How To Spot Car Value In 'buy Aussie' Campaign
Sun Herald
Saturday October 7, 1989
WITH the nation staggering under the weight of another massive current account deficit, the Government is resurrecting the "Buy Aussie" campaign.
Only days before the latest $2.7 billion trade deficit figures, Aussie ad man John Singleton was handed the contract to flog Oz to Aussies.
But will this really make much difference? Can consumers turn around our import imbalance?
In the motor car industry at least, anyone intent on loyalty to the local product will find it easy because you have little choice.
Anyone looking for a medium to large car - in the $17,000-$25,000 price range - won't find very much opposition from imports. The buyer is virtually restricted to the home-grown output - and so crusades to "buy local" in this market represent dramatic overkill.
The simple facts in the car market are:
* The effect of a weaker dollar, plus import duty, permit only a 9 per cent import penetration into the non-luxury medium to large-car market.
* In the small-car market the "outsiders" are more of a threat - but still only snatch 22pc of total sales.
* The real foreign challenge comes in the four-wheel-drive and commercial markets where, apart from utilities, we don't even fly the flag.
* Only one-fifth of car imports are luxury vehicles.
* By international standards we are not overdoing the car-import treachery
In other words, the import threat is not nearly as big to local car makers as it is to the import bill.
Clearly, van and truck buyers have to purchase imports, while four-wheel-drive yuppies could plant their riding boots into a Commodore and do the bush a favour.
But that's unlikely. In fact, a big Buy Aussie campaign might even push the price of cars up, as local producers still have production capacity problems.
Serious threat
The reality is that most Aussie buyers will be lining up for a home-grown auto - and so his or her prime concern should rightly remain seeking value for money.
The medium to large-car market in the popular price range is made up of cars listed in TABLE 1.
The first three boast six cylinders - and their price reflects their power. The latter three are "big fours", and are fully imported. The Magna is the first "four" to threaten seriously the "sixes" on their own patch.
Only the Mazda 626 is on the big-price side - and that's a pity because it rates very highly on reliability.
The foreign brigade has hardly put a dent in the local market, taking only 9pc of this most important medium to large-car market.
More surprising is the fact that 91pc of buyers in this range choose"home-made" cars, which suggests we are a captive audience.
Ironically, the Automotive Industry Association recently put the knockers on the industry, claiming our vehicles were overpriced and of dodgy quality.
Worse still, the purchase price of that so-called four-wheel rip-off in the driveway takes 41 weeks for the average wage-earner to cover, while five years ago it took only 32.
Given that my fellow countrymen are virtually forced to do the right thing by the balance of payments, I resolved to investigate the local crop to find the best. I also had a vested interest in this crusade, as I was in the market for a car myself.
So, what do the experts say? (See TABLE 3.)
They were asked if they were given $20,000 to $25,000, which local car would they go for?
As you can see, no universal consensus exists, which coerced me to look for other criteria upon which my final selection should rest.
I reasoned that a comparison of resale prices might indicate that some models' "high-price retention" would indicate quality.
But no one car lost or held value better than others. (See TABLE 2.)
Another blind alley |
Well, what about the price of replacement parts? (See TABLE 4.)
The star performer here was the Magna. In fact, in terms of service costs, the Magna continued to look good.
According to Nissan's service people, only the Magna beat its service cheapness, though Nissan does point out that Magna requires some extras in special conditions, which left Nissan as the most economical for servicing.
What about safety?
Blind alleys again | You see, while Australian design rules prescribe minimum standards for crash performance of cars sold here, the results are not publicly available, as they are in the US. Inevitably, the final test to consider is the warranty a car manufacturer is willing to "give away."
Holden, Toyota and Ford offer 12 months or 20,000km. Mitsubishi gives a 12-month unlimited warranty, while Nissan has opened the purse strings to back its product with a 24-month or 40,000km no-cost warranty.
And, unlike the Mazda three-year warranty which is matched by a noticeable price difference, the Skyline is, in fact, the lowest priced "six" on the local market.
In the end, I gave full rein to the economist in me and plugged for a Skyline wagon, which the learned motoring scribes agreed was a most underrated performer.
TABLE 1: WHAT YOU'LL PAY
BASIC CAR 1989 PRICE
FALCON GL $21,362
COMMODORE EXEC $21,640
SKYLINE GX $20,570
MAGNA GLX $18,186
CAMRY CS $18,076
TELSTAR GL $18,294
MAZDA 626 $24,000
HYUNDAI SONATA GL $19,500
* Add on-road costs
TABLE 2: VALUE AFTER 1 YR
Car 1988 1989
price 2nd hand
COMMODORE Exec $20,014 $14,680
FALCON GL 5-speed $20,014 $14,530
CAMRY 5-speed $16,385 $12,020
CAMRY CSX-X $20,655 $15,445
SKYLINE $19,785 $14,495
MAGNA GLX $17,349 $12,680
MAGNA SE $20,540 $15,230 Source: Red Book
TABLE 3: WHAT THE EXPERTS TIP
Alan Kennedy Angus McKenzie Peter Caldwell Mr "X" Greg Kable
SMH Modern Motor NRMA NRMA Wheels
Magna Commodore "Too complex Camry Commodore
Skyline Magna to generalise" Skyline
Magna
TABLE 4: COST OF AN 'OOPS'
Camry Magna Falcon Skyline Commodore
Windscreen $208 $205 $254 $194 $265
Aerial $27 $43 $80 $41 $14
Headlamp $267 $156 $150 $214 $135
Front bumper $68 $112 $250 $194 $187
Rear bumper $77 $100 $250 $347 $254
TOTAL $647 $616 $984 $990 $855
© 1989 Sun Herald
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