Beadle
Well-Known Member
Its a case of - if your living from hand to mouth - then you'd better be ambidexterous.
Marine Goodies Due for Sharp Increases in Cost
- Thread starter savageseadog
- Start date
robp
Well-Known Member
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(P.S. Maybe a good time to get into farming)
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Or, as we're going to be third world in a minute, the manufacture of small electronic goods /forums/images/graemlins/smile.gif
If only we could remember how to make more than ten at a time...
(P.S. Maybe a good time to get into farming)
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Or, as we're going to be third world in a minute, the manufacture of small electronic goods /forums/images/graemlins/smile.gif
If only we could remember how to make more than ten at a time...
wotayottie
Well-Known Member
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I wonder how the idiot in charge of the Bank of England will justify his prediction of negative inlation when all these price rises take effect.
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since when has anything you wanted to buy (as opposed to the basics you have to buy) been in the RPI? It bears not the slightest relationship to the cost of important things like marina fees
I wonder how the idiot in charge of the Bank of England will justify his prediction of negative inlation when all these price rises take effect.
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since when has anything you wanted to buy (as opposed to the basics you have to buy) been in the RPI? It bears not the slightest relationship to the cost of important things like marina fees
Twister_Ken
Well-Known Member
Worth remembering that while the exchange rate may have headed South, so have commodity prices - so raw materials should be much the same, or even down a bit, in Sterling terms. At the same time far eastern factories that have been living off buoyant Western demand, are now facing an order drought, so they ought to be prepared to drop prices, especially if the procurement people at the gizmo companies are worth their salaries.
The real question, though, is what level of demand there will be. Maybe not enough to sustain all the current players.
The real question, though, is what level of demand there will be. Maybe not enough to sustain all the current players.
Rivers & creeks
Well-Known Member
...and even though the currency has dropped 30% the price shouldn't go up by anything like that. The 30% only applies to the Taiwanese factory gate price, the shipping is paid in sterling, the import, UK transportation, UK distributors, chandlers costs and profit are all sterling.
Sounds like another media inspired scare story. A few more of those to come yet.
Sounds like another media inspired scare story. A few more of those to come yet.
silver-fox
Well-Known Member
Simon
I think you are absolutely right on your cost analysis and on scare stories. That said, prices reflect what the market will bear not cost plus.
Consequently if this recession is half as bad as I think it is going to be then prices will tumble because demand will shrink.
The old salesman's call "buy now whilst stocks last" shouldn't fool anyone. Has anyone ever had a salesman say to them "don't buy now, the next delivery will be much cheaper"?
Just look at the cost of oil and cars to if you want to see how falling demand drives cost down. Is anyone out there seriously trying to argue that the price of these items will rise in the New Year?
2009 will be a year to pick up bargains in all markets that turn into buyers markets. I expect all boats and boat equipment to fall into that category.
I should mention, at this point, that I am always certain but often wrong /forums/images/graemlins/grin.gif
I think you are absolutely right on your cost analysis and on scare stories. That said, prices reflect what the market will bear not cost plus.
Consequently if this recession is half as bad as I think it is going to be then prices will tumble because demand will shrink.
The old salesman's call "buy now whilst stocks last" shouldn't fool anyone. Has anyone ever had a salesman say to them "don't buy now, the next delivery will be much cheaper"?
Just look at the cost of oil and cars to if you want to see how falling demand drives cost down. Is anyone out there seriously trying to argue that the price of these items will rise in the New Year?
2009 will be a year to pick up bargains in all markets that turn into buyers markets. I expect all boats and boat equipment to fall into that category.
I should mention, at this point, that I am always certain but often wrong /forums/images/graemlins/grin.gif
halcyon
Well-Known Member
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Is anyone out there seriously trying to argue that the price of these items will rise in the New Year?
2009 will be a year to pick up bargains in all markets that turn into buyers markets.
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I have passed your information on to my brother, he will be glad to hear.
