Why Are Cars Are So Expensive in Australia Compared to China - Whilst Tesla Is Not?

Lshrisme on 03/07/2024 - 20:37
Last edited 04/07/2024 - 10:14 by 1 other user

Toyota Corolla Cross in China: AU$18,000 (drive away price, 2.0L). The price here in Australia is $40,000

Toyota Corolla Hatch price in China is AU$17,000 (drive away price. cheapest model 1.2T or 1.5L). The price in Australia is $36,000 (just car price cheapest model 1.8L)

BMW 320i in China (drive away price AU$46,000）. Here in Australia. More than $70,000.

Tesla Model 3 Price in China is AU$46,000. The price in Australia is AU$55,000. it is quite a reasonable price considering import duty from China and GST.

Why can't other brands achieve a similar pricing level in China compared to Australia, when Tesla is able to keep its prices in China almost on par with Australia?

Automotive

Comments

  • DashCam AKA Rolts on 03/07/2024 - 20:42
    +19

    Transport cost.
    Also the models are not like for like. Specific models for specific markets, means a base model in one market is not identical to a base model in a different market.

    • Nickels n Dimes on 04/07/2024 - 12:47

      True. The biggest cost difference apart from manufacturers / importers gouging (they charge as much as they think buyers will pay), but they have different grades of vehicle for different markets. Originally that would have been driven by varied safety/emissions standards, but also the build quality, materials, are completely different between markets.

    • derrida derider on 05/07/2024 - 14:43
      +13

      Transport costs for a car are a few hundred dollars. It aint transport costs.

    • OzHan on 05/07/2024 - 15:26
      +4

      It fails to explain Toyotos (and most other ICE cars) were much much cheaper before the Pandemic. specific models for special markets were the same back then.

      • DashCam AKA Rolts on 05/07/2024 - 17:51
        +4

        Toyotos (and most other ICE cars) were much much cheaper before the Pandemic.

        5 years of inflation since 2019 (before Pandemic - 2020). From 2019 to 2023, the total change in cost is 16.8 per cent, over 4 years, at an average annual inflation rate of 4.0 per cent. https://www.rba.gov.au/calculator/annualDecimal.html

        A base model Toyota Corolla in 2019 was $20,200, with just inflation, no other cost increases this would be $23,586. Actual 2023 base model started at $26, 290, which would include upgraded features.
        Base model in 2024 started at $29, 270. These prices also be indicative of a sellers' market due to demand outstripping supply.

    • ribze1 on 07/07/2024 - 09:34
      +2

      Funny that. Yet we export goods (for example gas) that ends up being cheaper overseas than here.

    • altomic on 03/07/2024 - 23:57
      +39

      About $4,000 to import a car. Including shipping, port fees, and roadworthy/compliance.

      That was what it was going to cost me to bring my Celica back from from Japan.

      • ESEMCE on 04/07/2024 - 11:09
        +4

        Plus Importation Duty and GST on import.

        • derrida derider on 05/07/2024 - 14:51
          +8

          Shipping fees for bulk cars is WAY WAY cheaper than a special one-off. And cars in China attract sales tax just like our GST - for ICE cars usually heavier than our GST in fact (depends which province). Import duty adds just 5% max.

          Nope - it is paying the Australia Tax. It is the exact opposite of the "dumping" the US and the EU currently accuse the Chinese of when trying to protect their manufacturers from the Chinese onslaught.

      • Jenus on 05/07/2024 - 20:38
        +1

        Not anymore.

        My Dazmac Shipping invoice was 4.3k end of last year.

        Freight market has gone to shits with the crisis in the Red Sea.

        And then another 2k for rwc and compliance.

    • JIMB0 on 04/07/2024 - 05:08
      +65

      MG can import a car into Australia and sell it for less than the price difference op has referenced for the Toyota. It ain't shipping costs or safety standards, it just a fat profit margin.

    • EightImmortals on 04/07/2024 - 06:54
      +1

      Are Toyota's made in China now?

      • shrisme on 04/07/2024 - 07:04
        -1

        yes. Toyota has three manufacturing factories in China.
        I'm not sure if the Toyota cars sold in Australia are produced in China or Japan.
        But my Camry made in Melbourne.

        • EightImmortals on 04/07/2024 - 07:12

          Thanks, I didn't know that. :)

          But if they are making certain models in Melbourne then that would factor into the shipping costs I would have thought.

