New EU agreement to cut the cost of European cars in Australia
A new free trade agreement trims the cost to import popular European cars, but there’s no guarantee car brands will pass on the savings.
Most European cars imported to Australia could get cheaper, as tariffs on European-built cars will be scrapped under a new newly signed free trade agreement between the European Union and Australia.
As previously reported by Drive, this deal means the price of over 100 European-built cars sold in Australia could drop, including the Volkswagen Golf, Audi Q3, and Mercedes-Benz GLC.
European-built vehicles also include an array of vehicles from non-European brands that are manufactured in Europe and exported to Australia, such as the Hyundai i30 N hatch built in the Czech Republic.
The only European-made cars currently exempt from the import tariff are electric vehicles priced below the Luxury Car Tax threshold – currently $91,387 for these models – under legislation introduced in 2022.
MORE: Cars that could get cheaper in Australia with Europe free-trade deal
The import tariff is charged to the car maker as 5 per cent of the value of the vehicle, as it is declared on arrival in Australia – not 5 per cent on top of the showroom price that consumers see, which includes profit margin for the car manufacturer and the dealership.
It means it is at the discretion of car companies to pass on the cost reduction, or keep the savings to themselves and boost their profit margins, possibly to give them room to discount the vehicle in showrooms at a later date.
The servicing costs of European vehicles could also drop, with European automotive parts becoming duty-free alongside 97.6 per cent of all EU exports to Australia.
The trade deal was signed yesterday by Prime Minister Anthony Albanese and EU Commission President Ursula von der Leyen, with Albanese saying – among remarks concerning the benefits for Australian goods flowing into Europe – that the deal would lower the cost of European goods in Australia.
“This benefits Australian consumers and companies too, with greater choice in goods and services at lower prices,” Albanese said.
MORE: Luxury Car Tax to be wound back for electric cars, but not axed entirely
In another potential boon for consumers, manufacturers of European built cars will no longer need to put their vehicles through tests the vehicles have already passed in Europe before they can be sold in Australia.
“Australia has agreed to accept EU type-approval certificates for a wide range of vehicle categories,” A statement on the EU’s website states.
“This type-approval acceptance means that, where EU and Australian rules coincide, there will be no extra testing or marking requirements required for the Australian market.”
Australia’s Luxury Car Tax (LCT) has also been eased for electric cars as part of the deal, raising the price threshold before cars are hit by the tax from $91,387 to $120,000.
The post New EU agreement to cut the cost of European cars in Australia appeared first on Drive.
Komentar
Posting Komentar