Aussie Dollar Drop to send Car Prices Up
Buyers of new imported cars should get in quick if they want to beat the almost inevitable price rise as the Australian dollar falls.
A shock 9% drop in the Aussie dollar against the US dollar on June 21 2013 has sparked widespread expectations in the industry that the recent record low prices for imported cars, delivered by a high Australian dollar, cannot last.
Most car importers buy their currency months ahead, so price rises may not be imminent, said Suzuki Australia, Tony Devers.
However, the Australian dollar has fallen an average 10% against most currencies of the countries from which Australia imports cars, except for Japan. It is thought the Japanese government is artificially suppressing the country’s Yen. Today, A$1 buys 11% more Japanese Yen than it did last year, and around 40% of Australia’s imported vehicles are Japanese.
Picking the vehicle make most likely to rise is determined by country of manufacture, not design.
For example, most “Japanese” utilities come from Thailand, as do many Honda vehicles.
Even more confusingly, the Japanese Suzuki Alto is built in India, but the cheap $11,990 runabout is sold into Australia in US dollars, making it vulnerable to a price rise.
Fiat-Chrysler Australia chief, Veronica Johns, said although the company is trying to hold prices steady (and it even slashed the Fiat 500 by $10,000 recently), exchange rates are obviously a key element of car pricing.