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They can charge what they do because people will pay it. All car companies do that.
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Not saying what they're doing is wrong (it obviously works very well for them), I'm saying their whole angle of catering to automotive purists w/ the 1-series is a farce. It's still something that young urban professionals will hurl themselves headfirst into, so that they can show off to their friends how upscale they look whilst having their iPhone connected and listening to the latest from iTunes.
BMW is no longer about the driving experience and more about how you look driving one, IMO. That isn't to say the cars don't deliver a great driving experience--but that has become secondary to the Armani-swathed consumerism that's attached to the branding of the car.
Among the ppl I know who drive a BMW, there's only one that would even take a remote risk of gunning it in the twisties. The rest like to look spiffy in them while cruising to the local Whole Foods.