BMW Australia boss on luxury car tax

By Alborz Fallah
May 31st, 2012

FIND DEALS

At the recent launch of the BMW 318d and BMW 320i, BMW Australia’s managing director Phil Horton described the luxury car tax (LCT) as nothing more than just another tax on Australian motorists.

Mr Horton, who comes from the UK and was previously in charge BMW Middle East, has been at the helm of BMW Australia since February last year and has so far found no real justification behind the LCT’s existence.

“There seems to be no real substance or credibility behind the fact that once you reach a certain price band (you pay LCT), which is now in a relatively low level not just for us but for Toyota and other volume manufacturers” Horton said.

The luxury car tax adds a 33 per cent price hike to vehicles that exceed the current $57,466 threshold. The additional payment is the GST-exclusive value that exceeds the set threshold. Fortunately, vehicles that have a combined fuel economy figure of less than 7L/100km have an increased threshold of $75,375.

Even so, the $75,375 figure is no comfort for buyers of many BMW models (3, 5, 6 and 7 Series as well as X3/5/6), which are mostly affected by LCT. Mr Horton believes the LCT should be scrapped for a more measured approach that focuses even more on fuel efficiency and CO2 emissions.

“Replace it with something which is maybe more focused on fuel efficiency. You then start to steer consumer behaviour towards lower emissions and more fuel efficiency and maybe that will happen over time”.

Despite his dislike of LCT, Mr Horton left his biggest criticism for the Australian federal and state governments, which he described as taking revenue from Australian motorist without much return.

“Quite frankly I think the government in Australia, the way that they tax the Australian motorists, in my perception, (provides) very little return of those massive revenues that they get, in terms of things like improving road infrastructure. It’s a scandal.”

Heads of other European car manufacturers have also lashed out against LCT over the years but given the federal government’s desire to provide a budget surplus, it’s unlikely LCT is going to go away anytime soon.

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Wow, no mention of your own BMW tax, Mr Horton?
- Smart US
  
  Horton is an insult in australian’s face… lunch him
- Smart US
  
  Horton is an insult in australian’s face… lunch him
- Smart US
  
  Horton is an insult in australian’s face… lunch him
- Roundedbrick
  
  Exactly. Why does the the 335i cost $45K in the US but $90K here? Classic BMW tax no other reason. If they sold it for 55K here there would be no LCT.
  - Phil
    
    Most or all of the car brands have a “Classic” tax for Australia.
    
    Hows Toyota?
    FJ Cruiser $46,490 here, $27,705 in USA
    Lexus LS460 $191,164 here, $67,670 in USA
    
    Besides, the 3 series is already sold out here for at least the next 6 months. Who would lower prices in that situation?
http://www.facebook.com/people/Karl-Sass/100000921334936 Karl Sass

I agree that the justification (and starting point) of the LCT is questionable, however it seems a little ironic for the head honcho of BMW to be pointing fingers about ripping Australians off.
- diesel
  
  agreed! but at least with BMW etc, you know what you’re getting for your spend – i.e. a quality car etc, but with the LCT, you dont know what happens to with all the taxes you spend… does it go to roads (answer is obvioulsy no), does it go to infrastructure(ummm, same answer, NO). So is it the lesser of the two evils??
  - http://www.facebook.com/people/Karl-Sass/100000921334936 Karl Sass
    
    It’s reasonable for BMW to charge more for their cars, they use more expensive materials, bigger R&D budgets etc.
    However I still believe that the prices they charge for their vehicles sold in Australia cannot be reasonably justified.
    While I’m not sure where the LCT money goes, it’s probably just general revenue. I’d prefer my money go towards things that benefit the public good (schools, roads etc.) than the exorbitant profits of a foreign owned company.
    - Car2012
      
      It is interesting that you state “the exorbitant profits of a foreign owned company”. Regarding where the LCT money goes, in an around about way all the money ( & other money) goes to subsibising Toyota, General Motors, and Ford to maintain production in Australia. These are all foreign owned companies. Is it a good thing or bad thing that we subsibise these companies, I do not know.
      - http://www.facebook.com/people/Karl-Sass/100000921334936 Karl Sass
        
