5 December 2023

You'll be able to buy a new car from Costco soon ... Or will you?

| James Coleman
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Costco’s Canberra store is awaiting confirmation on when the cars will arrive. Photo: Michelle Kroll.

As if a 110-inch TV, enormous stuffed teddy bear, and 44-gallon drum of Chupa Chups weren’t enough, soon you’ll be able to add another item to your Costco shopping list.

A 2023 Hyundai Palisade, perhaps? Yep, the US wholesaler chain has teamed up with Queensland-based company Autoreviewa to expand a pilot program and begin selling cars across its 15 Australian centres, including here in Canberra.

Established dealerships, however, aren’t convinced it will ultimately get off the ground.

Called Autoconnect‘, it’s said to offer a range of SUVs, utes, motorbikes, and EVs online at “discount” prices, while space will also be set aside inside each warehouse for up to three vehicles.

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In the same way Costco staff members run sample stalls for food items, representatives from the brand or dealership will be invited to host displays to boost awareness and answer queries.

It’s understood there will also be test-drive “events”.

The idea is nothing new for Costco. Around 775,000 cars are sold from their warehouses in the US each year, and a similar program also operates in Canada and the UK. The deal with Autoreviewa and its founder Josh Williams was four years in the making.

Costco has 1.5 million members across 15 locations in Australia, with an average traffic of 25,000 shoppers per warehouse per week. Standard membership costs $65 a year, while executive membership – with extra services, rewards and offers targeted at businesses – costs $130 a year.

Cars for sale

Discounts are available to Costco members on the Autoconnect website. Photo: Screenshot.

Costco uses this income to cap its retail margin and promises the same with the cars.

Brands or dealers will pay a fee to join the program and then be expected to come up with “great deals and substantial discounts” unlike any available elsewhere.

Cars from LDV, Hyundai, Jeep, Kia, Mahindra, Mazda, MG, Nissan, Skoda, SsangYong, Volkswagen and Volvo are currently available to buy in Queensland, with most discounts ranging between $3000 and $7000.

Customers under the executive membership scheme will also receive a Costco gift voucher when they purchase a car.

This can be worth up to $300 depending on the value of the car and another $300 if the buyer takes a loan through Autoconnect, again depending on the value of the loan.

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Queensland warehouses are already running a soft launch of the program, and it’s rolling out across Costco’s NSW and Victoria locations over the coming week and then other states from the beginning of next year. New Zealand is also set to follow.

Region contacted the Canberra store (at Majura Park) and was told it was still awaiting confirmation from the head office on when cars would be available.

A spokesperson from a large dealership network in Canberra (who wishes to remain anonymous) is surprised dealers would supply cars through the discount chain as “no car brand would want to intentionally rob business from its dealerships”.

“I don’t want the brand selling my cars at Costco.”

Because of this, the spokesperson “can’t see how it will ever take off”.

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Capital Retro12:46 pm 11 Dec 23

A lot of people I know buy their new cars interstate. They save thousands of dollars.

Michael Pless11:07 am 11 Dec 23

I’m somewhat averse to paying to enter a shop, but if it results in savings above the cost of entry, then I’d be okay with it. The (Channel 9) news covered the Autoconnect feature of Costco and mentioned there was nothing to stop anyone getting a quote online and then walking into a dealership and asking them to better it and this is good for the consumer. So a good thing then, although some distributors are moving to a “no haggling” model of doing business, which isn’t such a good thing. The link in the article, when I entered my postcode came up with one result only: a lumbering 4WD ute which I have no interest in at all, but this may clear after the site is fully up and running.

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