Back in the 1970s, German car buyers often enjoyed being able to trade their cars in for more than they paid for them. The catch was that the new car was far more expensive than the one they traded, even if it was the same exact car. Because the dollar kept sinking against the mark, German car prices surged year after year after year. Is this about to happen again?

The dollar has been sliding again the last few years, but German car manufacturers have largely held the line on prices. Perhaps they were hoping that the dollar’s weakness would be temporary. Very likely they had hedged against currency swings by buying futures.

But these futures only extend a couple of years into the future, and are probably expiring. So the weak dollar is going to start putting a serious hurt on corporate earnings.

This could explain why BMW had a price hike in March. The changes were small. Destination charges went up by $80, active steering went up by $150, adaptive cruise went up by $200, and some packages went up by $100.

But that prices went up at all mid-year is news when the company is BMW. Detroit raises prices mid-year all the time. Some Japanese companies have as well. In all cases the hikes are usually small, a hundred here, a couple hundred there. But the German companies have generally avoided this practice. Until now.

The vehicle market is extremely competitive, so it’s hard to raise prices. But BMW isn’t in business to lose money. So I expect more price increases from the Germans going forward. They’ll probably avoid large jumps by taking a series of small ones. And you thought BMWs were expensive now…