        • Trance N Dance on 04/07/2024 - 09:36
          +8

          Toyota for the Australian market are made in Thailand or Japan (at least the passenger models, not sure if any of the commercial vehicles are made elsewhere).

        • Nickels n Dimes on 04/07/2024 - 12:58
          +1

          I had an Altona built Camry, it was nowhere near the quality of even older Japanese built Toyota's. US built Toyota's are no better.

          • 0z8smakf on 05/07/2024 - 18:31
            +3

            @Nickels n Dimes: I had an Australian built Camry 2016 model - brand new, then I had a 2018 model (new shape/style etc) first generation built in Japan, it's a night and day difference, the quality that comes out of Japan is fantastic. I've found that at-least 80% of the time anything manufacturerd from Australia is absolute garbage.

            • Jenus on 05/07/2024 - 22:36

              @0z8smakf: Thank goodness 30% of Aussies are born overseas then.

    • Sinnerator on 04/07/2024 - 08:48
      +5

      now try shipping 5000 of the same car, WOW economies of scale

    • Nitrollparty on 04/07/2024 - 16:16
      +2

      actually ive done it, as its already mentioned, its quite cheap and the process only took 3 months

    • justworld on 05/07/2024 - 07:59
      +3

      We can't do that since the government's proposed parallel import legislation was cock blocked by the big car manufacturers here to lock in their profits.

  • spc12go on 03/07/2024 - 20:54
    +6

    Our pay is different to China. In terms of buying power our cars are cheaper on paper.

    Also the price you quoting are they drive away prices or prices before taxes and duties?

    • kaleidoscope on 05/07/2024 - 00:15
      +7

      "pay is different" could be irrelevant in this scenario Because OP's main question is why other brands have such higher price disparities compared to teslas despite them being made in china and sold in the local market.

    • derrida derider on 05/07/2024 - 15:05

      Drive away prices, and China has heavier sales taxes for ICE cars than Australia does.

  • Fredfloresjr on 03/07/2024 - 20:58
    +5

    Tax, so gov’t can hand more $$$ to people

    • EightImmortals on 04/07/2024 - 07:13
      +1

      Which people?

      • Drakesy on 04/07/2024 - 10:35
        +9

        Rich ones

        • Gdsamp on 04/07/2024 - 10:48
          +7

          Thank you for explaining Quantitative Easing

  • Mechz on 03/07/2024 - 21:11
    -7

    Safety standards are different.

    Economies of scale etc.

    • TightAl on 04/07/2024 - 11:19
      +3

      LOL WHAT?

  • JimmyF on 03/07/2024 - 21:19
    +4

    Is the 'cheapest' model in China, EQUAL to the 'cheapest' model here for features etc? Often you find China gets even more of a base model than what we get, hence the cheaper price.

    Which is kinda reflected in the Tesla being far closer to Chinas pricing than the other 2.

  • freefall101 on 03/07/2024 - 21:33
    +4

    delivery, safety, warranty, taxation and left hand drive cars are pretty rare in the world (relatively speaking).

    If you think cars are cheaper in China, your mind is going to be blown when you find out about clothing and electronics (although go to Vietnam for clothing).

  • scotty on 03/07/2024 - 21:38
    +19

    Toyota Corolla Cross

    Chinese market: built in China
    Australian market: built in Japan

    Toyota Corolla Hatch

    Also manufactured in China vs Japan

    Tesla Model 3

    Australia also gets the Shanghai built Model 3. The point is, China built most its cars for domestic market, where we have to import everything. Sometimes they aren't even the same car or same specification.

    • Hasbulla on 05/07/2024 - 10:37

      Hilux = Made in Thailand. What's your position on its crazy price?

      • scotty on 05/07/2024 - 11:00
        +2

        Because we still have to import it?

        Do Toyota sell Hilux in China? I had a quick search and only found US-built Tundra on Chinese car websites under Toyota pickups, and they ain't cheap there either (~A$100k for a 1yo sample, still quite a bit cheaper than Tundra in Australia).

  • AndyC1 on 03/07/2024 - 21:56
    +6

    Also OZ has allot stricter design rules than China, so has to be built better to meet the rules.

    Economies of scale kick in for left V right side driving. Check out "GM exit right hand drive" and have a read.

