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Choice mag wades in on bike prices

Discussion in 'General Motorcycling Discussion' at netrider.net.au started by vmaxer, May 27, 2011.

  1. #1 Arrium, May 27, 2011
    Last edited by a moderator: Jul 13, 2015
    Choice magazine has waded in to the retail overpricing debate, motorcycles get a mention.........well done Choice :soapbox:

    http://www.choice.com.au/media-and-news/consumer-news/news/retail-inquiry-submission.aspx

    EDIT 11/06/11 This thread has run for quite some time and I think it's time page 1 was updated, thanks to all who contributed and it's not over yet !

    Hi from Vmaxer and thanks for stopping by. The purpose of this website http://ozmcripoff.webs.com/ is to bring attention to the anti competitive , anti consumer, and anti free trade nature of motorcycle importation. The manufacturers and importers have monopoly control over pricing to dealers and ultimately us the end consumer. Through the FCAI they maintain high profit margins, high prices and restrict parallel or grey imports from getting past the Government ADR compliance laws.

    On the one hand the importers (FCAI) will complain of the high cost of compliancing and beauracracy here in Australia, while with the other hand they collude with the Department of Infrastructure & Transport to maintain the rigid ADR compliance system. Some people argue that the cost is much lower than the importers would have us believe and use it as a smokescreen. Because of the ADR compliance laws it is virtually impossible for an individual to import a motorcycle manufactured after 1988, perhaps a few bikes get in but they would be a very small percentage due to the high costs involved.

    In the USA and Canada government policy creates a very competitive market where importers cannot dictate consumer pricing, while they can provide MRRP or MSRP price indicators, printed text in underneath this price states that the sale price may be lower. The prices in N.America are so cheap I doubt anyone living there would want to import their own. In New Zealand the market has been completely deregulated since 1989, there are no imports controls or restrictions for either second hand or brand new bikes. NZ has equated it's standards with those from Japan, Europe & N.America to allow easy transition of imported bikes.

    A search of any USA, Canadian or NZ motorcycle trader website will show you the competitive example of pricing in those nations, here are some examples:

    http://www.bertsmegamall.com/new_vehicle_category.asp?Search=Category

    http://www.totalmotorcycle.com/

    http://www.motorcycletrader.co.nz/

    On the other hand in Australia, the importers with their monopoly control dictate completely the price of an imported motocycle. Because no one else can freely import there is no effective competition, the same scenario equally applies to motor vehicles but that's for someone else to wage war on. For us we need the government to deregulate motorcycles and to equate our AS standards in the same manner that NZ has. Only by allowing direct imports will we the consumer have the opportunity to challenge motorcycle pricing.

    The Auto industry remains protected, while every other industry has had tariffs and import protection removed. They will not relinquish their priviledged position without a fight, they will threaten to pull out and shutdown, they will advertise long and hard against reform and change. Just like they did in NZ back in 1988, guess what ? They are all still there in NZ doing business, but in a competitve environment, they have adapted to changed business conditions.

    The price of parts in Australia is truly disgusting, but at least we have the option to source from overseas. How can a Japanese made sump gasket be 7$ in the USA and 28$ AUS here ? But it illustrates the mentallity of the organisations operating in Australia.

    Also there are no Japanese road motorcycles made in N.America anymore, Honda shut down the Ohio Goldwing factory last year....compare the price of Goldwings in USA-NZ-AUS ! ! ! ! ! So all the road bikes come out of Japan, don't let anyone get away with telling you that's why they are cheap in the USA.

    An example of our overpriced motorcycles is demonstrated below, comparing the price of VMX17 in NZ and Australia, the price is cheaper in NZ and this is due only to the fact that anyone living there can import their own, thus providing competiton to the manufacturer/importer who then has to bring down his price to compete:

    http://www.motorcycletrader.co.nz/Vi...al&N=0&Ntk=All

    http://www.bikepoint.com.au/all-bike...eot=1&__N=1432 604 1430 1429 1626 1428 4294967267 4294964271&silo=1400

    http://www.bertsmegamall.com/new_vehicle_category.asp?Search=Category

    1$ AUS = 1.3$ NZD as of 8/6/2011

    Current VMX17 price in AUS = 32780$ AUS drive away
    Current VMX17 price in NZ = 35749$ NZD = 27499$ AUS + on road charges

    GST in OZ = 10%
    GST in NZ = 15%



    I hope we can all see it's cheaper in NZ ? That the GST is higher in NZ ? So how can this be given NZ population is only 4.2 million and the bike market extremely small ? Perhaps an open deregulated market allowing parallel imports might have something to do with it ? These people would tell you http://www.kiwibiker.co.nz/forums/forum.php ask them if they want to go back to 1988 when the protected Auto industry had the market completely under wraps like they do here ?