        Holden, Ford and Toyota (unlike BMW) have made massive investments in Australia and employ many 10′s of thousands in the process. This is in spite of our small population and low import tariffs. Yes they are foreign owned too, but Holden and Ford aren’t making much money to send back to the states anyway. Unlike BMW (and many other brands) who simply price gouge the local consumer while putting the minimum back, relying on the widespread ignorance that anything European is inherently ‘premium’.
        Let’s not forget that, unlike Holden and Ford(Au), BMW manufacture some of their cars in low wage economies.
        Also it’s worth remembering that the LCT isn’t a tariff, local cars have to pay it too.
      - Sydlocal
        
        Holden and Ford don’t manufacture some of their cars in low wage economies? What about South Korea (a fair chunk of Holden’s product line) and Thailand (the utilities plus Festiva and soon to be Focus)? You would think they would be classed as “low wage” as South Africa where the majority of our 3 series models come from.
        
        Note, I am NOT disagreeing with you about local investment by Ford and Holden or the fact that BMW charge a “premium” like many other European brands.
guestspeaker

better standard equipment and a thinner dealer delivery charge will make consumers happy.
ABCDEFG

He speaking through his backside kidding the people to line his company and his pocket with $$$. The Aus luxury car tax is 33%. Yet the BMW M5 costs more than 2 times in Aus compared with the prices in the USA and Europe. AT HALF THE RETAIL PRICE AS AUS, THE M5 OVER THERE GOT TO PAY USA AND EU TAXES TOO. He’s insulting people’s intelligence and mathematics capability.
- George
  
  Obviously it’s gonna cost more to send cars from Germany more then half way across the world, then get import duties and taxs to protect their belovered holden then all the testing and adr’s these cars need to comply for in Australian regs which is rediculous then throw a lct ontop because it’s dearer then most. So really I’d be blaming the government for the price hike compared to the rest of the world! No BMW
  - F1MotoGP
    
    and do not forget BMW and Mercedes got factories in USA.
    - runnaln
      
      Why do you keep defending the rape of the Australian Consumer with stupid reply’s, We are not talking about a few $1K we are talking $100K plus on some models. There is one reason why cars cost so much is Mr Horton an Co take a massive profit, all the arguments are just spin.
      - Phil
        
        Mr Horton was at the launch of the F30 BMW which is already sold out for 6 months. If you have a basic business sense in terms of how supply/demand affects pricing, why would they lower prices when they’re sold out?
      - Doug
        
        Its sold out for 6 months because they choose to limit supply. Again BMW finding ways to charge the Aust consumer more.
  - For The Rd
    
    Its costs around AUD5000 to bring a single car inside a dedicated container from Europe to Aus. Stick 100s of cars on an open boat like they do and the cost drops to a few 100s of dollars so shipping cannot be the reason. I agree these companies are ripping us off but whats even more hard to swallow is the gov knows how much hard earned money we give them via tax yet they keep asking for more. and why not, the politicians dont have to pay those taxes plus they get their cars for free, plus all the massive discounts they get. I’m getting tired of this. Our intelligence keeps getting insulted. What do I have to show for my yrs of hard studying and work? not much when compared to someone sitting on the doll because the gov is running a communist system based on the sweat and tears of hard working men and women.
  - For The Rd
    
    Its costs around AUD5000 to bring a single car inside a dedicated container from Europe to Aus. Stick 100s of cars on an open boat like they do and the cost drops to a few 100s of dollars so shipping cannot be the reason. I agree these companies are ripping us off but whats even more hard to swallow is the gov knows how much hard earned money we give them via tax yet they keep asking for more. and why not, the politicians dont have to pay those taxes plus they get their cars for free, plus all the massive discounts they get. I’m getting tired of this. Our intelligence keeps getting insulted. What do I have to show for my yrs of hard studying and work? not much when compared to someone sitting on the doll because the gov is running a communist system based on the sweat and tears of hard working men and women.
  - For The Rd
    
