Buyers paying too much for luxury cars

Luxury car buyers in Australia are paying too much, according to a British exotic brand that has just slashed a massive $100,000 from its local pricetags.

McLaren, a top-end sports car maker that rivals Ferrari and Lamborghini, has even promised refunds to existing owners at trade-in time.

Its move to cut about 19 per cent from its Australian pricetags follows similar - but less dramatic - price cuts by Rolls-Royce and Porsche over the past six months.

Other top-end brands, including Mercedes-Benz, say they are compensating their customers by adding extra equipment and also trying to reduce showroom stickers when they introduce all-new models. But McLaren says it's all about the bottom line.

“McLaren believes the super-luxury sports car segment has been historically over-priced in Australia, with a number of the ‘core’ manufacturers employing premium-pricing policies in this market,” says Ian Gorsuch, Asia-Pacific director at McLaren Automotive.

Many upscale brands have been raking in big profits from the strength of the Australian dollar, even though they say they also have to build businesses that can cope with inevitable downturns in exchange rates, and even companies such as Holden are using profits on imports to offset their losses in local manufacturing.

But lots of luxury customers are paying well below the showroom stickers and McLaren says this discounting has helped to drive its new move.

“McLaren's revised pricing reflects the changing expectations of customers in this category in Australia,” says Gorsuch. “Many... have become accustomed to paying significantly less than the advertised recommended retail price, as competitors in the category heavily discount.”

But the McLaren move is not just about premium pricing. The brand has been struggling for traction in Australia and has been under-achieving globally on its sales targets, despite its bullish plans for a full range of cars - including the new P1 supercar - to go head-to-head with Ferrari.

Only seven of its MP4-12Cs have been delivered this year, with no sales reported in April. In contrast, Ferrari's running total for 2013 is 34 cars and eight in April, while even Lamborghini has managed 30 cars with six last month.

Ferrari Australia also has six confirmed orders for the brand's outrageous LaFerrari flagship, even though it has a pricetag of more than $1.5 million and - because it is only built with left-hand drive - cannot be driven on local roads.

The bottom line on the McLaren price cuts is a reduction from $492,100 to $398,000 for the 12C coupe and a cut from $543,900 to $441,780 for the 12C Spider. “The revised pricing offers absolute transparency to customers,” McLaren says.

And the cuts will also be passed on, indirectly, to 12C owners who move on to another McLaren in the future. “McLaren will provide support in the form of a special trade-in allowance to all existing owners at the time of trading their current 12Cs for a new model within McLaren's range.”

This reporter is on Twitter: @paulwardgover