    • DashCam AKA Rolts on 04/07/2024 - 08:39
      +7

      OZ has allot stricter design rules than China

      This is correct. If you look at the BYD Dolphin as an example, the Australian model is longer. It required substantial changes to the front of the car to comply with ADR for frontal collision protection.

    • derrida derider on 05/07/2024 - 15:13
      +2

      It is true China has less stringent safety rules than Australia (though the difference is MUCH less than it was a decade ago). But Australia has less stringent safety rules than the EU, and the EU is whinging long and loud about how cheap Chinese cars are there.

      I reckon the biggest single difference is due to the LHD issue - we are a tiny and awkward niche market from any Chinese manufacturer's POV so most will simply not compete hard for it - they'll jack up the margins to try and make it a nice little earner rather than something worth seriously fighting other makers for.

      Now if China has a red hot go at the INDIAN market things might be different.

    • OzHan on 05/07/2024 - 15:53

      You mean Tesla does not need to meet these stricter design rules? How do you explain the much smaller price disparity for Teslas?

    • bargaino on 04/07/2024 - 10:43
      +16

      That is a ridiculous comment. You cannot possibly think that an individual cost is comparable to per-car shipping thousands, so I conclude your argument in not in good faith.

      • CurlCurl on 04/07/2024 - 11:50
        +1

        That is a ridiculous comment. You cannot possibly think that an individual cost is comparable to per-car shipping thousands, so I conclude your argument in not in good faith.

        Yep, 8,000 car carrying ships are common now.

      • inertia8 on 04/07/2024 - 20:36
        +2

        Also consider that to do that in scale requires a large operation and this costs money to sustain and maintain market position.. so yes, car companies bring in thousands of cars… now they need to support the sales and distribution of that product.. compliance with the local market regulations, ensure that they bring in the right mix of accessory, service, crash and warranty repair parts and have these available to support the product in the market. They need to offer training and support to technicians on their servicing and repair and the necessary support and processes to resolve customer issues… each unit brought in needs to contribute significantly to sustain the whole operation and contribute towards the future expansion thereof.

  • MeesusEff on 03/07/2024 - 22:14
    +13

    Check out Singapore's car prices and you'd shit yourself. Toyota camry from $200k SGD, and their dollar is slightly stronger than AUD

    • Gunnar on 04/07/2024 - 00:32
      +3

      Cheap Cheap Lah has entered the chat

    • EightImmortals on 04/07/2024 - 07:21

      I thought you were joking but I looked up the prices and you are correct. So I looked it up and surprise, surprise….

      "The Business Times summarises the myriad taxes and fees levied on cars here, and how prices compare to other major cities…."

      https://static1.businesstimes.com.sg/bt_files/specials/2024/…

    • OzBarAnon on 04/07/2024 - 12:12
      +4

      $100k for a certificate of entitlement seems nuts, but the country is relatively tiny, so car ownership is less important.

      • hawkers89 on 06/07/2024 - 09:21

        At least their MRT is pretty solid compared to Metro in Melbourne

    • speed231 on 04/07/2024 - 13:38
      +6

      Singapore has got it right. Easier to buy a home (apartment) than a car

    • Poor Ass on 04/07/2024 - 21:53
      +1

      Car itself is cheap it's the taxes in Singapore to drive

  • fantombloo on 03/07/2024 - 23:00
    +17

    None of the above. They're more costly here mostly because people are prepared to pay that. Do it enough and it sets a standard. Transport, etc. costs are nowhere near the increase in price. There's a lot more fat in it for the whole supply chain. Australia is often known as "treasure Island" to foreign companies.

    • JIMB0 on 04/07/2024 - 05:14

      Also we're prepared to que up for years due to a so called shortage. In China you order a car and have it within a week. It's the same story in other countries such as South Africa.

    • Bid Sniper on 04/07/2024 - 08:50
      +6

      This

      Porsche and Benz were kicking up a stink about grey imports basically lobbied government to stop the practice. Can import the exact same car for half the price, so would of killed dealerships monopoly scam here.

      Was looking a R35 GTRs in 2009, $80-90K landed, loophole was closed and Nissan selling the exact same car for $160K following year.

  • sajidmib on 04/07/2024 - 00:42

    Not any more the Chinese are here, and you can have the best of them with 7 years unlimited km warranty.