    Now if I lived in NZ and I can buy this bike in the USA 18,000$USA = 22,000$NZD

    22,000 + 15% GST (35749 x 3 / 23 = 4663) = 26,663$NZD - Add shipping and other taxes etc, approx = $3000$NZD

    Total cost landed = 29,663$NZD

    So we have 29,663$NZD self imported verses dealer at 35749$NZD

    Now for the extra 6,000$NZD you get a 2 year factory warranty, you get to pay for all the overheads at the plush Yamaha offices in an expensive city suburb, you pay the dealers percentage and you get dealer support.. Why can the importer charge a premium of 6,000$ NZD ? Because he believes it's achievable and because only a small percentage of risk takers want the hassle of a direct ""grey"" import. The majority will buy from the dealer but will appreciate the risk takers for helping to bring down the cost of the bike on the NZ market.

    Ask yourself this.......if no parallel imports were permitted (i.e pre 1989) how much would Yamaha NZ price this bike at ?????
    32,000$AUS = 41,600$NZD ! ! ! ! ! !

    Cheers from Vmaxer @ http://ozmcripoff.webs.com/

    [media=youtube]rMJlncU6DQk[/media] ...........me on my soapbox
     
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  2. As much as I love to pay something similar to the retail prices in the US for bikes, it's not that simple. While the article is absolutly right when it comes to things like video games, softwares, etc. It needs a hell of more investment to stablish and provide a trained dealer network and support in case of a motorcycle or car to deal with repair, warranty issues, etc. and IMO this is where our size of market causes a higher margin for the end user. However, I agree in some cases the difference in price we are asked to pay is too high, I might be totally wrong though.
     
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  3. crap. don't agree with this at all. There is absolutely no reason on earth why dealer setup and training cost should be higher here than anywhere else.
     
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  4. Some comparisons:

    BMW R1200GS Adventure -
    $17,250 USD recommended retail
    $24,000 - 28,000 AUD


    BMW F800ST
    $10,990 USD
    $18,000 - $19,000 AUD



    Suzuki Hayabusa
    $13,699 USD
    $18,990 AUD

    Even if it was a 1:1 AUD:USD relationship, that would be significant.
     
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  5. I'm at a loss as to why there is this differential. We see a lot of dealers either close up or struggle to survive so the money is not being retained at reseller level. At this rate we'll end up with one dealer per capital city for all bike brands.

    Is it the manufacturers who see us as a small market and have a lash? Is it ADR compliance that drives the price up?

    I yet to see a satisfactory answer to this problem.
     
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  6. Coincidently I was checking out a Diavel in a dealership tonight and the salesman told me it's Ducati Australia that determines the pricing and they only make $2K on the deal.

    Bless his cotton socks


    Sent from my shed via Tapatalk.
     
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  7. What are:

    - gvt import duties
    - freight & insurance costs
    - size of market (volume)
    - labour costs
    - trade agreements between nations
    - lead times on ordering (relevant when talking about dollar parity)
    - wholesale unit costs
    - etc

    here in Australia like compared to those countries overseas?
     
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  8. A few questions for you.

    Do any of you know how much it costs to buy a franchise?

    Do any of you know how much it costs to set-up and maintain a workshop to the standards required by the manufacturer/supplier?

    Do any of you know how much it costs for a 'floor plan'? or for that matter do you know what a 'floor plan' is

    Do any of you know how much a dealer makes on the sale of a new bike?
     
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  9. I'm sure if someone figures out a way to make motorcycle prices on par or close to prices in the US, they'll win some type of economics award.
     
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  10. Maybe comparing wages, cost of capital and volume of sales in Australia is a good starting point to compare markets like US with ours. I'm not happy to pay that much extra as well but IMHO it's naive to assume importers/dealers are making huge profits and there is no other explanation for this huge price difference.
     
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  11. There's also the issue of demand. There's gotta be 250-300 million people living in the US - about 10% of that living in Australia. Dealers are probably going bust because there simply isn't the demand here...
     
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  12. What pisses me off is the continual beat up on the retailers. Quite often, whether it be for bikes, PC games, music, whatever, that's NOT where the issue is. The retailer margins are typically the same here in Australia as in the USA.

    The number of times I've been to a few bike shops in Australia, talked about the prices in the USA, only to have them pull up their wholesale price from the local distributor where the retailer is buying said product at wholesale for >50% more than the retail price in the USA, and it becomes obvious very quickly where the margins are really going.

    It's the same with computer software. It's not the retailers that are the problem, it's the publishing houses that basically sell wholesale to the Australian retailers at a 50-100% markup over the wholesale price of the same product overseas. If you try to buy software digitally, Australian buyers are met with 50-100% markups from the publishing houses setting the pricing on the digitial software distributors (eg. Steam) higher purely, and solely, and only, for the Australia market alone. Buy the same software in any other country, and you pay 30-50% less. It's the same distribution network supplying the software. How can anyone argue that's fair?

