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Old 01-22-2013, 02:50 AM   #21
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Join Date: May 2006
Location: Sydney, Australia
Posts: 1,944
My Ride: '02 M3
Originally Posted by DesiredM View Post
I myself whinge from time to time about it all but I don't think I'm an expert economist, I just don't see why there has to be sure a price increase on so many new cars. Look at Infiniti they have come in Australia pricing their cars as a luxury brand along the lines of BMW, Mercedes and Lexus. They have stated that sales are no where near what they forecasted when they entered the market. What would be the reason for that? Probably in the consumers mind because they have come over with speced up $30k cars from the US and try to sell them for $80-90k.

A whinging person is actually sometimes important to listen to because that person is a consumer...look at why companies like Hyundai, Toyota, and Kia are doing better then ever before in the Australian market? There are reasons behind these facts and figures.
Well firstly comparing BMW to Hyundai, Toyota and Kia is a mistake because you are comparing apples to oranges. Sure they may be all car manufacturers, but they most certainly have different business models and the last I checked.

There are so many reasons as to why i think we have pay higher prices for cars than that of other countries and I won't go into detail because I will be writing an essay. Few points:

- Geographical location (Distance to send a car from Germany to the UK is a lot cheaper than sending a car from Germany to Australia.
- PPP (Purchasing power parity) (Why are things in America cheaper? Simple: They have a higher purchasing power parity than that of Australia and have to cater to 330million people as opposed to 22million people.)
- Import duties, GST, Luxury car tax
- Protected local market (Who would buy a Commodore or Falcon if a 5-series and E-Class were sold at those prices?)
- Supply and demand. (People keep buying the cars so they continue to have sales growth)
- Australia is a damn expensive country to run a business. (They need to make money so they need to cover high wages, the workshop, the showrooms and all the other things necessary to keep the business profitable)
- Australians have money. (The average wage here is quite high and look at how much Australia travel)
- High dollar. Remember when the US$ was around 60-65c. We all weren't rushing over there to holiday nor were we buying car parts? Our dollar is incredibly high at the moment.

I'm not defending high prices, because I would love to pay $80,000 for a new M3 as well but I am just explaining as to why things are expensive here.

Oh and here is your reason as to why Infiniti have not met their sales forecasts: They have no brand awareness and that is not something that can be developed overnight. Like I said with the Commodore and Falcon example, who would buy an Infiniti when you can buy a BMW, Mercedes or Audi? The people at BMW, Mercedes and Audi are not fools and they know how to market themselves and give buyers that perceived value. If anything, the prices of the lower spec models from BMW, Mercedes and Audi are at their lowest in years.

But hey I could be completely wrong and we all might be being taken for a ride.
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