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Benz refutes overpriced car claims

Price point: Mercedes-Benz says a buyer would struggle to parallel import an A-Class hatchback to Australia for cheaper than what the vehicle would cost if it was brought in from Britain.

Australian car prices are where they should be, Mercedes-Benz says

12 Aug 2014

MERCEDES-BENZ has dismissed claims that it is overcharging for luxury cars in Australia, saying a report showing pricing was on parity with other right-hand-drive markets was accurate.

Brisbane-based dealership director Lynton Rose has spoken out against what he claims are misleading figures contained in a Federal Chamber of Automotive Industries (FCAI) report, which found Australian luxury car prices were similar to those in Britain for some models.

Mr Rose has held up the example of a BMW 750Li, which sells in Britain for almost $200,000 less than what it sells for in Australia, as an illustration that prices here are too high and that some form of government intervention may be needed to bring prices down.

However, Mercedes-Benz Australia/Pacific senior manager of public relations, product and corporate communications David McCarthy said his company stood by the report, and that Mr Rose’s claims were wrong.

“Certainly at the higher end of the scale, there is a bigger price variance, but if he is a luxury car dealer that thinks that, he’s not going to be a very successful one,” Mr McCarthy said.

Mr McCarthy also refuted claims from Mr Rose that Mercedes-Benz’s presence in Australia, like that of BMW, was top heavy and adding to the cost of every car sold here.

“I look out my window here (at Mercedes-Benz’s Mulgrave-based corporate headquarters in Victoria) and I don’t see a Taj Mahal,” Mr McCarthy said.

“This organisation runs, I’m not going to say on the smell of an oily rag, but our costs are very low relative to our turnover.

“There’s no one here who doesn’t more than earn their keep ... I just think he is plain wrong.” Mr McCarthy said buyers would also struggle to bring in a parallel import vehicle cheaper than what the cars were already sold here for.

“The example we gave (in the FCAI report) was an A-Class – an A180 or an A45. If you bought that in the UK, and you were able to get a refund of the VAT (20 per cent British tax) which is not guaranteed, shipped it to Australia and then paid import duty and GST, you would actually most likely end up paying more,” he said.

“You would (also) have a warranty that is less than the local warranty.

“There’s a lot of nonsense when talking about parallel imports, whether it is cars, whether it is trucks,” he said.

Mr McCarthy said an example where parallel importing did not work was for Peterbilt trucks, which had no official importer in Australia but were brought here and converted to right-hand drive.

“Those trucks on the market do not have the same value in the market as you would expect (compared with officially imported trucks), and it will be the same with parallel imports,” he said.

There would be other issues, he said, with a car parallel imported from Britain having the wrong satellite navigation maps, wrongly configured air-conditioning system for the Australian environment, a speedo reading in miles per hour, and potentially an incorrectly sized fuel filler nozzle all adding to the list of problems for a buyer.

“That’s the easy bit,” he said. “Seventy-five per cent of world production is left-hand drive, there’s a thing called economies of scale ... he (Mr Rose) should know about that.

“The price comparisons we make (in the FCAI report), we stand by them, they’re adjusted for equipment, and if he really believes he can import a right-hand-drive BMW from another market and sell them and sustain a dealership, then perhaps it is time for him to hand his franchise in and become an independent once the law changes.”

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