  • BargainBenno on 04/07/2024 - 08:03
    +3

    Have you seen the absolute massive car dealership showrooms in the capital cities? Well that’s why we pay so much. The retailers are swimming in millions of profits. The margins are enormous and we are the fools for accepting it. I mean like at the Tesla distribution model. They don’t have any dealer network and no show rooms lit up like a Christmas display. If car retailers were willing to forgo big margins we would see big drops. An example is that a find of mine was offered a bmw x3 entry level model for 25 per cent off the retail of $80k and I am sure bmw still make profit.

  • AngusD on 04/07/2024 - 08:18
    +2

    Taxes are pretty brutal here. Especially if you get up into a price range where the luxury car tax kicks in. I'm buying a new car atm and paying a total of just over $22,000 in stamp duty, GST and LCT on top of the cost of the actual car. LCT is the biggest rort of the lot - it was brought in as a tariff by another name to protect local manufacturing after they reduced the actual tariffs on imported cars. Now we no longer have a car industry to protect so the tax serves no purpose except hoovering up more money for the government.

    • [Deactivated] on 04/07/2024 - 16:59
      +3

      K but OPs example has nothing to do with LCT and the other taxes amount to less then 15%

  • Sinnerator on 04/07/2024 - 08:47
    +10

    Motor Mag answered this question 20 years ago
    BECAUSE australians will pay for it, it' as simple as that
    Most aussies like the shaft, then complain, but do nothing about it
    I walk everywhere with occasional PT

    • RatBargain on 04/07/2024 - 15:08
      +1

      It really doesn't get more complicated than that. Above cost price, Toyota is not going to give you a discount because it can. It will only drop prices when nobody is willing to pay it

      Did people not grasp demand and supply theory in Economics 101…? It's pretty basic stuff

  • Nillionaire on 04/07/2024 - 08:49
    -1

    They're not.

  • coffeeinmyveins on 04/07/2024 - 09:07
    -2

    Toyota Corolla Cross in China: AU$18,000(drive away price, 2.0L). The price here in Australia is $40,000

    Those will not be the same car. and I guarantee you the Toyota in China won't have the same safety features and will probably fall apart in 5 years.

    • [Deactivated] on 04/07/2024 - 17:02
      -2

      This is just not true in the slightest. The tooling suppliers for both country's are the same and alot of parts again come from the same suppliers into both countries manufacturing plants. Specs might be slightly different, but not alot.

      Classic racism

      • coffeeinmyveins on 04/07/2024 - 19:06
        +5

        Classic racism

        Nothing to do with the people from China. but ok.

  • Trance N Dance on 04/07/2024 - 09:40
    +3

    Economy of scale, market share for RHD vehicles and probably the biggest factor safety equipment and design regulations. Safety minimums in China and most of Asia (where the Chinese LHD cars are marketed) aren't a drop on what Australia's ADR requires.

  • CurlCurl on 04/07/2024 - 09:51
    +5

    161 countries are left hand drive and 75 right hand drive.

    https://carsexport.eu/lhdcars.htm

    • derrida derider on 05/07/2024 - 15:32
      +1

      According to Wikipedia about 30% of the world's population is LHD. But that includes India which of course has 100% tariffs on ALL imported cars.

      Once you take India out of it about 12-15% of the world's population is LHD - mostly in Pakistan and Africa where they do not buy as many cars anyway.

  • Drakesy on 04/07/2024 - 10:39
    +3

    It's to pay the extortionate amount the middlemen distributors get in Australia hence why we're seeing them drop like a rock at the moment, it's the sheer quantity of additional fat they bake in that sheds off. Australians were more than happy before to sign themselves up to $50k car loans and the market noticed this and came to the party. They didn't care that the car was worth some 50% of what they were selling it for.

    Also the transport costs are up there, i'd say roughly $2-$3k a car.

    But still doesn't really justify a 100% price increase when it's the same metal…
    I'd say maybe a 50% uplift (including GST), but paying double the price under the guise of additional taxes/fees is ridiculous.

  • KaTst3R on 04/07/2024 - 10:41
    +4

    China cars are cheaper but in major tier 1 cities, you need to "win the lottery" to get a car plate. You cant even buy one at this price and some people have waited years to get their cars.

    • R4 on 04/07/2024 - 15:02

      Yes. The OP is only telling part of the story.