    Its costs around AUD5000 to bring a single car inside a dedicated container from Europe to Aus. Stick 100s of cars on an open boat like they do and the cost drops to a few 100s of dollars so shipping cannot be the reason. I agree these companies are ripping us off but whats even more hard to swallow is the gov knows how much hard earned money we give them via tax yet they keep asking for more. and why not, the politicians dont have to pay those taxes plus they get their cars for free, plus all the massive discounts they get. I’m getting tired of this. Our intelligence keeps getting insulted. What do I have to show for my yrs of hard studying and work? not much when compared to someone sitting on the doll because the gov is running a communist system based on the sweat and tears of hard working men and women.
  - http://www.facebook.com/people/Karl-Sass/100000921334936 Karl Sass
    
    “import duties and taxs to protect their belovered holden”How ironic. The EU have double the import tariffs we do (5% vs 10%).
  - Doug
    
    While it might cost you or I close to $10,000 to send a car from Germany (or South Africa) to Australia. I would be surprised if it costs BMW much more the $500 per car. So why again back to why the massive premium? Well because the market will pay that much. Because we used to pay it back when the $AUD was close to 50 cents to the $US. Its just sensible business from BMW to charge us more.
    - Oldboy
      
      Sensible for them, stupid of us to buy them. Until Australian buyers start a boycott and don’t buy any “luxury” car for 3 months or so, it won’t change.
      Alternately the government could change the law that prohibits us from buying overseas and importing. No competition = rip off.
      The more people discuss it on forums and magazine and newspaper columns the sooner some changes will happen.
- Car2012
  
  It appears that you have an issue with the cost of a BMW M5, and thereby Porsche, Ferrari, and any other car above $57,000. Porsche is usually 3 times the USA price. Thereby would it not be a good thing not to have LCT, so as to have a lower cost? For a $250,000 car the LCT is $63,500.
  - Bob
    
    The LCT is more like a voluntary contribution than a tax. If you want to buy an ostentatious, overpriced luxobarge that screams “I’ve got more money than you!” then I think it’s quite reasonable that the Oz Government should get a cut.
    Does it cost more to ship a car from Europe rather than Asia? Well yeah, maybe a couple of hundred. Make no mistake, it’s not taxes – it’s gouging.
    - davie
      
      Down with the bourgeois eh komrade?
    - Glen_gaspar
      
      BOB, I think you’ll find that already get a cut each month…when my employer deducts income tax from my monthly wage……
- F1MotoGP
  
  When you got you pay check and you think car is cheaper there before you can buy that car you should compare everything from insurance, petrol price (EU over $2/L), health cost, wages (in USA is lower), cleaner air,……etc list is long and you realize that overall we are better off. If I do not like the over priced EU cars than I buy something else just like if is Honda too expensive for me I look somewhere else, than guess what Honda dropping prices because they loosing customers.
  - For The Rd
    
    The salaries for professionals in the US are certainly not lower. Good example is engineering, engineers are probably the most underpaid and underrated professionals in Australia. An eng grad in the US will start with at least 30% more salary plus less taxes than here and standard of living is cheaper there. Also a professional job in the US comes with health benefits etc. Houses are cheap (though annual tax is higher) and shame you can’t get a decent meal outside the main intellectual cities. Yes it costs more to get your degree but the payback is fairly quick once you start working. And even in the current environment, there are no shortage of jobs if you have specific skills. Why I won’t move there? I like the Aussie lifestyle, but its being ruined by incompetent politicians who want to mask their own shortcomings and, inabilities and greed
    - Phunken
      
      Because the US growth is all on the back of cheap illegal immigrants.
LOL

He has lost all credibility. He would fail grade 1 primary school maths.
Hate tax

Everyone quick to jump down bmw ceo’s throat, then why is then that a Holden ss is cheaper to buy in nz then aust and it has to get sent there?? Let alone every other dam car. Beause Australia is a bloody rip off for trying to sell a product in. Tax for freaken everything. Carbon tax ring a bell.
- Drac
  
  You can get an SS commodore for less than $40k by shipping it from NZ? Because that is what you pay for it here.
  - Splatcat03
    
    DRAC: That is not what he is saying. He is saying that despite the car being shipped to NZ, the list price of the same car in NZ is cheaper than here in Australia.
    - Drac
      
      Yes but my point is the list price in AU when it comes to Falcons and Commodores is bs and everyone (should) know that. Is the SS really less than 40k over there?
      - Birty_B
        
        List price for a SSV Auto in NZ is $71,590, coverts to roughly $55,700. List price for same car in Australia is $57,290.
      - Oldboy
        
        Surely that gives the NZ local car suppliers a case for dumping claim against GM IE exported price below the price from the country of manufacture? Maybe different rules in NZ.
Funk_docta52

What this guy is not telling people is that if his cars weren’t so overpriced in the first place, then you would be paying less luxury car tax, as it would be calculated on a smaller amount.

