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Why do Aussie Rams cost over a hundred grand?

by David Zatz on

Pricing for the Australian version of the 2018 Ram 1500 — the prior generation, which is still being produced — has been announced at last. There are only two varieties, the Express Quad Cab and Laramie Crew Cab, and they are only sold with Hemi V8 engines. Buyers can get rear or four wheel drive (part-time on Express, full-time on Laramie), with an optional Blacktop-style “Black Pack.”

Ram 1500 prices in Australia

All that comes for AU$79,950 — which was, when this was written, $60,594 in US dollars. The Laramie starts at AU$99,950, or US$75,752.

Why does it cost so much? The question really first arose when Stephen Claydon, who tipped me off on Ram 2500 pricing as well, turned out to start at over US$100,000.

Around ten percent of the price is Australia’s national Goods and Services Tax (GST), which is distributed to the states, replacing various other taxes. Take off 10% for the GST, and the Ram 1500 starts at around US$54,535.

2017 Ram Laramie LonghornPretend the steering wheel is on the left, please.

There is a 33% luxury car tax on the price of any vehicle above $66,331 (that is, the part over $66,331).  These prices also include destination charges ($1,645 in the USA) and the $1,450 Hemi V8 option.

That brings the price of the Ram 1500 to a US-equivalent in the mid-$40,000 range, compared with a US price of $40,490 (before, at this moment, $3,250 in incentives). That’s a sensible difference: it costs a great deal to convert trucks to right hand drive (which is to say, changing the steering and dashboard so you can drive on the other side of the road). They also have to assure full conformity with Australian law, presumably go through local safety and emissions test, and then support owners across a huge continent with relatively few big pickup sales.

The same calculations on a Ram 2500 show the initial US$100,000 selling price is far more understandable than it initially seems.

Aussie publication BehindTheWheel compared the Ram with the Colorado Z71, Ranger Wild Trak, and  HiLux (Tacoma) Rouge, as well as the Silverado and F-250 (which are converted by local importers, like the Ram), and concluded that “it will set a benchmark for the upper end of the luxury Ute segment.” They pointed to its high towing capacity, long bed, interior space, V8, “higher levels of interior comfort,” four-wheel disc brakes, and RamBoxes, and seemed to find the pricing to be sensible.  They consider the Ram to be “remanufactured” in Australia; the conversion takes place in a “state of the art” facility in Melbourne. Presumably there’s room for growth, since Ram reportedly has designs on a larger chunk of the Australian market; and the 2019 Ram 1500 may have been created with ease of RHD conversion in mind.

There is certainly a market for the big Rams; the question is how large it is. The larger the market, the more the price can drop.

Original story: CarAdvice

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