11 January 2015

Baby boomers have more money than sense

When I was out for my morning run yesterday I paused for a moment to admire the comically overpriced Minis for sale in the car dealership at Kaiwharawhara. I know modern Minis are positioned as premium status symbol compact motoring, a mile away from the utilitarian austerity motoring of Alec Issigonis' original Mini. But the prices being asked for the new cars are simply comical. I get the impression that the prime customer for Minis are cashed-up baby boomers nostalgic for the marque of their youth, but with plenty of ready cash to throw at a more luxury motoring experience. It's certainly a niche marque - while 2014 was a record year for new car sales, figures from the Motor Industry Association show that of the nearly 84,000 new car registrations in New Zealand last year, only 541 (0.6 percent) were Minis; on average, only about 50 new Minis are sold in New Zealand each month.

The car pictured with a ticket price of NZ$44,200 is the Mini Hatch Cooper S. The Mini website is notoriously coy on the subject of actual prices, which is unusual for New Zealand car websites - most of them are reasonably up-front about their asking prices. But the listings summarised in the AA Directions magazine (Summer edition) show the following prices for the New Zealand Mini range:

Mini Hatch Cooper
$36,200
Mini Hatch Cooper S
$44,200
Mini Cooper Countryman
$44,500
Mini Cabrio Cooper
$46,200
Mini Countryman Cooper S
$52,500
Mini Paceman Cooper S
$52,500
Mini Cabrio Cooper S
$54,200
Mini Roadster Cooper S
$55,800
Mini Coupe JCW
$62,200

Let's compare those prices with overseas markets. In Australia the Mini website shows an enormous range of 29 models for sale. This includes the basic Mini model, the Mini One, which is not offered for sale in New Zealand. Here's some comparisons of the Mini prices on offer in Australia:

Model
A$
Equiv. NZ$
NZ margin
Mini One
$28,032
$29,345
n/a
Mini Hatch Cooper
$32,308
$33,821
+7.0%
Mini Hatch Cooper S
$42,917
$44,927
-1.6%
Mini Coupe JCW
$58,104
$60,825
+2.2%

(As sale prices are determined in part by state taxes, I used my friends in Sydney's postcode to determine the potential price). There's not much difference in the prices across the Tasman. The relative similarity between the two markets is interesting, because in a quick survey I did nearly a year ago New Zealand was substantially over-priced in comparison to Australia. It's worth remembering that Australia's per capita wealth is a whopping 62 percent higher than New Zealand's, so the market for pricey small cars is always going to be a great deal bigger in Australia than it is in New Zealand.

Now let's examine Mini prices in the UK, its home market. (Although the marque has been owned by BMW since 1994, when it bought the Rover Group). I've selected the 3-door manual transmission versions in each case.

Model
GBP
Equiv. NZ$
NZ margin
Mini One
£13,750
$26,606
n/a
Mini Hatch Cooper
£15,300
$29,605
+22.2%
Mini Hatch Cooper S
£18,655
$36,097
+22.4%
Mini Coupe JCW
£24,010
$46,460
+33.9%

So there's a fairly consistent healthy markup on the UK prices for the New Zealand market, which doesn't appear particularly justifiable given the cost of sea freight transportation. Or perhaps the reluctance of the New Zealand retailers to display their sticker prices online is just a reflection of the 'reassuringly expensive' margin built-in to their prices - the exclusivity that comes with an inflated price-tag that shuts out most buyers who prioritise value for money.
Post a Comment