- Feb 18, 2011
Why cars can cost 3x as much in Australia despite currency parity with the U.S.
Neil Dowling of Cars Guide looked into this huge discrepancy and found several reasons for the disparity. The United States typically purchases 30 million vehicles per year, while Australia buys around one million. Like any product, there's a discount for buying in bulk. Additionally, Australia mandates its own set of emissions and the cost of adhering to those rules is passed on to the consumer. Beyond emissions and volume, Australians are also paying for the cost to bring vehicles down to their distant southern location. All these factors increase the price of a vehicle in Australia, but one of the biggest reasons for the increased cost is taxes.
A Porsche Carrera S would run a U.S. buyer around $88,000, before the inevitable dive into the bottom-less pit that is the Porsche options list. In Australia, that same car costs a staggering $282,800. The Australian-market Porsche is saddled with a luxury-car tax, import tax and a goods and services tax. Those taxes can also turn a $66,230 U.S.-priced Lexus LS into a $191,200 Australian-priced wallet buster.
On the flip side, Australians are getting vehicles that are highly specced. Mercedes-Benz Australia states that the local S-Class is one of the finest you can buy anywhere in the world. The level of standard equipment on Australian vehicles is greater than what we experience on NA-specced vehicles. In addition, the average wage in Australia is nearly $10,000 higher per person, per year. That may not make it easier to swallow paying nearly $300,000 for a Porsche Carrera S but it shows the Aussies are, on average, earning a better wage than us Yanks.