That being said, I think that BMW have been improving with their medium to lower end cars in terms of competitive pricing, but the rest of their range is still outrageously priced. A $230,000 M5 has about $40,000 of luxury tax, but even at $190,000 it is still ridiculously expensive.

I hope that the Coalition abolishes this tax when they win power next election, but i’m not holding my breath.
- Golfschwein
  
  The coalition invented it, so don’t hold your breath.
  - John
    
    Are you sure? I thought it was the Hawke or Keating Labor government.
    - Showtime
      
      The Luxury Car Tax was introduced on 1 July 2000 under the Howard government. It was introduced with the GST.
      - John
        
        Well, there you go. I stand corrected.
    - Captain Nemo
      
      Doesn’t matter which party introduced it. None of the morons from either parties in Canberra will get rid of it any time soon.
Plastic Spacemen

BMW prices are a joke in this country… If he backed up his critism with a 30% price cut I would applaude him.
- F1MotoGP
  
  ..than who would by Ford and Holden? A $60T car would cost only $42T.
- Sydlocal
  
  Don’t just single out BMW in this, you can pretty much insert any other “premium” European brand and still be correct!
  - Phil
    
    Don’t single out “premium” European brands. What about the Japs:
    Lexus LS460 – $67,630 in USA, $191,164 here or
    Toyota FJCruiser – $27,705 in the USA, $$46,490 here.
    - Oldboy
      
      Interesting to note there are some cars sold in the UK/USA for example that come here at around the same price or cheaper, yet others are 2 and 3 times overseas prices.
      A case in point is the Toyota Landcrusier ( large one).
      GBP about 61,500 V8TD ( 100k aus) US about 78,000 Petrol only offered, and Australian price About $88,000 for the V8T Diesel. Shoots a hole in the tax/duty/ ADR theory. Info from Kellys blue book USA and Auto Trader UK.
      - Phil
        
        Landcruiser is a bad example. That US$77K model is a single model range and is spec’ed up beyond our top of the range $113K ‘Sahara’ model including a 287KW 5.7 V8 instead of our 224KW 4.6.
        The real comparison price for the US$77K USA Landcruiser would fall somewhere between our $113K Sahara version and our A$140,990 Lexus LX570 (which is only US$80K in the USA).
Splatcat03

The guy has a point. The luxury car tax should be renamed to the green with envy tax.

The guy also has point regarding motoring revenue and its use. Considering how much money governments make through rego, tolls, Petrol taxes, Stamp duty, LCT, and traffic fine revenue, our roads should be amongst he best in the world. Instead, we have roads that would not look out of place on the surface of the moon.

Clearly there is some price gouging going on from the car companies, but a lot of the cost is taken up in govt taxes. Take an Audi S4 for example, list price is $106,184 (which would include the import duty of 5% plus 10% GST on Customs value of car, Import duty, and shipping costs).
Dealer Delivery $3973 – Not unreasonable and inline with how much it would cost to ship the car across yourself.
Luxury Car Tax: $15,807
NSW Stamp Duty: $5400
Total: $132,331
Dave S

‘Horton believes the LCT should be scrapped for a more measured approach that focuses even more on fuel efficiency and CO2 emissions’

This sounds like: (1) BMW trying to push more diesels onto out market. We should be using more LPG. (2) Manufacturers, spending weven more time trying to reach unrealist fuel consumption figures which cant be replicated in real world conditions.

BMW cant have it both ways. Telling us how they ‘up spec’ their models to make them b etter value, then complain how the LCT makes cars so expensive!

At the end of the day, the LCT applies to all cars, not just imports.
bbb

Dear BMW Aust,

Can you please price cars here just like the USA so we rarely have to pay LCT?

Your average Toyota driver.
Themenz

The LCT is a joke, but take that away and it is still going to cost you close to $145K to get an M3 for example.

