Exchange Rate Cuts Revenues For Euro Firms

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BMW's automobile deliveries last year grew 9.2% to 1.5 million units; motorcycle sales grew 2.4% to 102,000 units. However, although unit sales are up, the dollar/euro exchange rate has wreaked havoc on returns.

BMW says unit revenue decreased by about 40 percent during the past six years — simply because of unfavorable exchange rates.

For instance, at the beginning of 2002, when the dollar was listed higher than the euro, a BMW 5 Series model sold in the United States for $50,000 translated into sales revenues of €55,000. Today a 5 Series sold in the U.S. for $50,000 brings in as little as €32,000. That means BMW receives €23,000 less for a product that is drastically improved.