SYDNEY: The federal government has at last been handed a good-news story that relieves the hip-pockets of the aspirational class: car prices are falling thanks to the free-trade agreements with Japan and South Korea.
Although the Japan-Australia agreement does not come into effect until next Thursday, Japanese manufacturers Mazda, Subaru and Toyota are cutting prices early.
Trade and Investment Minister Andrew Robb welcomed the move: “This is an example of the real impact that families will see from these agreements, with cuts of up to $7600 from Toyota’s biggest-selling models.”
The trade deal removes the 5 per cent tariff that generally applies for imported vehicles. The FTA with South Korea is already in force, also removing the tariff.
The biggest Korean car-maker, Hyundai, says it will provide Australians with better deals, but details have not yet emerged.
The benefits to Australian drivers come from the vehicles made in Japan and South Korea, not from those manufactured elsewhere by those companies — in some countries with which Australia already has FTAs. Thus the Kluger, made in the US, the HiLux, in Thailand and the Australian-made Camry and Aurion will not be reduced.
Japan is best placed to make cuts because its yen has been pushed down against the US dollar further than the Australian dollar has fallen, making all its products cheaper.
Toyota’s executive director of sales and marketing, Tony Cramb, said the company — Australia’s most popular brand for the past 12 years, but which will stop manufacturing in the country by 2017 — “decided to act from the start of 2015 by lowering prices immediately rather than waiting for the duty reductions that will start flowing from January 15’’.
The cheapest cars will fall in price by about $800, and the most expensive by $7630. Some Mazda cars will be reduced by almost $1000.