The outlandish prices we seem to pay comparatively is even more frustrating. I get we are a small market, I get we are long way from Germany, but $4k dealer delivery…. seriously that on its own is a joke.

And $7k State stamp duty. I mean honest to god we are just taken for a ride.

E92 BMW M3 Coupe

US price MSRP – $62,900 on road

Australian pricing

Manufacturer’s Recommended List Price (1)
– $132,492.00
Recommended Dealer Delivery (2) – $3,850.00
Luxury Car Tax (LCT)
– $23,662.80
NSW Registration Costs – $498.00
NSW CTP – $546.74
NSW Stamp Duty – $7,105.00
Recommended Drive Away Price – $168,154.54
Themenz

The LCT is a joke, but take that away and it is still going to cost you close to $145K to get an M3 for example.

The outlandish prices we seem to pay comparatively is even more frustrating. I get we are a small market, I get we are long way from Germany, but $4k dealer delivery…. seriously that on its own is a joke.

And $7k State stamp duty. I mean honest to god we are just taken for a ride.

E92 BMW M3 Coupe

US price MSRP – $62,900 on road

Australian pricing

Manufacturer’s Recommended List Price (1)
– $132,492.00
Recommended Dealer Delivery (2) – $3,850.00
Luxury Car Tax (LCT)
– $23,662.80
NSW Registration Costs – $498.00
NSW CTP – $546.74
NSW Stamp Duty – $7,105.00
Recommended Drive Away Price – $168,154.54
- Turbo99
  
  “US price MSRP – $62,900 on road” and that includes the US taxes/fees/charges too.
Themenz

The LCT is a joke, but take that away and it is still going to cost you close to $145K to get an M3 for example.

The outlandish prices we seem to pay comparatively is even more frustrating. I get we are a small market, I get we are long way from Germany, but $4k dealer delivery…. seriously that on its own is a joke.

And $7k State stamp duty. I mean honest to god we are just taken for a ride.

E92 BMW M3 Coupe

US price MSRP – $62,900 on road

Australian pricing

Manufacturer’s Recommended List Price (1)
– $132,492.00
Recommended Dealer Delivery (2) – $3,850.00
Luxury Car Tax (LCT)
– $23,662.80
NSW Registration Costs – $498.00
NSW CTP – $546.74
NSW Stamp Duty – $7,105.00
Recommended Drive Away Price – $168,154.54
Guest

Aussies are far better off than Malaysians. We get taxed more than 100% for BMWs.

Goodness knows where the money goes for that.
Guest

Aussies are far better off than Malaysians. We get taxed more than 100% for BMWs.

Goodness knows where the money goes for that.
Guest

Aussies are far better off than Malaysians. We get taxed more than 100% for BMWs.

Goodness knows where the money goes for that.
- For The Rd
  
  Sadly your corruption levels there are also 100% higher then ours here
- For The Rd
  
  Sadly your corruption levels there are also 100% higher then ours here
- For The Rd
  
  Sadly your corruption levels there are also 100% higher then ours here
- LOL
  
  Malaysia? I LOL’ed
- Oldboy
  
  I wouldn’t be so sure about our corruption levels being so saintly here either, Im certain a lot of cosy deals are done at high levels in Australia.
JD

utter bs

half the cars in the BMW line up are under the LCT threshold in the us. A BMW 3 base retails around 30k there and 60 k here.

LCT does not make a significant impact on car prices. Even without the tax, why is the list price so high.
JD

utter bs

half the cars in the BMW line up are under the LCT threshold in the us. A BMW 3 base retails around 30k there and 60 k here.

LCT does not make a significant impact on car prices. Even without the tax, why is the list price so high.
JD

utter bs

half the cars in the BMW line up are under the LCT threshold in the us. A BMW 3 base retails around 30k there and 60 k here.

