FORMULA boats

No you are right, but my point was that for a domestic US boat, $300,000 plus tax and delivery was sodding dear. Suprised in the US market they can get away with it. If they are subsidising their finance a bit explains it
 
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Good point and something I've referred to in previous posts myself. The price of boats from US $ demoninated countries have not reduced at all. Why is'nt a Trader, for example, which is made in Taiwan, much cheaper now then it was a few years ago thanks to the fall in the $? Chris Crafts are terribly expensive in the UK compared to Euro built boats. Why?
It can only be as you say that the importers are making an absolute killing. They may try to justify that by saying that they are keeping up new prices to protect used values but it's a rip off all the same

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Because businesses sell products at market value (ie, what they can get for them).

If you sold your house tomorrow, you'd ask market value, right? You presumably wouldn't say "well we didn't pay anything like that so we'll sell it for half what we can get for it".

Or to put it another way, if the exchange rate went the other way, would you think "poor dealer, I'll pay double for the boat cos it's costing the poor chap more"? Of course not, you'd look at what was on the market and pay no more than relative to that.

Same as the dealer is doing now, lookig at the market and pricing relative to that.
 
Not true. My own business involves selling high value capital equipment sourced from overseas and our prices go up and down with the exchange rate. Yes we could maintain our prices during times when the exchange rate is favourable but then we would'nt have an argument with our customers to raise prices when the rate is less favourable
Anyway, the other reason for lowering prices when the rate is more favourable is to gain market share. You have to ask why dealers in $ denominated boats are'nt flooding the market with cheap new boats. If I had the chance to damage my competitors in this way, I would'nt think twice about it. I think the boat selling industry is all a bit too cosy
To take your last point, no dealer is going to sell boats at a loss so their prices are going to go up if the exchange rate goes against them
 
Ok so how about cars? Do Jeep Cherokees suddenly halve in price at your local showroom due to favourable exchange rates? Or, like every other retail business do they simply price them relative to the market.

Why aren't house builders selling houses much cheaper? Sure, the land is dearer now, but the build costs are much the same yet they sell them at three times what they cost six years ago (or whatever) because that's what the market will stand, that's what people will pay.

You think Rolex watches really cost twice as much as Omega watches to make..?

Businesses sell their products to the public for as much as the public will pay. Be that cars, boats, houses, watches, whatever.

Are you really honestly telling me that if you were a boat dealer with a shiny new Bayliner outside that, realistically, will sell for £50,000 (say), you think "aww, but poor punter, I paid nothing like that, I'll go out and drop it to £25,000"?
 
We're talking boats not cars or houses. This is what I would expect a well managed boat importer to do. Along comes an unexpected fall in the $ which gives the company an oppurtunity either to increase it's margin based on maintaining it's existing prices or to increase it's sales based on reducing prices or some strategy in between. Obviously which strategy the company goes for also depends on a whole host of other factors like the ability of the manufacturer to meet any increase in demand, the ability of the importer to resource an increase in sales in terms of finance and personnel, likely competitor reaction etc etc. What I can tell you from personal experience is that sitting on your hands just collecting the extra margin from the same level of sales is usually the wrong strategy for the company's long term future and, if an oppurtunity presents itself to make the company grow, it should usually be taken
So thats why I'm disappointed to see no apparent reduction in £ prices of $ denominated boats
One more thing. Jeeps were at one time priced at around the same level as other comparable 4x4's. They are now priced below their direct competitors which I can only assume is due to the importer using the fall in the $ to try to increase his market share
 
We're talking about high value retail items sold to the general public.

It doesn't happen in any other business, why should it happen with boats? Because you fancy cheaper boats?

Do you really think Jeep have reduced their prices out of sheer benevolence? Or because people simply won't pay the same figures they will for their (superior) competitors?
 
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Do you really think Jeep have reduced their prices out of sheer benevolence? Or because people simply won't pay the same figures they will for their (superior) competitors?

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Precisely. They have reduced their prices to maintain market share which is the same strategy as reducing prices to increase market share. They have calculated that they will make more overall margin by adopting this strategy than maintaining their prices and accepting a reduced market share.

As for whether I fancy cheaper boats, does'nt everyone? When I buy my next boat and I'm faced with the choice of, say, an expensive Ferretti and a slightly less expensive Trader, I'm going to pay the extra for the Ferretti. On the other hand, if Mr Chappell were to tempt me with a cheaper price on the Trader which he's capable of offering me given the value of the $, I might change my mind. It's his choice to choose the strategy
 
They've reduced the prices because people will not buy them otherwise. That has nothing to do with exchange rates.

BMW X5's are made in America (I think), and Z4's (again I think) and Mercedes ML's. Do you see them reduced in price due to exchange rates? Do you expect them to be? Is it a "rip off" (the original claim that started this debate) that they don't?

No, because they are sold at market value, just like those Jeeps. Exchange rate doesn't enter into it.
 
We're going round and round the same arguments here. You have your view, I have mine. Let's leave it at that
 
Ari, much as you make a good point that everything is worth what people are willing to pay, I do see Deleted User's point that a beneficial exchange rate can benefit an importer that is willing to pass (as much or as little as they see fit) the savngs onto the consumer for volume of sales. Business 101.

The point is that it seems that US imprters aren't being terribly imaginative. For anyone with a passing interest in business, it seems a wasted opportunity.
 
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