RE: Zenos lives on
Thursday 23rd March 2017
"Administrators have today successfully agreed the sale of the assets of British car manufacturer Zenos Cars Limited to a consortium of investors, including the backers of AC Cars Limited, thereby securing the future of the business." So goes the opening paragraph of a press release that's just landed on the PH news desk, bringing a happy conclusion to the uncertain future faced by Zenos Cars after it was forced into administration following cancelled export orders.
According to Autocar the coming weeks will be spent evaluating the cost effectiveness of the business. The Norfolk facility, all intellectual property and the current stock of 10 models were seemingly included in the sale.
Zenos lives on
AC-led consortium buys up Zenos
AC cars currently builds the reborn Cobra 378 models in South Africa, speaking to Autocar, AC owner Alan Lubinsky says it is a possibility Zenos cars could be built on the same line, as well as the possibility of further developments of the E10 as originally laid out in Zenos's long-term plan.
"Zenos has been the recipient of several million pounds of investment from its previous owners and its sports cars have been well received by the specialist media," a spokesman for the consortium says in the press release. "Our team is convinced that Zenos Car's E10 range provides an excellent platform for international sales success and we look forward to moving forwards with exciting plans for its development and growth. We will expand on our plans is due course but have nothing further to add at this time."
[Sources: Autocar]
Discussion
ads_green said:
Tuna said:
Was it established why the export orders were cancelled? The last few months' changes in exchange rates have been very favourable for exporting.
Unless you import any raw materials or components (or your suppliers do) then it's crappy.
ks. Do some maths.
Car 100%.
Imported componets 25%.
75% exchange win.
(Simplified)
Hugh Jarse said:
ads_green said:
Tuna said:
Was it established why the export orders were cancelled? The last few months' changes in exchange rates have been very favourable for exporting.
Unless you import any raw materials or components (or your suppliers do) then it's crappy.ks. Do some maths.
Car 100%.
Imported componets 25%.
75% exchange win.
(Simplified)
- 1 - I'm not a remainer. I may be British but I don't live in the UK.
- 2 - one company I am heavily invested in manufacturers things in the UK. I can say with 100 certainty the magic of the exchange rate collapse boosting exports simply isn't happening (well not to my company for a start).
Yes it's not all doom and gloom and you can manage this (as I know a lot of people who have) but this generally takes reserves and cash to make the required provisions to smooth things out. I doubt zenos had that luxury .
ads_green said:
Hugh Jarse said:
ads_green said:
Tuna said:
Was it established why the export orders were cancelled? The last few months' changes in exchange rates have been very favourable for exporting.
Unless you import any raw materials or components (or your suppliers do) then it's crappy.ks. Do some maths.
Car 100%.
Imported componets 25%.
75% exchange win.
(Simplified)
- 1 - I'm not a remainer. I may be British but I don't live in the UK.
- 2 - one company I am heavily invested in manufacturers things in the UK. I can say with 100 certainty the magic of the exchange rate collapse boosting exports simply isn't happening (well not to my company for a start).
Yes it's not all doom and gloom and you can manage this (as I know a lot of people who have) but this generally takes reserves and cash to make the required provisions to smooth things out. I doubt zenos had that luxury .
At the end of the day, if they were really any good they wouldn't have gone under. They had the looks only a mother could love, performance wasn't really up to much and not practical, if you want something fast and impractical there are better options out there. Accept the dream is dead and stop pumping (alleged) money into something that was basically still-born.
The Crack Fox said:
What track record do AC have in the UK?
Apart from turning out a few ancient and expensive Cobras they've not done much at all. Here's a few, all of which remain determinedly invisible,- AC 3000 ME - supposedly a mid-engined Lotus Esprit competitor.
- AC Brooklands Ace - 1990s convertible with Ford Mustang mechanicals. Looked like a giant MX5.
- AC 378 Zagato - modern sportscar with Corvette C6 mechanicals. Allegedly on sale since 2012.
GranCab said:
Unless a UK-based business pays all its costs in dollars or euros - including: Raw materials, salaries, wages, rates, rents, heat, light, telephony, auditing etc then the falling exchange rate is good for exporters.
