This paper studies how exchange-rate regimes affect the pricing and production decisions of multiproduct exporting firms. We develop a framework in which exporters respond to shifts in exchange-rate regimes by adjusting output, prices, and markups. Using detailed micro-level data on the European car market from 1970 to 1999, we structurally estimate a supply-and-demand system and recover product-level markups. We show that transitions from pegged to floating regimes are associated with limited output adjustment, declining markups, and greater markup dispersion. Following the initial decline (8.6% in Germany), markups gradually return to their pre-transition levels within three years. We rationalize these findings in a two-country real business cycle model of heterogeneous pass-through that incorporates pricing-to-market behavior and financial market segmentation. Our results suggest that price setting plays an important role for the cross-border transmission of nominal exchange-rate shocks, and have implications for the muted response of aggregate real macroeconomic variables to exchange-rate regime breaks and nominal-real exchange rate co-movement across regimes.