AU$ Exchange rate and car landing cost

[maneesh5880]

Hi,
Here is an interesting scenario.

I booked my car in June when the AU$ = 81 US$ cents. The car will be delivered in November middle (already on the boat) and I assume the AU$ will be somewhere around 90 US$ cents. In any case I suspect a 10% increase in AU$ value against US$ and Euro by the time car is delivered.

My question is that at what time does the dealer has to pay VW for the car and is it paid in AU$ locally or international currency to VW internationally? I mean who makes the profit on the stronger AU$?

Also am I in any position to negotiate with the dealer on sharing this 10% gain between us?

Anyone who has worked with a dealership might know the internal workings and could help me??

Regards

[Big Yellow]

the exchange rate will not have an affect on your negoiated price im afraid. if it was, car prices would be up and down as the minutes roll by every day.

won't happen.

[mikinoz]

The price that the dealer pays is the same, VW keep any profit/loss and don't pass that on to the dealer/customer.

Nice scenario though!

[kryten2001]

Hi,
Here is an interesting scenario.

Most rates - as far as I can recall - for auto/big industry are locked in annually, irrespective of changes in the rate. Kinda like how the big mining firms forward sell resources at a fixed (hedged) price.

You might see the price come down next year... or then again, VW Australia might enjoy a larger margin.

[jettapilot]

It's interesting isn't it.

I deal in imported products and when exchange rates are favourable our customers expect our prices to drop.
Funny thing though, they never encourage us to raise the price when the rates are bad.

The importers carry the losses when rates are bad. The savings when they are good sometimes helps to make up for it.

You will be expected to pay the price you agreed to when you placed your order.

[gregozedobe]

Also am I in any position to negotiate with the dealer on sharing this 10% gain between us?

Would you also be willing to pay 10% more for your car if the $AU had gone down 10% against the Euro ? No ? Why not ? (it's exactly the same principal at work)

[mrcurlywhirly]

Just the scenario i was thinking:

Lets say you had ordered your VeeDub in late September 2008 for delivery in early November '08... the swing in that period was well over 35% on the AUD-USD, while AUD-Euro was around 20%.

If that were how it worked the VW dealer would be demanding plenty of extra cash before handing over the keys. Imagine that, another $10k please for your GTI...

I can picture the customers gerbil faced excitement at seeing their shiny new car, followed by the wrist slashing realisation that its now going to bankrupt them.

I do like the concept in the reverse though!

[whiteVR6]

When VW took over from Inchcape they made a deal with VW Germany that all cars were to be bought with Aus $ . No matter what the exchange rate the price of a car will always remain the same

[maca]

Hey I've just moved this thread to the General Discussion area because it isn't directly related to the Mk5 sections..

Thanks!!