Market Insight: Volume German cars raise prices
KEY German brands are raising the price bar with retail hikes for BMW, Audi, Volkswagen and by mid-year, Porsche, as EV expenses grow and shareholders demand greater profits.
BMW Australia last month raised prices by up to $9000 and followed a previous increase in January that pushed prices up by between $1600 and $11,500.
Most of the big increases were in the sport and luxury models, such as the M3 costing about $2500 more in April than previously; the M4 variants up $2600-$2800; the M5 up $4000; M8 up $5600; and X7 up $8000.
Since April 2022, price rises in these models have risen by 5 per cent ($8300) for the entry M3; $8400 or 5 per cent for the M4; 5.5 per cent or $14,700 for the M5; and 3 per cent ($11,500) for the M8.
Even the electric models weren’t insulated, with some variants of the i4 up $3000-$4000; the i7 up $9000 (xDrive60); and iX up $5500.
But BMW, conscious like its peers that EVs must remain – or be seen to remain – affordable, did hold back on the iX3 pricing that remains at $104,900 and the iX1 at $84,900.
In its less exotic (and non-EV) models, the base 118i went up $900 to $54,800; the 320i rose $1300 to $80,200; the 520i lifted $2000 to $107,700; while the smallest SUV, the X1 sDrive18i, remained at $60,400; and the entry X3 sDrive20i lifted $1400 to $83,100.
BMW was hardly alone. Germany’s premier volume sports-car maker Porsche is poised to lift prices but made the unusual stance of telling the world about it before it was due to happen.
Porsche kindly warned buyers that a price hike was on the way. In March it made a global announcement saying it will make “significant price increases” in the middle of this year.
The move was said to buoy profits and produce a deliberate price gap between its ongoing ICE models and its expanding EV range. The future EV versions of the Macan, Boxster and Cayenne are expected to rise 10-15 per cent higher than ICE versions.
Currently, Porsche’s entry-level Boxster is $122,000 and the cheapest Macan is $89,300 (all plus on-road costs).
In June last year Porsche raised prices on some models – but not the 911 – by up to $15,800 for the Cayenne Coupe Turbo GT which is now $351,900.
The cheapest Macan is now $89,300, up from $84,800 mid-2022.
Audi lifted prices by up to $2900 (RS7) in January for most models. This followed two price increases for selected variants in 2022.
Price increases in January were made to a number of models, including the A1 (up $450 to $1050 depending on variant); A3 (up $600-$1000); A4 ($600-$1600); A5 (up $200-$1500); A6 ($1200-$2900); and the A7 which rose between $1700 and $2900.
In its SUV range, Audi lifted some versions of the Q2 by $500 to $1000; Q5 ($700-$1800); and the Q7 ($1800-$2300).
One model that didn’t incur a price rise was its electric e-tron GT that still costs $180,200 (plus costs) which was its original price when launched in February.
In April 2022, the cheapest e-tron was $139,900 but the variants and equipment levels have changed.
In February the e-tron entry-level was $147,400 which has remained static today, perhaps another OEM’s example of a desire to firm EV model prices while boosting the revenue from ICE models.
Audi has previously cited price increases in raw materials as the prime reason for the rise in new-car pricing.
Volkswagen has also announced price rises applying from June to seven of its nine model lines. It said the prices will rise by between $500 and $3600 although it won’t affect people who order before the June deadline.
It is the third round of price rises at Volkswagen in nine months, following one in September and another in December.
The company said the increases are attributed to increased production costs and the effects of inflation.
Examples of the price rises since April 2022 include the Golf 110TSI Life which is now $37,490 (a rise of $2200 in the year); Golf GTI (up $1000); Passat 162TSI Elegance wagon ($1200); T-Cross 85TSI Life (up $1140); Tiguan 132TSI Life 5-seat (up $1000); and Touareg 210TDI Elegance, up $4550.