I always felt a little guilty whilst writing my Saab blogs over the years. Here I was, writing about these fantastic cars and this great company, hoping that people would support the company and help to ensure it’s continued existence, and yet I hadn’t ever ponied up and bought one myself.
There were a couple of reasons for that.
1 – the website took a hell of a lot of my time and hopefully, made a good contribution to the marketing and promotion of the Saab company and the ownership culture. It was my hope that the site made a contribution at least equivalent to me buying a car myself. The time it took to put content together involved some family sacrifices and the trade-off with my wife was that we would direct our finances towards paying off the family home, rather than high-priced vehicle purchases. Thankfully, that decision has served us well and we’re nearly there with the house, which is a great feeling.
2 – New car prices here in Australia are crazy expensive when compared to some other places around the world. OK, they’re not Denmark-crazy or Norway-crazy, but every time I read articles from the United States about new models and pricing, it nearly makes me cry to see how much we’re paying downunder.
This article has been prompted by an announcement at the Detroit Auto Show today, about pricing for the Fiat 500 Abarth. Some of you may not have seen the Abarth yet, which is a great excuse for me to show the ad:
Magnificent, no? Makes the J-Lo series of 500 ads look very shabby, in more ways than one.
Anyway, it was announced today that the 500 Abarth will go on sale in the US for around US$22,000. Whining about US pricing is nothing new. I did it with Saab plenty of times and yes, I’m going to do it again here.
Bear in mind that as I write this, the Aussie dollar is at parity with the USD and has been for the best part of a year. Canadians, you’re feeling this, too, aren’t you?
So the Abarth is going for $22K. It looks fantastic, is better equipped and with 160hp, a feather-light body and some go-kart chassis tweaks, I bet it gets down the road pretty nicely, too.
Here in Australia, Fiat’s latest offer is to get the basic trim 500, in diesel hardtop form for A$26,000. Other sites are showing it at around A$29,000 whilst the petrol model – with none of the fancy trim and some 60hp less than the Abarth – is going for around A$28,000.
The Fiat 500 convertible (like the Fiat 500C I drove around Mallorca last year) sells for even more, at A$33,000. The convertible starts at US$19,500 in the US.
Abarth is actually treated like a separate brand here in Australia. The Abarth 500 Esseesse (say: SS) has been available since March 2011 at a price of A$35,000 – a 50%+ premium over the US equivalent at a time when our currency is at parity (and has been for some time).
It was even worse with the Saab Turbo X when that came out in 2008. The luxury car tax here in Australia helped to boost that to nearly double the US price, although our currencies weren’t as close then as they are now.
I don’t know if it’s a matter of US vehicles being sold for extremely low margins, or Aussie customers being gouged simply because we’re used to it and will accept it. I suspect the truth is somewhere in the middle. We have a 5% tariff on imported vehicles and of course, we’re a long ship ride away from the factories that build most of our car fleet. But those two factors don’t add up to a 50% premium.
In any case, our high initial prices in Australia and high depreciation rates make me wonder how we managed to sell 1,000,000 cars in each of the last two years. Based on current estimates, that’s one new car for every 23 people in the country. They also leave me feeling pretty sure that I’m not likely to buy too many, if any, brand new cars in my lifetime.
Perhaps if I lived in a larger city, with a longer commute. But here in Hobart, where I’m basically no more than 30 minutes from anywhere I need to be, it just doesn’t make economic sense.
US buyers – enjoy your opportunities while you have them (hopefully a very long time). I’m more than a little envious.