When will AM put new car prices up to reflect Brexit?
Discussion
I don't know how much of each car comes from overseas but guessing it must be fairly material (engine, gearbox, brakes?)
So presumably they will need to put prices up at some point to reflect the weak pound? Guessing they won't apply retrospectively to existing orders. But presumably if you were thinking of buying a new car sooner might be better than later
On the plus-side if new car prices go up the value of used ones might be more resilient too
So presumably they will need to put prices up at some point to reflect the weak pound? Guessing they won't apply retrospectively to existing orders. But presumably if you were thinking of buying a new car sooner might be better than later
On the plus-side if new car prices go up the value of used ones might be more resilient too
Engine, gearbox, brakes are the obvious majors from abroad, but many UK components.
With about 80% of production being exported, of course the exchange rate movement might boost those sales.
Sometimes car buyers have to pay more after the order. I suppose it depends upon the contract.
Edited by Jon39 on Saturday 25th June 10:19
Don't see where this is coming from, do AM put the prices up and down depending on the state of the pound?
To start with the value of imported parts will be small compared to sales price.
And why are sales falling, could easily go up as domestic demand increases due to new increased confidence in our expanding worldwide economy, stay positive ☺
To start with the value of imported parts will be small compared to sales price.
And why are sales falling, could easily go up as domestic demand increases due to new increased confidence in our expanding worldwide economy, stay positive ☺
kipv12 said:
Don't see where this is coming from, do AM put the prices up and down depending on the state of the pound?
To start with the value of imported parts will be small compared to sales price.
And why are sales falling, could easily go up as domestic demand increases due to new increased confidence in our expanding worldwide economy, stay positive ?
Thanks but I'm trying to make a serious point here for prospective buyers. To start with the value of imported parts will be small compared to sales price.
And why are sales falling, could easily go up as domestic demand increases due to new increased confidence in our expanding worldwide economy, stay positive ?
The cost of imported parts is clearly going to be very material; I think last time they presented to bond investors the average gross margin iirc was something list over £100k a car. But clearly a lot less for say a vantage than a vanquish. So if you see a 20% increase in the cost of engines, gearbox, brakes, electrical gubbons from Mercedes it is going to be significant.and it's not as if AML can afford to cut profit margins overall
At some stage I would imagine AML will move prices to reflect their higher input costs - they could presumably look to accept lower UK margins and compensate via higher export margins, but I would imagine they would prefer to see a boost to overseas sales (particularly the US) by cutting retail prices in the RoW
So assuming they don't want to chop UK margins my point is when will they put that price increase through? Do they wait for the change in model year? That would make a lot of sense to me.
And as I said, looking for the silver lining this could be good news for values of used cars, all other things being equal
It all just says to me that any prospective buyer (new or used) might want to think about pulling the trigger sooner rather than later
The pound hit a 35 year low vs the dollar at one point early Friday, before bouncing (partly on rumours of BoE intervention). But I agree AML will presumably need to see how things settle over the next month or so
Not sure they would use much hedging though, given the sales mix they're net beneficiaries from a weak pound (even more so with the development of the Welsh plant)
Not sure they would use much hedging though, given the sales mix they're net beneficiaries from a weak pound (even more so with the development of the Welsh plant)
Don't know if this link helps with an insight into AM management views on Brexit:
http://www.cityam.com/244086/aston-martin-go-ahead...
Basically no change but maybe more productivity improvements.
I read a list of comments by various motor manufacturers in Autocar, none of them seemed concerned.
Maybe they didn't get the memo from Cameron during the campaign?
http://www.cityam.com/244086/aston-martin-go-ahead...
Basically no change but maybe more productivity improvements.
I read a list of comments by various motor manufacturers in Autocar, none of them seemed concerned.
Maybe they didn't get the memo from Cameron during the campaign?
NickXX said:
What proportion of sales go overseas though? Surely the company will be partially if not fully hedged through sales in Euros to the European market?
I know they sell more overseas than they do in the UK, will dig out the bond prospectus when back in the office next week and dig out the numbers. So overall the company should be a net beneficiary from weaker sterling. But the UK division will be less so than before without a changeMaybe they could bring the V12 production to the UK from Germany?
Like the MNE I work for, AM will benefit from the lower GBP as 60-80% of their sales are abroad and assuming they will manage to pass on some of the drop to customers (and not dealers). But effectively prices will rise for EU made components which would only become worse if tariffs come into play. So I can imagine new car GBP prices will rise for UK buyers.
Tariffs....what tariffs.....more speculation....the eu will need to do business with us....its in their own interest .....putting any form of tariff on any future trade deals would be suicide for a lot of small companies based in Europe....besides...believe it or not there are other countries on this planet we can deal with...wiThout tariffs.....ASTON if you recall didn't do to bad when owned by ford.....an American company.....
12pack said:
Like the MNE I work for, AM will benefit from the lower GBP as 60-80% of their sales are abroad and assuming they will manage to pass on some of the drop to customers (and not dealers). But effectively prices will rise for EU made components which would only become worse if tariffs come into play. So I can imagine new car GBP prices will rise for UK buyers.
This sounds about right- given the proportions mentioned by Jon, they'll benefit from the reduced value of the pound, although domestic prices would likely rise. This would make sense given that the company was a late backer of Brexit.
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