Its a question we get asked all so often. Building a high performance engine or simply modifying your car in Australia is an expensive task, and everyone should be proud of what they have achieved so far.
The industry has been the same for the last 30 years but in the same breath so very different too. We have always had exchange rates to deal with, because lets face it, the most common country all our parts come from is the United States. We have had freight ( air or sea ) and we have had import dutys.
The Australia-United States Free Trade Agreement (AUSFTA) entered into force on 1 January 2005. This Free Trade Agreement in respect to this topic allows anyone to bring in items from the US that have a total value of up to $1000.00AUD (freight is included in this also) escape the import duty costs .
For a Business like Sunset Speed, $1000.00 doesn't cover enough as orders at any one time could be $1000.00 all the way to $100,000.00. So the dutys have to be factored into each part that's for sale. Dutys can consist of the 5% import tax we normally see, GST on cost of shipment and a few other little fees that customs and the freight forwarders put on..
Then Covid happened in the world at the start of 2020, All the freight forwarders had a new charge that's never left , Emergency Situation Surcharge, and this could be anywhere from $25 to $750+ ( that we have personally seen ) depending on the volumetric weight of the shipment. Its a charge we have no say in and its just something else we have to work into our bottom line. Here's hoping this ESS charge will fade out in '23 with the world adjusting to the new normal.
Along with the ESS charge , freight costs themselves tripled! , sea containers that were normally around the $6-8k mark are now $18k!!! . Air freight was changing by the week. and it was only going one way.... up! , many times you just couldn't rely on the cost you seen the week before, there were some skinny margins at this time I can tell you, sometimes it was so bad that our margin evaporated and things were being past on at cost or worse. That's the ugly side of business.
Thankfully now at the start of 2023 as I write this , we have worked really hard with DHL (our go to freight forwarder) to instill a solid price structure that is stable for a longer period of time, Its a very competitive deal now and especially comes out on top to competitors when we ship very large items.
Now we are talking about volumetric weight. All freight moved around the globe is based on weight - physical weight or volumetric weight (whichever is greater). So as a perfect example is a Black Ops Carbon Fibre hood . Made with great pride in San Marcos, California. Renowned as the best fitting aftermarket parts in the industry we swing in. Now the box that hood is shipped in measures 1.8m x 1.8m x .2m and physical weight of box is roughly 30kgs.. In this case the chargeable weight is the volumetric weight. The formula DHL use is L x W x H in cm / 5000 = Volumetric weight in Kilograms.
A black ops hood box 180 x 180 x 20 / 5000 = 129.6 kg !!!
That is what we are charged on, something that really is only 30kg but we are getting charged on 130kgs (rounded).
This started out at a little over $4000.00 just in shipping alone for 1 hood box, but due to some hard work we have managed to get it down to a little over $2000 as of time of writing. Its a deal that would be hard to beat.
So that brings me to the end of the question, Why is is more expensive in Australia than in the USA? Hopefully this has been informative and helps you understand why pricing is where its at, do the math work it out for yourself, you will find us very competitive.
We are happy to be part of your quest for horsepower , and we are available via phone, text and socials for any enquiries.