This means he will not have to worry about the 5 - 15% price increase already in the pipe line from China he has for next year, or the fact that all the goods arrive in the UK as a dollar price, and then have to be paid at the sterling exchange rate he has. Come the new year he can put his feet up.
Brian
Is anyone out there seriously trying to argue that the price of these items will rise in the New Year?
2009 will be a year to pick up bargains in all markets that turn into buyers markets.
[/ QUOTE ]
I have passed your information on to my brother, he will be glad to hear.
This means he will not have to worry about the 5 - 15% price increase already in the pipe line from China he has for next year, or the fact that all the goods arrive in the UK as a dollar price, and then have to be paid at the sterling exchange rate he has. Come the new year he can put his feet up.
Brian
Phoenix of Hamble
Well-Known Member
Brian,
I think the point is though, that the Chinese exporters are about to learn the hard way about elasticity of demand...... and eventually the prices will have to fall, or their demand will fall through the floor.....
They just haven't ever experienced it before......
I think the point is though, that the Chinese exporters are about to learn the hard way about elasticity of demand...... and eventually the prices will have to fall, or their demand will fall through the floor.....
They just haven't ever experienced it before......
halcyon
Well-Known Member
In my brothers case, thay are working at the manufacturing level.
The UK problem is that the pound has dropped to the dollar, so it's not a big price increase in China, but a increase in cost in UK. The volume that we buy from China is a minute part of the total market. So if the dollar to Euro remains stable, then the price in Euope will be stable, except for the UK, same for other world markets.
So it could be out of our hands, come next year we will see. I am following it with interest as we manufacture are equipment in the UK, so it's nice to see which way prices on inport units will go.
Brian
The UK problem is that the pound has dropped to the dollar, so it's not a big price increase in China, but a increase in cost in UK. The volume that we buy from China is a minute part of the total market. So if the dollar to Euro remains stable, then the price in Euope will be stable, except for the UK, same for other world markets.
So it could be out of our hands, come next year we will see. I am following it with interest as we manufacture are equipment in the UK, so it's nice to see which way prices on inport units will go.
Brian
Twister_Ken
Well-Known Member
Halycon,
I know the European agent for a Chinese electro-mechanical sub-assembly factory. His orders across Europe have fallen dramatically - poor demand is not just a UK problem.
Volvo Truck is an example. It raises the question of whether Volvo truck is a sustainable business in its current form. Any far-eastern suppliers of sub-assemblies for Volvo will be hurting badly.
The same is true in many sectors, I'm sure.
No reason the yotgizmo market should be different.
I know the European agent for a Chinese electro-mechanical sub-assembly factory. His orders across Europe have fallen dramatically - poor demand is not just a UK problem.
Volvo Truck is an example. It raises the question of whether Volvo truck is a sustainable business in its current form. Any far-eastern suppliers of sub-assemblies for Volvo will be hurting badly.
The same is true in many sectors, I'm sure.
No reason the yotgizmo market should be different.
Seven Spades
Well-Known Member
I am in a very competitive market where we have had deflation for over twenty years. Finally it seems that we will have a 7% price increase in January and it is a reflection of the currency movements. Last summer it looked as though raw material costs were going to push up prices but given the reduction in demand and reversal those pressures have been alleviated.
No boat manufacturer is going to drop their Euro price just to keep us Brits happy, prices will rise although most Sweds seem to price in their local currency anyway so that has already happened.
Given the number of manufacturers that have gone bust it seems to me that anyone who will discount for volume in guaranteeing failure. They have to raise prices and make a profit on each boat sold, then scale their work force accordingly. If anything puts them out of business it will be EU employment laws which will force them to make huge pay outs to their work force. Quite frankly it is sad for any individual to loose their job, but it is madness to make an employers pay redundancy. Employers do not shed good staff lightly, but employment protection is a barrier to employment and kick a company when the going gets tough jeopardising further jobs.
No boat manufacturer is going to drop their Euro price just to keep us Brits happy, prices will rise although most Sweds seem to price in their local currency anyway so that has already happened.