  • LFO on 04/07/2024 - 11:13
    +13

    Outrageous price difference?

    I recall some car executives from some European brand calling it : The Australian Tax.

    Nothing to do with real taxation (from ATO) but the Australian attitude that it has to cost more:
    1. to be good,
    2. to be available in far away Australia.

    Reading some of the first comments justifying high prices reminds me why prices are so astronomical: because Australians are keen to pay astronomical prices finding amusing excuses to justify being ripped off..

  • smartazz104 on 04/07/2024 - 11:37
    +1

    And people thought car prices would fall when local manufacture stopped…

  • plastererJazz on 04/07/2024 - 11:38
    +1
    1. different quality and different manufacturers - ones manufactured and sold in China normally have cheaper labour and lower quality materials (this has been verified officially states that the standards are different)
    2. transportation cost and other logistics costs which again factor in labour in general
  • FlyingMiffy on 04/07/2024 - 15:01
    -1

    Two reasons. The market size is '000s times large - economies of scale. And tariffs - the AUS government pockets ALOT from vehicle imports.

    • derrida derider on 05/07/2024 - 15:38

      Actually the Chinese car market is "only" about 30 times the Australian one (still bigger than the US and EU combined though). Import duty on cars in Australia is just 5%. GST-type sales taxes in China are typically heavier on ICE car than they are here too.

  • R4 on 04/07/2024 - 15:08
    -6

    What's the warranty in China?
    How easy is to get any problems actioned under warranty?
    How easy is it to get licence plates? I've been told previously that in some cities, this is very hard to get.
    China is a massive market where economies of scale have to have an influence on prices.
    Transportation, taxes, compliance have to come into play.

    Prices in Australia are often cheaper than a lot of other countries. For instance my Hyundai I20N is cheaper here than in Europe (where it's just been discontinued). A VW Golf costs less here than in the UK. The same for many other models. Australia does okay for a lot of products and our incomes, on average, are much higher than most other countries.

    Who TF wants to live in China anyway. There's reasons why the East Coast of Australia is teeming with people from the PRC.

  • Kamsi on 04/07/2024 - 15:53

    Put simply we don't have any car manufacturers hence we only import cars from overseas.

  • mirz on 04/07/2024 - 16:30
    +7

    Australian business model is rip off it’s customers like there is no tomorrow, and majority is that dumb and don’t care.

  • snivy on 04/07/2024 - 18:40

    Where did OP get the prices from?

    https://www.bmw.com.cn/zh/all-models/3-series/sedan/2022/bmw…
    Starting from 299,000 yuan = 61,000 aud.

    Not to mention the licence plate too. https://cnevpost.com/2022/04/23/in-shanghai-people-still-mor…

    Also, there's almost no market for Japanese cars there, for an obvious reason.

    If I remember correctly, the total costs for European cars are really expensive there, more than Australia, but local brands are cheap.

    US is where the cheap cars are.

    • shrisme on 04/07/2024 - 20:48
      +3

      The prices on the official website have no meaning, what I'm talking about are the actual final drive-away prices. look at here for reference https://www.youtube.com/watch?v=BeH5clmuBpk

      • snivy on 05/07/2024 - 14:34

        So prices on official website are wrong but you’re referencing a youtube video?

        Well, guys, I don’t know what OP is trying to stir but I’ll rest my case.

  • Shane34 on 04/07/2024 - 18:42
    +5

    Because Australia is rip off island

  • Penguin30 on 04/07/2024 - 19:00

    Government over taxation. This is it.

    • greatlamp on 05/07/2024 - 13:04

      It's everything except government taxes

  • Dack Smith on 04/07/2024 - 19:26

    China has better governance?

    If Australian prices are atrocious, and China is cheap - obviously something is off?

  • johninmelb on 04/07/2024 - 19:40
    +1

    Thank your lucky stars you don't live in Singapore. The price of the Certificate of Entitlement you need to buy a car is often near double the price of the car itself. Then, the COE only lasts for 10 years when you either have to get rid of the car, or renew the COE. Doesn't seem to be a deterrent though, traffic is awful in Singapore as it is everywhere else.

    • OzHan on 05/07/2024 - 15:33

      At least in Singpore you don't really have to own a car. public transport can get you virtually anywhere. we all know the opposite is true here.

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