LCT does not make a significant impact on car prices. Even without the tax, why is the list price so high.
Turbo99

He thinks we are 5 year old kids. Can some one dig out his education background? Like whether he’s got a degree in mathematics.
- MM
  
  He’s probably maths illiterate.
Oldboy

Great comments many hit the mark. The whole problem revolves around parallel importing policy IE no one but the approved company (in most cases the manufacturer) can import that car, new or used. Closed shop.
No competition = Rip offs.
Every other industry has been sharpening their pencils but not those car importers. They are doing all they can to make their cars reach that LCT threshold, then blame the whole thing on the government.
Boycott buying any new Euro cars for 3 months and they will fold.
- Antrio
  
  And herein is where the problem lies. Until we stop buying these cars at inflated prices nothing will change. Why would these Euro companies drop their pricing while people are prepared to pay a premium. Until this happens I refuse to buy them.
DJ

What is considered a ‘luxury’? And why stop at cars? take these as a few examples:.
If i don’t have money to buy a car, then i would consider all car owners to be well off. And therefore all cars are considered to be a luxury if you have to rely on public transport or pedal power.
If I can’t afford an iPhone, is it considered a ‘luxury’?
Average house price is somewhere around the $4-500k mark, so anyone who buys a house beyond $550k should pay a luxury tax.
Any piece of clothing above $50 should have a luxury clothes tax given that you can get most things at Target, Kmart or St Vinnies for less.
Luxury is all about perception.
DJ

Attacking BMW because it has a high margin on its products is not the point here people. If this was the case, then all mortgage holders should be taxed given the banks make huge profits.
- Phunken
  
  Ummm flawed argument. Its like comparing apple and orange.
  Mortgage holder are paying huge tax, its called council revenue etc. Houses is an investment that has the potential to grow, whereby a car is not so therefore to pay more than what is worth it is a luxury.
Oldboy

Not really DJ. We can borrow our money from any bank, local or overseas, but there is only one importer of BMWs ( and all the others) to this country and thats the problem.
aussie made and proud

its simple really, we have the natural resources here, the highest levels of education yet we import all of this technology. lets get rid of the stupid unions that are crippling our competitiveness in the market place and start manufacturing quality product in house
Altezza

While I agreed on Mr Horton’s comments on ridiculous LCT, however if Federal Government removes LCT (which won’t happen), BMW cars still overpriced…and we’re further ripped off by list of extensive options. The new 318d and 320i should have been at least $10,000 cheaper or more.
Daniel Dacey

Mr Horton we have this thing called the internet. We are all well aware of the markups that your company puts on cars bound for the Australian market. Your company will in time either adjust those prices to a more competitive level or suffer lost sales. Scrapping the luxury car tax might get you some breathing space for a while, as those desperate for the badge, take any discount you offer (at the taxpayers expense), but in the end the only long term answer is to bring BMW prices in line with other markets.

Simple really.
- Damian
  
  Suffer lost sales? BMW, Mercedes, Audi, Lexus all adjust their price relative to demand. They simply don’t see a need to adjust their prices to compete with lower tier vehicles, because brand equity alone is enough justification to charge more.
  
  Furthermore, you need to refrain from being so insular and narrow-minded. We’re not being charged that much when compared to the likes of Singapore, Malaysia, China – countries that are closer in proximity to Australia than the US (which has ten times the population).
  
  If you can’t afford one or don’t like the pricing structure, don’t get one. Simple, really…
  - Oldboy
    
    Thanks Damian from all those people who would really like some choice in their motor cars in Australia. We are not living in Asia but we keep hearing our politicians and local car bosses say we have one of the most completive car industries in the world… only 5% duty.
    At least Singapore and Malaysia, who do have huge import duties (of up to 100% I believe), are honest about it.
    We talk tough, but we are not competitive here because our pollies have created an environment where they don’t need import duty to create a high cost car environment.
    They just construct the situation where business can charge what they like by prohibiting any competition (specifically the “no parallel import policy”).
    In the Asian countries case their government gets the duty/tax from any imports.
    Under our structure, we allow the multinational car companies to cream it off.
    Not smart.
    - Damian
      
      The old saying that ‘beggars can’t be choosers’ rings true in this context. You make it as if there are no other cheaper and viable alternatives besides the more prestigious brands.
      
      If you can’t afford prestige, there are the more affordable alternatives such as a Mazda 6, Honda Accord Euro or Suzuki Kizashi, which offer value for money and go a long way in emulating their European counterparts.
      
      Whilst I agree with your objection towards the ‘no parallel import policy’, it’s understandable why manufacturers sought this, given the Australian Government’s backwards insistence that imported vehicles comply with our unique, but senseless ADRs. The upfront investment manufacturers make to comply with these regulations must be offset by high prices, which the market is willing to pay.
      
      The only way to stop high prices is if the market boycotted prestige imports for a period of time. We all know the unrealistic likelihood of this happening.
  - Phunken
    
    Damian the argument here not who can afford it as your elitist comment might trigger a cheap counter argument for BMW, but that of Mr Horton insight into the LCT. The taxes in country like Singapore and Malay are 100%(to deter population from buying cars due to small road and infrastructure) whereby here is 5%, and country like China try to promote their own cars therefore inflating import cars as deterrence.
    What need to be address is the hike in price from BMW and Audi and Merc is more than LCT. If they want exclusively than they should be grateful for the Tax so therefore only a small clientele could afford which goes against their growth plan. And even luxury car owners would question the price difference.
NM

I little input to this debate on how everyone says that the german manufacturers (BMW??) rip australians off with the pricing

Do your maths guys:

Price (Manufacturer List Price) in Germany (Source: BMW Germany website)
320i Auto Sedan: EUR 35,360 = AUD 45,968 (approx current exchange rate of 1EUR= 1.30AUD)

Price (Manufacturer List Price) in Australia (Source: BMW Australia website)
320i Auto Sedan: AUD 57,600

I would not know the logistics costs i.e export duties in Germany, transportation costs, import & customs costs in AU. However, a major portion of the price difference of approx AUD 12000 would be used to cover the abovementioned expenses if not completely.

Regarding the BMWs being cheaper in US. Everyone please note that BMW USA have their own Manufacturing facility in South Carolina which caters to the demand of the entire US of A.

Hope my little input clarifies the doubts of many people.
- Devil’s Advocate
  
  Don’t forget also the extra engineering required for the vehicles to meet our unique ADRs has to be spread over a relatively small volume. From what I gather the importer is the one who pays for this (in this case BMW Australia). Still doesn’t fully explain the difference, but it does adds a few $$$ to the cost.
  - Phunken
    
    Umm all manufacturers “extra engineer” to meet ADR not just BMW so that still doesn’t explain the extra $…
- Splatcat03
  
  To add further. BMW Australia will pay 5% import duty on the $45968 AUD which takes the car to $48266 AUD. They then pay 10% GST on the customs value plus the import duty plus the shipping costs. So doing the maths :
  
  Cost of car in Australian dollars = $45968
  Import Duty of 5% = $2298
  Shipping costs = $3850 (Dealer Delivery)
  Cost so far = $52116
  10% GST = $5211
  Cost of Vehicle to import = $57328 (Rounded off)
  BMW Australia RRP = $57600
MK

And the Beemers come from South Africa.
bill

actually, someone made a good point in a previous article. manufacturers can dictate demand by adjusting the markups so that demand is in-line with supply. having said that, this means there are a lot of idiots that dont recognize value and just throw wads of cash because of the badge
PeterG

Why not ask Kevin Rudd why the first thing he did was increase the LCT.
The tax serves many of Labor purposes It offsets the cost of subsidies to local makers and keeps them running albeit inefficiently It raises more tax than the subsidies .More money to spend…and wasteIt promotes the Labor Robin Hood approach .The traditional Labor voter thinks the “rich” should be scalped.Problem is that Labor voters are more aspirational and not so traditional.Just ask the tradie with $70k FPV ute.BMW is relatively cheap in the US because the US build cheap alternatives.If that happened in Oz and the LCT was in place BMW would be out of business.
JamesB

320i for American M3 money. Screw you Horton!
nugsdad

Well I called this guy what was apparently considered a demeaning name and got my comment pulled. Censorship at work simply for calling him a circus worker.
Car Fanatic

They pulled your comment because you’re a St George supporter.
- nugsdad
  
  very good I’ll pay that
Phunken

Wow, how about explaining why a M3 is a hundred grand more than the USA price. BMW has already inflated their imported products. Most manufacturers decrease their prices to underscore the tax in response to get customers in.
Failed, try again Phil.
MileAman

Would conversing from right-hand to left-hand-drive scheme in Australia lower the prices… would we then see prices anywhere close to that priced in U.S.?
- Oldboy
  
  Have a look at prices in the UK V Aus, and you soon discover that’s not the issue.
  No parallel import law = rip offs.
Clarksnow1

Everyone is missing the point here. Forget LCT, forget import duties, forget GST, forget the freight arguments, the biggest issue is the new car industry lobbyists in nineties who lobbied for parallel importing restrictions and had grey import restrictions.
Why cant I buy a right hand drive C55 AMG from Japan for $72k USD or same from UK at same price new or even a second hand one from Japan 2 years old for $50k. Unless I have lived in either of these countries for 2 years and personally owned the vehicles, I cannot do this.
The car industry (spelt new car industry) has lobbied successfully to ban parallel imports over spurious safety issues. The luxury cars in the UK and Japan like the C55 AMG or M3 come out of exactly the same factories and their safety standards are in excess of Australian minimum standards.
If one monitors the Federal Governments Grey Import list you’ll see how new models like the GL55AMG have been added in last year, when it wasnt on the list 2 years ago. Manufacturers do this, it is anti competitive, but the government allows it.
Lobby politicians, send a drafted letter to all Federal MP’s, send one to the ACCC, it is anti competitive and is exactly the same issue that the industry had with CD’s all those years ago, lift the grey import ban and bingo much lower prices.
New care industry will lobby heavily against it saying its a massive safety issue. This problem can be solved by getting one of hundred’s of authorised engineers to compliance plate. If the vehilce you import exceeds Australian standards, then compliancing is not an issue. The new car industry will also not cover warranties. So what I say, take the risk and get it done at a European specialist and guess what dont buy your parts from BMW, Mercedes or Audi Australia, but them off the internet from US BMW, Mercedes or Audi suppliers, they are a 1/3rd of the price. 95% of the parts are common, except for particular left hand drive differences.
Lobby all Federal MP’s. The New Car Industry has lobbied an extremely restrictive practice, e.g.: Grey imports. Let the Australian people choose how they buy cars as the masses are doing on the internet with clothes etc. dont us let us be ripped off anymore. The New car industry arguments are an insult to the intelligence of most Australian’s and most car journalists accept it. if they didnt then car companies wouldnt give them new cars to test drive, there is a massive conflict here.
Oldboy

Clarksnow1 there are quite a few of us who agree 100% with you and we have been bleating on about it for years, see my comments above months ago. I agree with the ACCC approach, there has to be a case, and if you want some support let me know, I’m sure there are thousands of us who would be prepared to kick in. ( Where are the RACV/Q/NMRA etc representing motorists?)
Running parallel there needs to be an awareness campaign about a potential boycott of all “luxury” vehicles by new buyers.
As the word of an ACCC launch gets going, anyone who thinks of buying a new car will wonder what it might be worth here if the anti competitive case is successful.
Stop buying any new $50k plus cars for 3 or 4 months and see what this does to the manufacturers Australian pricing structures. Personally my boycott started a couple of years ago; I can’t believe the importers/ manufacturers are still getting away with it.
- Clarksnow1
  
  Thanks for your feedback. btw I meant C63AMG not C55AMG. Again I think RAC/NRMA are part of the plot, dont speak out. I have seen RACWA articles about the same thing and they look as though they were written by BMW or Mercedes.
  I think the big issue will be a lack of complacency by government, as they have bigger issues, but hey save $100-$150k on a car, the saving can go into a mortgage etc. People will have more spare cash and lets face it the protection of the local car industry is minimal now (except for Julia’s $100m + handout a few months ago).
  The only way to do this and do it correctly is to establish a fighting fund/ lobby group. Appoint a key Canberra Lobbyist group, structure a well articulated letter or position paper, email it to every Federal Politician and every mainland Australian Newspaper as well as lobbying at the highest level within the ACCC.
  - Clarksnow1
    
    and then get a Senate Enquiry
- Clarksnow1
  
  So how do we start a campaign on this to get the ACCC’s interest and get a senate enquiry, dont even get me started on car parts 300% more than US, higher insurance costs, less money in peoples pockets. There is a plethora of rippoff’s from Overseas manufacturers of most commodities, other than stuff that you can buy easily on internet.
  
  who in this forum can craft a cunningly good position paper, well researched, articulate and able to stand up to challenges????