Again, slightly simplistic. Oil is the biggest cost issue - no matter what industry you have oil is bought in dollars and increases everything in the chain. This is why local grown UK food with zero imported items are increasing in price. This puts pressure on inflation which has consequences for salary demands and interest rates. We have already seen inflation push through the 2% so whilst yes, in the immediate to short term an exchange rate swing can have benefits to exports, there are many factors that will neutralise much of any gain. All this is before you even consider the price elasticity of exports - some goods (and I would say zenos would fall into this category) will not see a sudden surge in demand if the price changes. So a 10% reduction in price won't suddenly see 10% more cars sold.
It will be interesting when the sales figures come out for q4 2016 as I suspect bmw/audi/porsche sales to be largely unaffected by brexit when the above comments say it should be a disaster for importers.
ads_green said:
Again, slightly simplistic. Oil is the biggest cost issue - no matter what industry you have oil is bought in dollars and increases everything in the chain. This is why local grown UK food with zero imported items are increasing in price. This puts pressure on inflation which has consequences for salary demands and interest rates. We have already seen inflation push through the 2% so whilst yes, in the immediate to short term an exchange rate swing can have benefits to exports, there are many factors that will neutralise much of any gain.
All this is before you even consider the price elasticity of exports - some goods (and I would say zenos would fall into this category) will not see a sudden surge in demand if the price changes. So a 10% reduction in price won't suddenly see 10% more cars sold.
It will be interesting when the sales figures come out for q4 2016 as I suspect bmw/audi/porsche sales to be largely unaffected by brexit when the above comments say it should be a disaster for importers.
Pardon? The poster's point stands. If you buy X dollars worth of stuff and export it for X, you make no money. If you buy X dollars worth of stuff, spend (some) pounds on making it into something more valuable and then sell it for X plus a bit, then any drop in the exchange rate will either allow you to drop the export price or make more profit from each sale. It really is that simple - doesn't matter whether it's oil or sausage meat. If you add value by spending any local currency _at all_ then you benefit from exchange rates dropping.All this is before you even consider the price elasticity of exports - some goods (and I would say zenos would fall into this category) will not see a sudden surge in demand if the price changes. So a 10% reduction in price won't suddenly see 10% more cars sold.
It will be interesting when the sales figures come out for q4 2016 as I suspect bmw/audi/porsche sales to be largely unaffected by brexit when the above comments say it should be a disaster for importers.
So no, in this case, exchange rates could only have helped. On the other hand, if no-one wants to buy at the old price, or a 'cheaper due to exchange rate' price, then the product is not viable.
Either way, you cannot in any way shape or form blame this on Brexit.
Just want reiterate I wasn't blaming brexit. I'm just say the drop in the pound doesn't magically make all exporters happy to the same degree.
Consider a product like zenos sold for export will often be via an third party sales network. Let's say ABC autos in new York sell zenos cars as a registered dealer. They will but the car pounds so no magic profit there for zenos but sell in dollars - they often will not say 'we can pass on all savings to the customer'... when have you ever seen a dealer like this? No - they will keep the price the same in the local market as demand will be the same and they will pocket easy money.
It's not just cars - look at phones, electricity, gas... when the pound was incredibly strong did prices tumble in the Apple shop? no.
This is even before we get to substitution effects. Let's say somebody had 60k dollars to spend and looking at a zenos... prices fall due to exchange rate and now that 70k lotus is now now 60k... the customer still has and wants to spend 60k but will they take the savings on one car or potentially go for something previously unattainable?
My point is that to say (and I am saying this as somebody who manufactures, assembles and exports stuff) 20% drop in exchange rate means 20% more profit is beyond simplistic. If only economics were that simple then perhaps I would not have had to work so hard during my degree.
Consider a product like zenos sold for export will often be via an third party sales network. Let's say ABC autos in new York sell zenos cars as a registered dealer. They will but the car pounds so no magic profit there for zenos but sell in dollars - they often will not say 'we can pass on all savings to the customer'... when have you ever seen a dealer like this? No - they will keep the price the same in the local market as demand will be the same and they will pocket easy money.
It's not just cars - look at phones, electricity, gas... when the pound was incredibly strong did prices tumble in the Apple shop? no.
This is even before we get to substitution effects. Let's say somebody had 60k dollars to spend and looking at a zenos... prices fall due to exchange rate and now that 70k lotus is now now 60k... the customer still has and wants to spend 60k but will they take the savings on one car or potentially go for something previously unattainable?
My point is that to say (and I am saying this as somebody who manufactures, assembles and exports stuff) 20% drop in exchange rate means 20% more profit is beyond simplistic. If only economics were that simple then perhaps I would not have had to work so hard during my degree.
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