Given the number of manufacturers that have gone bust it seems to me that anyone who will discount for volume in guaranteeing failure. They have to raise prices and make a profit on each boat sold, then scale their work force accordingly. If anything puts them out of business it will be EU employment laws which will force them to make huge pay outs to their work force. Quite frankly it is sad for any individual to loose their job, but it is madness to make an employers pay redundancy. Employers do not shed good staff lightly, but employment protection is a barrier to employment and kick a company when the going gets tough jeopardising further jobs.
misterg
Well-Known Member
[ QUOTE ]
... - poor demand is not just a UK problem.
... raises the question of whether Volvo truck is a sustainable business in its current form. Any far-eastern suppliers of sub-assemblies for Volvo will be hurting badly.
The same is true in many sectors, I'm sure.
No reason the yotgizmo market should be different.
[/ QUOTE ]
Ken,
I'm certain demand is down pretty much everywhere, but the Chinese (in particular) foresaw this, and some time ago stopped buying a number of commodities. There has been movement between Euro and RMB pre-'credit crunch' that leaves the RMB ~20% stronger than it was 12 months ago (probably a bit more, I haven't done the maths). It is still feasible to buy options on Euro/USD (=6.8 RMB ish), so euro based companies can hedge against future movements, and both parties can develop a strategy to manage the upward pressure on import prices, but I can see that rise they must.
Now on our little island, off the coast of France, we have the mighty GBP, which attracts next to no interest, and is probably being printed at a rate of knots by now. Where this goes against USD & Euro is anyone's guess, but not of tremendous concern to anybody but ourselves. Anecdotal evidence I have (see above) is that it is effectively impossible (i.e completely uneconomic) to get options on GBP - Euro at the moment, meaning we will have to grin and bear whatever the 'markets' bring. So in Euro land, we have stable, but higher import prices, which purchasers (consumer and business) can anticipate and to some extent absorb, but in GBP land we have the same problem, but hit with an almost random and variable multiplier that currently stands at ~1.3 (drop in GBP vs Euro).
While the supply chain might be able to swallow 10%, or even 20% higher costs, which would keep Euro land happy, I just can't see that they could swallow the 40% or 50% that would be necessary to *maintain* UK prices, let alone reduce them, especially on the reduced sales volume that everybody is expecting.
There are added inflationary pressures from emissions trading (we're all paying more for our electricity because of this already, whether you know it, or not); environmental charges (landfill tax, mandatory recycling targets, etc. which feed into rates bills, compliance with burgeoning legislation - e.g. REACH); employment costs (NI increase, working hours decrease if the opt-out from the WTD is given up, etc.); Russia warning that gas prices are on the up; - the list goes on.
None of this would be so bad if the UK (GBP land) were self-contained - our manufacturers could make a (relative) fortune. Unfortunately, I believe we're net importers of raw materials, energy and food, so prices *have* to rise, because these costs feed forward into everything else.
As regards Volvo Trucks, *anyone* involved with automotive stuff is heading up 51ht creek at the moment. Haulage I would imagine especially so, so I don't think this is a surprise.
This an engineer doing economics, so probably all to pot, but I can't see how GBP land will avoid a period of huge inflation, and widespread domestic business failure. I really don't think we've seen anything yet.
Now that's D&G ! /forums/images/graemlins/grin.gif
Andy
... - poor demand is not just a UK problem.
... raises the question of whether Volvo truck is a sustainable business in its current form. Any far-eastern suppliers of sub-assemblies for Volvo will be hurting badly.
The same is true in many sectors, I'm sure.
No reason the yotgizmo market should be different.
[/ QUOTE ]
Ken,
I'm certain demand is down pretty much everywhere, but the Chinese (in particular) foresaw this, and some time ago stopped buying a number of commodities. There has been movement between Euro and RMB pre-'credit crunch' that leaves the RMB ~20% stronger than it was 12 months ago (probably a bit more, I haven't done the maths). It is still feasible to buy options on Euro/USD (=6.8 RMB ish), so euro based companies can hedge against future movements, and both parties can develop a strategy to manage the upward pressure on import prices, but I can see that rise they must.
