Prices to rise as dol­lar falls

New cars will cost more as the econ­omy strug­gles, writes NEIL McDON­ALD

Herald Sun - Motoring - - Carsguide -

NEW car buy­ers should buckle up for a rocky ride. If the Aus­tralian dol­lar con­tin­ues its down­ward spi­ral new ve­hi­cle prices are set to rise.

The car in­dus­try is con­ser­va­tively pre­dict­ing price jumps of $500 to $1500 on a $20,000 hatch­back and more for lux­ury brands if the dol­lar does not re­cover in the short term.

The Aus­tralian dol­lar has tum­bled 30 per cent since reach­ing a 25-year high of 98.49 US cents in July.

Even the Com­mon­wealth Bank this week fore­cast that the dol­lar would re­main de­pressed next year, rang­ing from a low of 59 to 64 US cents and re­cov­er­ing to 75 cents by year’s end.

The cur­rency cri­sis and de­pressed con­sumer con­fi­dence is cast­ing a shadow over new car sales as we ap­proach Christ­mas.

Car­mak­ers put on a brave face at this month’s Aus­tralian In­ter­na­tional Mo­tor Show in Syd­ney, but many ad­mit­ted that ris­ing steel prices and the col­lapse of the Aus­tralian dol­lar would put up­ward pres­sure on prices.

Toy­ota’s se­nior ex­ec­u­tive di­rec­tor of sales and mar­ket­ing, David But­tner, says though Toy­ota is not looking at ‘‘any­thing spe­cific at the mo­ment, we will con­tinue to watch the mar­ket’’.

‘‘Prices rises are an in­te­gral part of the in­dus­try,’’ he says. ‘‘It goes through cy­cles.’’

He says there are cur­rency up­sides and down­sides to be­ing a lo­cal car­maker that ex­ports and im­ports.

Toy­ota, like Holden with its Com­modore, is buoyed by a strong ex­port pro­gram for its lo­cally built Camry to the Mid­dle East.

‘‘We will al­ways be ex­posed to the va­garies of the ex­change rate and the econ­omy,’’ But­tner says.

‘‘Our job is to make sure we make this a sus­tain­able busi­ness through ev­ery eco­nomic cy­cle.

‘‘We sup­port the cus­tomer, the dealer and the 4500 em­ploy­ees in this coun­try.’’

But­tner says that two months ago eco­nomic an­a­lysts were talk­ing Aus­tralia and US-dol­lar par­ity. ‘‘To­day it’s an in­cred­i­ble swing,’’ he says.

Mit­subishi Aus­tralia chief Rob McEniry warns that the in­dus­try is fac­ing short-term pres­sure on all im­ports. He says that if prices rise , it will hap­pen in stages. But com­pet­i­tive pric­ing pres­sures will make it dif­fi­cult to pass on any rises, he says.

De­spite the som­bre mood of the car­mak­ers, An­drew McKel­lar, chief ex­ec­u­tive of the Fed­eral Cham­ber of Au­to­mo­tive In­dus­tries, which runs the Syd­ney show, says the FCAI is con­fi­dent the mar­ket will still sell a mil­lion ve­hi­cles this year.

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