Tariff Price Reductions

[Antiplastix]

It doesn t matter any way, if you shop hard there are deals to be done and the prices are very flexible. I m lucky to have two Skoda dealers within 40 kms of home.

[woofy]

I think you are starting from an incorrect premise, I believe most businesses operate to maximise profits, not to be equally "fair" to all their customers. Why should they reduce their price for a prouduct that is selling OK at the current price ? So yes, they are in effect cross-subsidising the base models. They can do that if they want.

They obviously want to increase volumes of the base models, and buyers of these are probably a lot more price sensitive than the people who are willing to pay more for the higher-spec versions (eg vRS).

It is perfectly rational corporate behaviour IMO, albeit slightly annoying if you are currently considering buying a new vRS.

I left out why I was thinking this was a dumb move, Mazda and a few other direct rivals for the RS have passed the full tariff off on all their models. I can understand that they want to make the lower end models cheaper, but when your competition is being a lot more transparent, it makes Skoda look dodgy. It's been said before but half the battle here is that Skoda are being sold at a premium whereas in the UK its a bargain brand, and I really wonder if they can't figure out why the low end Octavias don't sell as well?

[gregozedobe]

It's been said before but half the battle here is that Skoda are being sold at a premium whereas in the UK its a bargain brand, and I really wonder if they can't figure out why the low end Octavias don't sell as well?

I have to agree. I get the impression VWA can't really decide where they want to position Skoda as a brand in Oz.

They certainly aren't doing a very good job at promoting it as the "budget, value-for-money VAG nameplate".

In GB Skodas are significantly cheaper than the equivalent VW model, but here there is little difference once you factor in the discounts that VW are freely offering on Mk 6 Golfs (in fact it looks like the low-end VW wagon will be cheaper than the Octy wagon).

Interestingly enough it is the more expensive Octy models (vRS) that are selling the best here in Oz. It's a bit early to tell how the Superb will do here.

[woofy]

I think the vRS sell well as lots of people know the Gtis and see them as the family version and are used to being reamed by VW price wise.

But in all honesty, when you try to sell a base model Octavia, it's just not value for money here really when you have Accord Euros and Mazda 6s lurking in the same point with well established service and expectations. In some ways its easy to get them selling, exceed expectations and you'll see why they rated so high in the JD Power surveys OS. So far VAG/Skoda have been incredibly underwhelming in their activities, luckily despite that some people have been able to let the car speak for itself.

[Maverick]

Yep I understand that, but when a tax drops it should drop the price in proportion, if the tax was raised I bet it would be equal then. So as I was alluding to, the RS is selling so they are taking the tariff reduction savings there and passing them onto the base model price.

This isn't an end user tax like the GST but a tariff which makes up less than 2.3% of the retail price and they're not obligated in any way to pass this along. How would you like it if they passed on every single increase to areas like shipping, increased production costs and so forth?

[Maverick]

I think the vRS sell well as lots of people know the Gtis and see them as the family version and are used to being reamed by VW price wise.

How do you come to the conclusion that we're being reamed by VW price wise? Take a look at the market size in Australia, the costs of doing business in Australia, the population and how it's spread out, the taxes and duties that add to a car, the ADR's and the list goes on.

But in all honesty, when you try to sell a base model Octavia, it's just not value for money here really when you have Accord Euros and Mazda 6s lurking in the same point with well established service and expectations. In some ways its easy to get them selling, exceed expectations and you'll see why they rated so high in the JD Power surveys OS. So far VAG/Skoda have been incredibly underwhelming in their activities, luckily despite that some people have been able to let the car speak for itself.

Since when are they competing against each other? The Japanese cars are so different to the Skoda/VW's and they generally appeal to different markets. Look at the features and technology you get in the Skoda's and compare it to the lower tech Japanese cars and which company has been working with diesel engines for many many years and has the backing of the worlds largest car companies (soon to be)?

[K1W1]

and which company has been working with diesel engines for many many years

Do the diesel Mazda 626's of the early 1980's count as any sort of extended history of diesel cars?