Now on our little island, off the coast of France, we have the mighty GBP, which attracts next to no interest, and is probably being printed at a rate of knots by now. Where this goes against USD & Euro is anyone's guess, but not of tremendous concern to anybody but ourselves. Anecdotal evidence I have (see above) is that it is effectively impossible (i.e completely uneconomic) to get options on GBP - Euro at the moment, meaning we will have to grin and bear whatever the 'markets' bring. So in Euro land, we have stable, but higher import prices, which purchasers (consumer and business) can anticipate and to some extent absorb, but in GBP land we have the same problem, but hit with an almost random and variable multiplier that currently stands at ~1.3 (drop in GBP vs Euro).
While the supply chain might be able to swallow 10%, or even 20% higher costs, which would keep Euro land happy, I just can't see that they could swallow the 40% or 50% that would be necessary to *maintain* UK prices, let alone reduce them, especially on the reduced sales volume that everybody is expecting.
There are added inflationary pressures from emissions trading (we're all paying more for our electricity because of this already, whether you know it, or not); environmental charges (landfill tax, mandatory recycling targets, etc. which feed into rates bills, compliance with burgeoning legislation - e.g. REACH); employment costs (NI increase, working hours decrease if the opt-out from the WTD is given up, etc.); Russia warning that gas prices are on the up; - the list goes on.
None of this would be so bad if the UK (GBP land) were self-contained - our manufacturers could make a (relative) fortune. Unfortunately, I believe we're net importers of raw materials, energy and food, so prices *have* to rise, because these costs feed forward into everything else.
As regards Volvo Trucks, *anyone* involved with automotive stuff is heading up 51ht creek at the moment. Haulage I would imagine especially so, so I don't think this is a surprise.
This an engineer doing economics, so probably all to pot, but I can't see how GBP land will avoid a period of huge inflation, and widespread domestic business failure. I really don't think we've seen anything yet.
Now that's D&G ! /forums/images/graemlins/grin.gif
Andy
narooma
Well-Known Member
It would be nice to see the Government putting money into a few power stations so that we might be self-sufficient in electricity and not rely on importing it at ever increasing costs.
Twister_Ken
Well-Known Member
MisterG,
While not disputing anything of what you've said, the facts seem to be that consumption of anything other than essentials is falling off a cliff. Examples beyond automotive. One of the products my Chinese contact makes is keypads for security entry systems, another is lift control panels. Demand for both has almost stopped. In a interview on French TV last night, Dynastar, who make skis and associated kit, said that they have lost two of their competitors in the last two weeks, and they are cutting back production radically. Meanwhile, when we picked up our rentacar a couple of days back, we were the only customers in an office with six front office staff. According to the girl we sorted us out a car the cut back in rental compared with last year is "dramatique". Beneteau recently reported boat sales this year compared with last down fortysomething percent. Shipping costs are one visible aspect of this slowdown, apparently container rates, far-east to Europe have declined steeply.
Whatever the cost and currency basis of production/manufacture/import, on low volumes many business models become unsustainable. Expect bankruptcies, fire sales, special offers galore.
In a rapidly declining market, stock will be priced to sell, whether by the manufacturer, distributor or retailer. That's why I don't buy the "buy now, tomorrow prices go up" argument. A better one might be "buy now, tomorrow we won't be around to make it for you."
Interesting D. Telegraph article here
While not disputing anything of what you've said, the facts seem to be that consumption of anything other than essentials is falling off a cliff. Examples beyond automotive. One of the products my Chinese contact makes is keypads for security entry systems, another is lift control panels. Demand for both has almost stopped. In a interview on French TV last night, Dynastar, who make skis and associated kit, said that they have lost two of their competitors in the last two weeks, and they are cutting back production radically. Meanwhile, when we picked up our rentacar a couple of days back, we were the only customers in an office with six front office staff. According to the girl we sorted us out a car the cut back in rental compared with last year is "dramatique". Beneteau recently reported boat sales this year compared with last down fortysomething percent. Shipping costs are one visible aspect of this slowdown, apparently container rates, far-east to Europe have declined steeply.
