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Money for nothing

AU v US car pricing

Last week the Australian dollar hit a new high against the US dollar. That high was $1.07 for the record. The news prompted to publish an article comparing the prices Australian buyers pay for luxury cars compared to other countries, chiefly the United States.

The Drive article states, “Inflated luxury-car prices are not a recent revelation but a rampant Australian dollar—continuing to break post-float records as it stretches beyond parity with the US ‘greenback’—has many car buyers again asking questions.”

AU v US car pricing

Left to defend the high Australian prices were Piers Scott from BMW and David McCarthy from Mercedes-Benz.

Scott explains, “We don’t put prices up when the currency is weak and neither do we respond immediately by putting prices down when the currency is strong. We have to hedge against these kinds of fluctuations for the customers’ benefit…”

While McCarthy claims local dealers are beholden to higher forces, “The exchange rate we pay for the vehicles, wherever they come from, is set a long time in advance by Stuttgart [the brand’s headquarters in Germany]. That currency price is locked in sometimes a year in advance.”

AU v US car pricing

If you can stomach it, we recommend you read the article in full. It’s an interesting, albeit terribly depressing, read.

The prices shown in the graphics here have been rounded to even figures and are not driveaway. They’re roughly equivalent to the Manufacturer’s List Price we are familiar with in Australia. So, looking at the price you paid for current motor here in Australia, let us know what would you buy if you lived in the States?

AU v US car pricing

19 replies on “Money for nothing”

Most of these cars are close to my heart, and it hurts! Ouch! Anyway, don’t think it would change what I buy if I lived there…except maybe buying the Camaro with the ZR1 engine!

This is interesting in more ways than one however.

I have a friend who earns roughly the same number of USD in America that I earn in AUD in Aus.

I would view a $46k car as quite reasonable, and payments of around $1k/month on a 3 year lease are also reasonable in my book.
My American friend though, views paying USD$46k for a car in America as A LOT, and drives a BMW X3 that cost about USD$32k (used) and runs him USD$300 per month in repayments. He said for $1k/month he could have a Range Rover Sport or something similar, but he would never consider having such “high” car repayments.

Moreover, this friend of mine grew up in Aus just like me.

Comparing dollar for dollar prices is one thing, and sure it’s interesting, but it’s not overly realistic in terms of the way the American market view car prices.

Yep, the reaction from Americans when they see what we pay for cars is, well, priceless. And you’re right, because of that, their value of a car’s worth differs greatly from ours.

At least Australia is cheaper than Singapore as far as cars are concerned!

Indeed Liam.

I saw this line in the article:
“If you can stomach it, we recommend you read the article in full. It’s an interesting, albeit terribly depressing, read.” and it got me thinking.

Check this out:

Yes, that’s almost AUD$140k for a Golf GTI here in Singapore.

So the image in this article that has an AUD$40k GTI and a USD$46k 1M Coupe, should have a third square that says “SGD$60k” with a picture of a Chana Benni hahahaha

Chinese designed and built, 84bhp, 1.3l engine, and 0-100km/h in *UNDER* 14 seconds. I don’t think I could handle such a timeless piece of automotive elegance.

Not that I would buy one, the Lexus LS460 is a standout for me: US$67,000 != AU$191,000.

The typical excuse is economies of scale, US market 12.49m in 2010, AU market 1m in 2010. That’s a big difference when you think about the marketing and compliance costs that have to be recovered.

It’s because the rest of the world is subsidising the American auto industry for years, Porsche up until 2009/10 offered the US 4 years warranty and rest of the world only 2 years, thankfully they eventually came to their senses and made it 3 years globally.
AUS Government taxes don’t help either.

MB and the like are hardly going to rape their buyers with crushing overnight depreciation by dropping new car prices like a stone. What would the implications for their finance divisions be?

Interesting aside my former BIL made mad money on a Porsche 924 after the float of the aussie dollar. Cars appreciated overnight.

Interesting Sweaty. Back in the early-mid 90s my uncle purchased a used 911 from the US for use in the UAE. When he sold it he toyed with the idea of importing it to Australia, doing a RHD conversion and still pocketing a half decent profit. Not bad for a car that would have been 5-6 years old at the time.

Cars? Everything is more expensive here. Just wait until the carbon trading starts… that’s when I start looking for work overseas….

It’s is just pure greed – what this country is best at. There’s no excuse for it.


…And, it’s not just cars.

LOL – I agree with Tiaan’s comment ( which I just noticed while typing this)!!!

Just an example – WHY bother buying a Porsche Boxster here when, for the same price, you can get a 911 Targa in UK (way above a Carrera)? OR, an M3 for the RRP of a BMW 1 Series M Coupe here…

I have to agree with schultzy its all about the taxes we get slugged with that are used to keep an ageing and pointless Australian car industry afloat. Not to mention the pointless ADR’s that cars have to go through just to be released in this country.

Australia could learn a thing or two from NZ who quite happily follow the European standards and hence cars don’t have to be re approved just to be sold in the country adding thousands to the cost of each car.

Protecting the few thousand jobs in the Australian car industry and bailing them out time and again is a joke and luxury car taxes and excessive import duties on competing overseas cars should be scrapped.

Why cars cost more here than in the US
“Basically, we pay more tax,” he says. “There is GST, luxury-car tax and import tax on each car. “That’s the starting point. Australia is a tiny market – we have a one-million a year vehicle market, the US is about 30 million. You get a discount for buying in volume. “Australia is a small market but it is geographically huge and needs similar levels of personnel and nationwide support and service as the US. “Then we have specific emission and design regulations which Mercedes-Benz at the factory has to engineer and comply. We, Mercedes-Benz Australia, pays for that – not Mercedes in Germany. So that gets passed on to the customer. Price differences Honda Jazz 1.5
($A19,190) — $US15,100 (-21%) Mini Cooper S ($A42,850) — $US22,300 (-48%)
Toyota Corolla Conquest ($A24,490) — $US16,520 (-33%) Mazda3 Maxx Sport
($A26,320) — $US20,045 (-24%) Toyota Prius ($A39,900) — $US21,650 (-46%)
Volkswagen Golf 103TDI ($A34,490) — $US23,885 (-31%) Toyota Camry Sportivo
($A33,990) — $US23,590 (-31%) Mazda6 Classic ($A31,750) — $US22,635 (-29%)
Subaru Liberty Premium wagon ($A40,990) — $US25,295 (-38%) Honda Accord V6
($A49,990) — $US27,355 (-45%) Mazda CX-9 Luxury ($A57,015) — $US32,445 (-43%) Toyota Kluger KX-S ($A55,490) — $US34,750 (-37%) Volvo XC60 T6
($A65,950) — $US38,400 (-42%) BMW X5 35i ($A103,900) — $US46,300 (-55%)
Note: Some cars are built in the US. Specifications may not precisely equate.

Wow I’d be getting a 1M for sure at that price. That’s if I wasn’t already driving an M3 or 911.

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