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Australian Bike Prices - A rant

Discussion in 'General Motorcycling Discussion' started by [FLUX], Jan 13, 2008.

  1. In this modern age, I'm increasingly boggled by the price disparity between the same bikes being sold in Australia as in the USA.

    Now, in the USA, the +ORC portion is about the same as in Australia. In the USA, sales tax varies from state to state - from as little as 0%, to as high as 10%, and when you see a price for a bike in the USA, it's minus any sales tax. In Australia, we have GST which is included in the price, so therefore to get a comparible base-line USA price, minus ORC, we would just add 10% to the USA.

    I'll cite just one example though. The Ducati 848

    Australia: $21495 AUD
    USA: $12995USD

    Now, add 10% to account for GST, and divide by 0.89, to covert from USD to AUD, we arrive at a value of $16060AUD

    Eh? The 848 costs $5435 more in Australia than the USA.

    Can someone explain to me, why? No, I don't mean any smart-arse answers, or lame-arse answers regarding keeping second hand bike-prices high. I mean an honest to goodness answer as to why a newly released model, released at a time when the Australian dollar has been steady at 80-90c USD value for the last 18 months, with costs of shipping from Italy to the USA, and Italy to Australia NOT adding up to $5500 difference, just why are Australian's being ripped off to that extent?

    Take the Triumph Daytona 675 as another example. People in the USA will walk out the door with one, meaning on the road in states that are charging 8.5% sales tax, for $1000USD on the road, or around $11230. Also, Triumph dealers in the USA are prepared to do deals.

    In Australia, the best you'll get, out the door, is $15800, and that requires twisting and arm an a leg. Most dealers won't budge from the regular $16300-16500 out the door price (depending on the State you're in).

    What gives?

    Japanese 600's (super-sports). Most can be bought in the USA, on the road, for $11000 Aussie equivalent.
  2. One thing you're forgetting is shipping costs. Italy to USA is far cheaper than Italy to Australia. Add into the equation, the much smaller market in Australia, and some of those costs are accounted for.
  3. Volume discount?

    USA distributor orders 1000 units of the 848's, Aussie distributor orders 50 units and has far less bargaining power, as well as far less priority when time to ship the first batch out of Italia comes around. Keep the big customers happy first, worry about the little fish when you have plenty of supply, maybe next month, or the month after that......

    Another possibility is that the USA has a factory owned distribution setup. Australia has an independent distributor, who must add on their own margin to the bike when it gets here. If the USA has a company owned distributor then they need not add a second margin to what they get for the bikes. Of course, they would, but it would not need to be anywhere near what an independent distributor would need to make the business viable.
  4. Not being smart, but this is a tiny market, and some models are just not brought here at all, because they wouldn't sell in enough volume to make the process viable.... We like to think that as a first world country, we should have first world choices, and scope of choice, but it just isn't sustainable.
  5. One excuse I've heard is that purchases of the bikes by the importers are made far in advance, so an increase in the AUD won't make a difference.

    Another I've seen (from BMW in particular) is that the importers will often buy foreign currency to buy bikes in advance, so again, increases in the dollar won't make a difference. But with this, the AUD has just been going up and up for quite a while, so the continuation of this practice doesn't seem to make much sense.

    Also, while our market is small, it has been growing quite a lot recently, and that doesn't seem to be making a big difference in prices.
  6. import taxes as well?
  7. Simply because that is what the market is used to - $7k CBR250s, Anyone?

    Interesting article in TwoWheels or AMCN a while ago about the process for importers to gain aussie compliance - and (stating the obvious) when a luxury (could argue a post-$20,000) bike will only sell a handful a year, it seems silly to jump through all those hoops when other continents can sell x^3 upwards of the same bike

    AFAIK, the most viable reason for NZ vehicle standards being almost a mirror of ours - less hoops. (From my extremely brief understanding of NZ standards)
  8. I hear what you guys are saying, but take a look at the price differences of base-model or naked bikes, and it's more like a $2000 price difference.

    If there are bulk discounts available, or shipping costs THAT much more, then why aren't those costs reflected in the cheaper (<$8000) bikes as well?

    eg. The Triumph Street Triple RRP of $11990 AUD in Australia
    The equivalent USA price is RRP $9900 AUD equivalent

    Just a $2000 difference.

    Okay - so a naked version bike costs just $2000 AUD more in Australia than the USA, or a base of 20% more.

    None of that explains the $5500 greater price of the Ducati 848, or Daytona 675.

    If you're going to argue that shipping costs are higher, blah, blah, blah, then please attempt to tie THAT into your argument.

    Not having a go at anyone here. Your answers are well reasoned, but more or less what I expected to hear. However, the answers are all indequate to explain differences like in the Street Triple example above.

    Another example?

    USA => $8800 AUD equivalent
    AUS => $11300 AUD

    $2500 more for the Z750 in Australia.

    Given that, it would seem to be fairly consistent to argue that it costs around $2000-2500 more to bring a bike to Australia than the USA.

    Still doesn't explain $5500 difference though, does it? It's not due to import taxes either.
  9. its called "supply and demand"
  10. Uh, that'd mean the opposite of what we're seeing.

    Prices go up when demand outstrips supply. Supply is not a problem. Walk into any (larger) showroom in Australia and you'll find these bikes, and you'll also find dealers not willing to move on price much at all.

    I have other words for it, that I think is more apt.

    Collusion. Cartel. Price fixing.

