Dealers in the U.S. experiencing plummeting sales due to the downtrend in the economy and rising fuel prices are more than happy to sell more vehicles, but carmakers, who rely on the higher margins of vehicles sold in Europe, are fighting to block the practice.
Private imports of new cars have surged in Europe despite the many hurdles individuals need to cover before they can use their vehicles. They also need to have their cars modified to meet European road-safety and emissions requirements, and this can void warranties.
Speaking with the Wall Street Journal, a German saved close to $31,000 on each of the three vehicles he imported – a year-old Volvo XC90 for $36,000, a year-old XC70 for $27,000 and a two-year-old BMW X3 SUV for $27,000. Even after taxes, shipping costs and alterations to meet European standards, he estimates he saved 20% to 30% of what he would have paid to buy the cars in Germany.
Carmakers are fighting back, fining those dealers involved in the private import business but when it comes to second hand cars there’s nothing they can do.