Whatever the cost and currency basis of production/manufacture/import, on low volumes many business models become unsustainable. Expect bankruptcies, fire sales, special offers galore.
In a rapidly declining market, stock will be priced to sell, whether by the manufacturer, distributor or retailer. That's why I don't buy the "buy now, tomorrow prices go up" argument. A better one might be "buy now, tomorrow we won't be around to make it for you."
Interesting D. Telegraph article here
misterg
Well-Known Member
[ QUOTE ]
...Whatever the cost and currency basis of production/manufacture/import, on low volumes many business models become unsustainable. Expect bankruptcies, fire sales, special offers galore.
In a rapidly declining market, stock will be priced to sell, whether by the manufacturer, distributor or retailer. That's why I don't buy the "buy now, tomorrow prices go up" argument. A better one might be "buy now, tomorrow we won't be around to make it for you."
...
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I'd go along with that.
Interesting article, but it does nothing to dispel the D&G /forums/images/graemlins/grin.gif
Happy Christmas to everyone in any case.
/forums/images/graemlins/smirk.gif
Andy
...Whatever the cost and currency basis of production/manufacture/import, on low volumes many business models become unsustainable. Expect bankruptcies, fire sales, special offers galore.
In a rapidly declining market, stock will be priced to sell, whether by the manufacturer, distributor or retailer. That's why I don't buy the "buy now, tomorrow prices go up" argument. A better one might be "buy now, tomorrow we won't be around to make it for you."
...
[/ QUOTE ]
I'd go along with that.
Interesting article, but it does nothing to dispel the D&G /forums/images/graemlins/grin.gif
Happy Christmas to everyone in any case.
/forums/images/graemlins/smirk.gif
Andy
ianwoods
Well-Known Member
I heard today from a major South Coast supplier that /forums/images/graemlins/confused.gifYanmar engine prices have gone up from today.
Wished I had ordered replacement earlier.
What chances are there that prices will fall in the New Year or at Boat Show? Or is it all doom with the falling £/Euro rate?
Wished I had ordered replacement earlier.
What chances are there that prices will fall in the New Year or at Boat Show? Or is it all doom with the falling £/Euro rate?
Phoenix of Hamble
Well-Known Member
In recessions prices fall.....
Anyone who is increasing prices hasn't yet faced reality.
Anyone who is increasing prices hasn't yet faced reality.
nimbusgb
Well-Known Member
The posted prices may go up but things are only worth what someone is either willing or capable of paying for them. It the basics such as food , clothes, energy etc start to climb then discretionary purchases get put aside. People learn quickly to make do, repair or simply do without.
Getting my car back from the garage after a service yesterday I was chatting to the proprietor who said that the past 3 months had been very slack ( people putting off services as evidenced by the extra mileage on the odometers over the service interval ) now business had picked up significantly with people deciding to hang on to vehicles that they would have usually replaced ( MOT's up by original owners of now 3 year old cars )
The past 20 years or so have seen prices set by 'what-will-the-market-bear' approaches, I think it will change to a more value driven approach. The hard pressed public will insist on it.
Getting my car back from the garage after a service yesterday I was chatting to the proprietor who said that the past 3 months had been very slack ( people putting off services as evidenced by the extra mileage on the odometers over the service interval ) now business had picked up significantly with people deciding to hang on to vehicles that they would have usually replaced ( MOT's up by original owners of now 3 year old cars )
The past 20 years or so have seen prices set by 'what-will-the-market-bear' approaches, I think it will change to a more value driven approach. The hard pressed public will insist on it.
Seven Spades
Well-Known Member
Well there is no doubt we will see more Ford, Citron and Seat cars on the road and fewer Mercs and BMW's and possibly no Jags at all.
sparkie
Well-Known Member
Having just been quoted £367 for a new door mirror on the Volvo I can't wait for a bit of deflation. Makes marine stuff seem quite cheap, I could buy a new engine for the dinghy for that amount.