VW on import duty watch

VOLKSWAGEN is taking a wait-and-see approach on next year’s five per cent duty cut before deciding if it will pass it on to customers.

Speaking at the launch of the Golf 77TDI and MY10 Jetta range in Melbourne, Volkswagen Group Australia managing director Anka Koeckler said VW was holding back to assess how rival manufacturers and importers reacted to the duty drop before it made a move.

The price of the recently released Golf GTI was the first to reflect the lower import duty – down from ten to five per cent from January 1 2010 – when it went on sale on October 31.

While prices of the MY10 Jetta have also been reduced – by at least $2000 in the case of the volume-selling 118TSI petrol and 103TDI diesel versions – the newly released Golf 77TDI Trendline is more expensive than anticipated.

The latest base-model Golf diesel costs $2700 more than the 90TSI Trendline, while the last-generation Golf 1.9 TDI Trendline – its direct predecessor – was only $2500 more expensive than its base petrol equivalent, the Golf 1.6 Trendline.

Left: Volkswagen Group Australia managing director Anka Koeckler.

Nevertheless, Volkswagen has indicated that a downward price movement for the rest of its passenger car range is probably inevitable.

“We are considering it, but we do not want to reveal the new prices just yet because we are still in negotiations with Germany,” Ms Koeckler said.

“Every time they (flag) price increases we have to figure out how to manage them.

“And we also have to look at what the competition is doing – there has been nothing communicated from Ford or Toyota (for example), so we are looking at what they are doing.

“Mazda, of course, has already made its move, but it is the only competitor so far. And we don’t want to be (among) the first and we don’t want to be the last to communicate what we are going to do.”

Ms Koeckler added that the model-year change time, which tended to occur late in the year, was the best opportunity to implement pricing adjustments.

“We have already communicated (a price drop) for the Jetta and Golf GTI over the last few weeks,” she said.

“We assumed a five per cent (price drop strategy), because we did not want to have to come back to the customer in two months time and communicate (a different pricing strategy).

“Assuming that the government will not change (the duty drop), we have already taken the responsibility to pass on the savings (for new Golf GTI and Jetta buyers).”

In contrast to Mazda’s pre-emptive marketing strike that has already seen prices fall across the range, rival Subaru announced earlier this month that it would most probably not pass on any duty related price falls, due to the slim margins that it has operated on over the last 12 to 18 months.