    In almost no single other country in the world does this happen. Just Australia. It doesn't make sense.
     
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  13. Canada 34 million people, similar size country to Australia with similar scale of economy and wages etc etc etc. Yet their bike prices are almost on par with the USA. WHY ?

    Keep asking the importers WHY ????? BMW HONDA KAWASAKI SUZUKI YAMAHA TRIUMPH HARLEY MOTO GUZZI DUCATI all the importers in bed with one another ripping the guts out of Aussies.
     
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  14. as long as people keep paying these prices the retailers will keep charging them. In many instances consumers have a choice and can puchase from overseas and perhaps in the long term the retailers will put pressure on their wholesalers to drop prices to regain custom. What's our alternative for bikes though? Unless we want to keep circulating the same old bikes amongst ourselves we have to bend over and take it.
     
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  15. Wrong. We have a litany of on costs, mostly government taxes, work cover, super etc. Then there are all the building code costs for commercial enterprises - bucket loads more expensive than building a house and finally, bikes aren't generally high turnover items, so the finance costs can be expensive.

    ...that's just to name a few.
     
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  16. With bikes there is also the issue that some/most manufacturers build their bikes specifically for the Australian market, which means that their production runs for that configuration are significantly smaller than for other markets, such as Europe and the USA. Some of this is ADR compliance, I'm sure. Other reasons for Australian versions of bikes to be built are perceived "fashion" requirements, or Australian preferences in finish, colour, and so on. Ducati certainly has this issue.

    There are ways for manufacturers to make small production runs cost almost exactly the same as large production runs, but I doubt the likes of Ducati employ those processes and techniques. So, they have one large setup and run the Australian version once per model. The distributor has to buy the whole production run at once, and therefore has higher cost of inventory. They also have much less flexibility for top up production runs, which most likely would be smaller, and therefore cost even more per unit. Sometimes they won't even be able to get a slot into the production schedule to produce more Australian versions, because the schedule is already full and committed. Pricing set at the launch of a model needs to cover those issues.

    No doubt the costs could be calculated differently by the manufacturers, spreading the cost of setup over all models rather than applying them specifically to the model run. They could also choose to provide world wide wholesale pricing equity, shipped from the factory, which would result in much more reasonable worldwide retail pricing differentials. However, despite Australian being an excellent test market for many products, with relatively high visibility and hence influence world wide, they choose not to do anything about the pricing . . . because we continue to pay the prices, and we have little choice.

    Don't forget also, most new motorcycle stock sitting in Australia today would have been ordered, probably at an agree price in US$ or Euro, when the Australian dollar wasn't as strong as it is now. The Ducati Diavel shouldn't fall into that category though. But, importers may have been caught out hedging currency at the wrong time, buying Euro or US$ before the AU$ improved as much as it has now. So they may be buying with currency bought at a much less favourable exchange rate.

    As Flux says, I think you have to look past the retailers, but also for the most part past the importers (NFI, importers of Ducati may be an exception here), and look to the manufacturers or suppliers to our importers.

    Also as Rob reinforced, the costs of runnig a business in Australia are typically higher than the costs overseas.
     
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  17. Roderick which bikes are built especially for Australia ? What are the major differences ? My four bikes are exactly the same as can be seen in Canada, USA, UK, Europe, certainly the frames (which require ADR compliancing here) are indentical. The differences are only cosmetic not costly.

    IMPORTERS of road bikes have monopoly control, unlike outboard engines, Jetski's and off road dirt bikes which are being ""parallel"" imported at substantially lower cost to individuals. This monopoly allows them to add 50% OR MORE to the cost of a road bike here than our brothers pay in North America.

    The retailer / dealers are locked into costly agreements with the importers. One thing I am convinced of is that if we saw a substantial drop in IMPORTED prices, more riders would own bikes. More riders = more business

    I have not owned a brand new motorcyle since 1981, on principal there is no way I will be buying a brand new bike having to pay substantially more than what it costs in Canada or USA.

    Cheers from Vmaxer:biker:
     
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  18. My motorbike manual (2002 ZX9R F1) clearly shows several different models that are sold into different regions and some of their differences.
     
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  19. Rob what specific difference on your bike would cause it's price to be greatly higher in Aussie than the same machine sold in USA/CANADA ?? Engine ? Exhaust ? Frame ? Forks ? Brakes ? Fairing (if it's got one !) ? Seat arangement ? Electronics/Ignition ? I am intrigued to know more.

    In fact bikes sold in California USA ought to be the dearest due to tough anti pollution laws with catalitic converters.....but they aren't !

    Vmaxer
     
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  20. I think you will find the average wage over there for workers in a motorcycle shop would be CONSIDERABLY less than here. Heck any smuck here can walk into a job paying $20/hr so dealers have to remain competitive with their wages.
     
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