Why BMWs cost more here

In the age of the Internet it's so easy to compare prices paid for common brands of car in Australia and the US — or anywhere else for that matter.

The problem with comparing prices from one country to the next is that it's not always as transparent as it seems. Recently, motoring.com.au received a statement from Piers Scott, Head of Corporate Communications for BMW Group Australia, responding to a request for his views.

We already know the position taken by Audi MD Uwe Hagen and Mercedes-Benz spokesman David McCarthy , but Scott's answer was a particularly useful example of the way a vehicle's specification can clearly affect the landed cost and the ultimate retail price paid by the consumer.

Product specification is not often mentioned or taken into consideration when discussing comparative pricing. Obviously a car that's tarted up in Australia will cost more from the factory than one that's a 'stripper' sold in Europe or Asia or the Americas. This is the essential starting point for Scott's explanation, originally published as a comment for another article on our site.

"From a BMW perspective, the key reason for differences in vehicle pricing with other markets is the difference in standard specification of our vehicles. The standard specification of most BMW vehicles imported into Australia is particularly high by world standards.

"Taking the example of our high volume-selling 320d Exclusive Innovations (the most popular 320d package we sell in Australia), this car costs AU$63,800. Germany offers a much lower standard specification of the same car. The base price is 34,300 Euro. To bring this vehicle into line with identical specification as the Australian model adds 14,300 Euro worth of options, making the total price: 48,600 Euro.

"Based on today’s (extremely high) Australian dollar currency conversion (AU$1 = 0.72 Euro) this would be: $67,500 Australian dollars. Therefore the 320d is actually CHEAPER in Australia when taking specification into account."

In his statement Scott also touched on some of the other factors that influence the car's final pricing in this market — and these are factors reported by motoring.com.au in the past.

"Australia also has some unique differences from other markets. Reasons for price discrepancies therefore also include:
• Australia’s geographic location resulting in higher transportation costs
• Higher financing costs due to longer travel periods
• Australian import duties
• The luxury car tax (in some instances)"

Now we know that Scott doesn't speak for other importers, but Audi has said in the past that its cars are better equipped here than in other, high-volume markets around the world. And if two prestige importers in this highly competitive market are agreed that their respective products must offer more of the niceties the Aussie consumer expects, for a reasonable price premium, can their rivals afford to do anything less?

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