    It's not just bikes, it's all sorts of good. I can import full exhaust systems from the USA, landed on my doorstep, for less than half of what they sell for here in Australia.

    Don't try to tell me that the Australian market is "too small" either. Our population is 21M people now. California has a population of 37M people, and has explicit vehicle standard requirements that require the fitting of additional Californian equipment, and restrictions that go far beyond the ADR rules for Australia. In essence, to sell a bike in California is a very different affair to selling one in the rest of the USA. If we want to draw parallels, California would be a good place to start.

    Thing is, bike prices in California are consistent with the rest of the USA.

    It isn't supply and demand. It isn't the cost of getting the bikes past ADR regulations. It isn't the cost of shipping, and it isn't the cost of selling to a "small market".
  11. Okay, some more figures to munch on.

    USA total annual motorcycle sales are in the order of 1,100,000 bikes.

    Australian annual bike sales are around 130,000 bikes.

    The USA has around 290M people (not counting illegal immigrants - which is estimated to be as high as another 40M people on top of that). Australia has 21M people.

    Australians, per capita, buy 63% more bikes than the USA's official population.

    i.e. The effective buying power of the Australian marketplace is equivalent to ~34M US people.

    What was the population of California again? 37M people.

    Once again - what gives?
  12. This is an article found on page 10 of AMCN vol 57 no 11. So credit to them for writing it.

    The motorcycle industry has responded to consumer calls for cheaper retail pricing, claiming Australian importers are reaping the benefits of strong buying power without passing the savings onto the consumer.
    Australian motorcycle importers expressed a unanimous response to the claims, saying that pricing stability encourages consumer confidence, doesn't damage the resale value of second hand motorcycles and allows them to absorb rising costs when the dollar is weak.
    "BMW as a group hedge a fair bit of forward exchange," said BMW Australia's corporate communications manager, Alexander Corne, "meaning we buy euros with dollars in advance. Sometimes this works for us and sometimes this doesn't - but it tends to iron out the fluctuations of the Australian dollar."
    Pricing is determined at the start of the model year and manufacturers say it would be bad business sense if prices fluctuated throughout the year depending on exchange rate.
    "It would upset someone that paid more for a bike the month before," said NF importers Craig McMartin. "We look at the exchange rate at the start of the year and try to forecast an average. This is how we've done business for the last 40 years.
    The industry agreed that the exchange rate is only one factor among many that are considered when determining Australian pricing.
    "Other factors include arranging units to conform to Australian design regulations, interest rates, storage costs and freight, explains Yamaha Australia's Sean Goldhawk.
    BMW's Corne said "You'd be reluctant to change pricing as per the exchange rate. When the dollar is strong the price doesn't decline. But when the dollar is weak, it doesn't shoot up, either."
  13. Im with flux on this one. I can understand why the pricing should be a little dearer but on most items the difference between our prices and a lot of overseas prices is unjustifiably high. I honestly believe the industry big shots are seeing how long they can screw us for until there is an significant uproar. Why would they lower prices when nobodies complaining about the current pricing? They are not going to pass on the option with the most dollars.
  14. Yeah. I've read that before. It reads like carefully worded "spin" to me.

    I don't think anyone really has a problem with setting a stable year-long price. Buying foreign currency as a stability option? Sure. Asking the Australian market to believe that you put forward enough cash to buy 2 years worth of bikes in advance and that's why the prices are still higher? Sorry. Spin that one to the truly gullible.

    Same response as above. Sure - stable yearly prices is good. Sustained inflated prices year after year, is bad.

    None of which explains why bikes that sell less are being sold for between $1500-$2500 more than the equivalent foreign price (keeping in mind the Californian regulatory system), while popular model bikes are being sold for $4000-$6000 more. Popular model bikes would have all of these associated costs reduced due to the increased volume, yet the prices are at a huge disparity to base/naked bikes.
  15. why the bloody hell are you complaining. Don't buy a new bike if it upsets you that much. Encourage enough other people to do the same and something might happen.

    Since everyone else is unlikely to pass up the opportunity, why not just climb on the train and enjoy the vehicle. Think of it merely as the cost of buying a vehicle in this country. Thank goodness you don't live in denmark where you pay more in taxes than the vehicle itself costs us here.
  16. They charge that much because people are paying that much. *Shrugging Shoulders*

    I'd do the same if I were a businessman.
  17. I feel frustrated about new bike prices here and for that matter tyres and fluids as well. All we can do is buy everything else off eBay and seek comfort in revenge being a dish best served cold. :)
  18. An interesting calculation for someone with the time (or I will work it out tonight) would be comparing the prices as they were in 2000 when the dollar was at $0.50c and compare the increase in the USA against the increase in Australia, factoring in that the dollar is now worth $0.89c.
  19. Is there anything stopping you importing a bike from the states or from Italy, and having the bike complianced yourself?

    Would that cost way too much for one off purchases?

    If the costs were similar to do the work yourself, even slightly more expensive, then distributors would be forced to pull their prices in line??
  20. Nup, can't do it unfortunately. The thing that stops you is that magic little ADR compliance plate, even if the bike is identical to the Australian model. That's why the Aus importers hold the monopoly here, otherwise it would be an open market. The compliance for any model that is sold on the market is held by the full volume importer (ie Honda Australia) and they're not going to be inviting people to import bikes from the US so they can slap a compliance plate on, then they could charge $5g more than in the US! :evil: