why cars are expensive in australia Page 59

Short answer: distance, taxes, and a dash of supply-and-demand sauce.

Australia sits a long way from most factories, so freight, insurance and port costs get baked in early. Then you cop 10% GST, plus a Luxury Car Tax that can sting up to 33% on the portion above its threshold, and occasional import tariffs depending on trade deals. Our market is small and spread out, so fewer units mean less bargaining power and higher per-car dealer and compliance costs to meet Australian Design Rules. Add exchange-rate mood swings, higher labour costs, and the joy of shipping cars across a continent the size of the moon, and prices climb like a roo over a fence. Supply constraints and strong demand for SUVs and utes haven’t exactly helped, either.