Hedging Volkswagens

It is well known amongst Australians that European cars sell for a premium in Australia. For some years, the term "European car" has been synonymous with "luxury car". However, the progressive reduction of import tariffs has greatly changed the situation. Take the popular Volkswagen Golf:



This chart shows that the cheapest Golf in Australia is now two-thirds the price of the cheapest Golf in the UK. Even more surprisingly, given these comparitive prices, the Australian Golf has far better specifications.

UK 3-door Golf S £17,175 / AU$32,750
1.2 litre TSI engine, 85 horsepower (63 kilowatts), 5 speed manual.

Australia 5-door 90TSI £11,850 / AU$22,990
1.4 litre TSI engine, 122 horsepower (90 kilowatts), 6 speed manual.

Are Australian Golf buyers receiving the benefit of an amazingly good currency hedging strategy by the Golf importers? Whatever the reason, it's not surprising to see so many new Golfs in Australia these days.