship them to China. Labor is cheaper in China and BMW has a bigger profit on the cars as they have a larger margin on the Chinese made cars. It can also be sold cheaper to Chinese customers because there is no import tax on the Chinese made cars.
Try buying an imported car in China... even something as basic as a Toyota Corolla costs 2-3x the cost in China as it is in the USA. That's why Chinese customers who come to the USA think everything is so cheap. You can buy a luxury car for the price of a basic econo car in China!
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chinese labor isnt as cheap as you think..chinese cost of labor has actually been raising substantially last couple of yrs, and US labor wages has been staggnate since 2006 when adjusted for inflation.
Even lot of chinese companies has been outsourcing to countries like vietnam and banglodesh because of the cheaper labor.
Also when you build a car in china you have to share your profits with your chinese partner.
Most businesses prefer to keep 100% of profits instead of 50%. Also these cars are being sold to the rich segment of the population. Rich people in china as just as rich or more rich then people in the United States. China surpassed the united states in the number of billionaires years ago. If you can afford a 100k car, most likely you can afford a 125k car. BMW has enough brand equity to demand those kind of prices, you cant do that with a corolla or chevy.