Curbside Economics: American Cars Cost About Four Times As Much in Switzerland in 1967 Than In The US

The Swiss market brochure for 1967 Chevrolets was interesting to me beyond just the standard disc brakes and Rally wheels. Given my amateur interest in economics, I was intrigued by the prices given. 16,250 SFr for a Corvair 500? 24,000 SFr for an Impala? Just what do those prices mean? But not just in a conversion to the dollar at the time, but in purchasing power, the most important measurement of all, as it determines the affordability (or not) of a car.

So I decided to dig up a few stats and make a chart. Here’s what it means:

Column B is the price given in the brochure for the respective models.  It’s important to note that these cars came standard with a number of options, tailored for the Swiss market, where as we’ll see these cars were all expensive luxury cars. That means standard automatic (most models), HD suspension, disc brakes, and a few other options, depending on the model (power windows on Impala and Caprice). The Impala and Caprice came with the 275 hp 327 V8.

Column C is a straight conversion to US dollars at the 1967 exchange rate (4.332 SFr = $1). That results in dollar prices, which are obviously considerably higher than what corresponding models cost in the US (Column E). That was of course common for exported cars, and includes duties/tariffs, as well as the cost of shipping, etc.

Jumping ahead to Column E, as a point of comparison, are the US base prices plus a round 20% to reflect an approximate value of the options that were standard on the Swiss versions. I did not go look up option lists from 1967; it’s a rough adjustment, and even if it’s off some, it still makes the point: these cars were some 42% (Corvair 500) to 74% (Caprice) higher than US prices.

But that does not reflect what it cost the Swiss to buy these cars in 1967. To understand their cost in purchasing power, I found that the median wage in Switzerland in 1967 was $208/month, at the exchange rate. Column D shows how many months of income it would take to buy any of these cars; from 18.0 months for the Corvair 500 to 39.5 months for the Corvette.

Column F shows the same for US buyers, how many months of average monthly income in 1967 ($500) it would take to buy the same cars. That ranged from 5.3 months (Corvair) to 10.6 (Corvette). This is of course the key and huge difference. The combination of the very strong dollar and the lower standard of living in the ’60s in Europe (which rose very rapidly in the ’70s and ’80s) means that the Corvair cost roughly as much as a Mercedes 220 for the typical Swiss buyer. They were both six cylinder cars with something over 2 liters displacement.

Meanwhile in the US, a 1967 Mercedes 230 cost $4380, or almost exactly twice the base price of a Corvair.

And it means that in Switzerland in 1967, a Caprice or Impala sedan cost roughly about the same (in purchasing power) as the most expensive Mercedes sedan at the time, the 300SEL (not counting the limited production 600).

All this is to point out that American cars in Europe were expensive, prestigious cars up to about 1970 or so. All that began to crumble as a consequence of the rapidly falling dollar starting in 1970, the fact that the Europeans were now building many top quality executive-luxury class cars in addition to Mercedes, and very rapidly rising incomes/purchasing power. And there was also the general perception that the quality of American cars had been deteriorating for some time, especially against the better European cars.

The image and reputation of American cars changed from about that time, at different rates in different countries. Some countries that had no domestic car industry, like Switzerland and the Netherlands, continued to hold American cars in fairly high regard, although they became increasingly more affordable so they were no longer as prestigious as before. In Germany, with its strong car industry and a decided tendency towards automotive chauvinism, American cars lost favor sooner and faster. There continued to be a certain small slice of the market that liked American cars, and sales sometimes rose to considerable levels in times of a low dollar, but the last time that was anything approaching significant was probably in the ’90s or so, when a number of Chrysler/Jeep products were built in Austria for the European market. But those days are long gone, and only a very few models that have a unique appeal like the Mustang sell in anything more thin minuscule numbers, typically through private importers.