Dollar vs Pound

[Balboa]

Cant help but wonder if this delay in the release of new Base configurator and pricing options is due to the Pound getting crushed against the Dollar. Maybe im optimistically naive but Im thinking us 'Yanks' may catch a break with the strength of the dollar neutralizing the inflation price hike we've all been anticipating (those of us not lucky enuf to grab an FE allocstion) What do you think?

 

[Tonyshepp]

Cant help but wonder if this delay in the release of new Base configurator and pricing options is due to the Pound getting crushed against the Dollar. Maybe im optimistically naive but Im thinking us 'Yanks' may catch a break with the strength of the dollar neutralizing the inflation price hike we've all been anticipating (those of us not lucky enuf to grab an FE allocstion) What do you think?

I think there is probably some truth in that however i doubt they'll reduce the price to the US market as they probably have hedged currency fluctuation some time ago for this year. If the parts are sourced from outside of the UK then they will be more expensive to buy in. I anticipate that it will be pricing next year that may be hit he hardest, i.e. an increase in price to cater for the UK's inflation and weakened pound.

 

[Nova]

I'm not getting price breaks from any of my foreign suppliers. The dollar run-up is more of a pressure relief for them rather than padding already healthy profits. So I am hoping that this will help Lotus keep to the FE pricing on the base, rather than put in an increase. I hope, anyway.

 

[Lotustoronto]

The contracts between Lotus Cars USA and Lotus UK will almost certainly contain some type of FX clause. Going both ways. If the UK pound surged against the US dollar, you would most certainly see a price increase the other way. Nobody knows for sure, but there will be different pricing than was announced earlier. There is an argument to be had both ways for either an increase or a decrease.

An increase in price may see more depositors drop from ordering the Emira as a potential negative, they will also look to stay competitive in price to the Cayman, Corvette and other competitors.

While a decrease in price will almost surely guarantee larger order book in the US market. And garnish a larger market share of the luxury market going forward.

I recently watch a Nick Murray Porsche video (YouTube), which talked about an increase to Porsche allocations to the US market due to China's Porsche sales decreasing rapidly. More than 20% last month alone. Cars that were allocated to that market is being re-allocated to the US market. With all the turmoil across Europe/UK and Asia at the moment, I think Lotus is in a very difficult spot. While increasing price will certainly help their bottom line for profits, it may impact them gaining any market share to introduce the more profitable models. (Eletre and other electric models) Remember the Emira got a 100Mil pound investment - Eletre got 1.8 BILLION pound investment. Big difference.

Emira is a gateway car to the brand just like the 911 is for Porsche. It needs to be a resounding success to get people into the dealers, placing orders and looking at the Eletre and other products that they want to sell en mass. Creating that exclusivity and sought after appeal is a fine balance. If you can get a GT4 for the same price or a base 911 it is going to be difficult to convert that buyer over. Especially if the new car shortage is showing signs of easing.

Rough waters for Lotus to navigate ahead.

 

[TomE]

Tricky times for Lotus. Depends on what was included in supplier contracts (currency, FX changes, inflation etc) and what the implications of supplier delays are on them having to honour prices. Although a lot of components come from Asia (by volume and value) they may be denominated in USD or GBP rather than supplier home currency. Labour and other final assembly costs are UK - that 100m investment gets amortised somewhere.

Then there’s pricing, which may be less directly connected to costs than we think. They pitched the original price announcements close to key competitors’ prices in each country. They’ll have made some assumptions about relative volumes to different regions and may have quite different margins per country.

It’s hard to predict how all that flows through to pricing in each country. But I think it’s unlikely there will be price reductions anywhere. Best we can hope for is maintaining previously announced pricing for a subset of customers. Even that may be too hard for them to achieve.

 

[Lotustoronto]

Tricky times for Lotus. Depends on what was included in supplier contracts (currency, FX changes, inflation etc) and what the implications of supplier delays are on them having to honour prices. Although a lot of components come from Asia (by volume and value) they may be denominated in USD or GBP rather than supplier home currency. Labour and other final assembly costs are UK - that 100m investment gets amortised somewhere.

Then there’s pricing, which may be less directly connected to costs than we think. They pitched the original price announcements close to key competitors’ prices in each country. They’ll have made some assumptions about relative volumes to different regions and may have quite different margins per country.

It’s hard to predict how all that flows through to pricing in each country. But I think it’s unlikely there will be price reductions anywhere. Best we can hope for is maintaining previously announced pricing for a subset of customers. Even that may be too hard for them to achieve.

Agree Tom, I doubt the pricing will remain the same - apart from V6 F/E. I only say reduction due to currency as that maybe a pre written clauses in other countries dealer groups/importer, that is forced on them.

However, since all dealers world wide (except UK) have removed base pricing, we can safely assume that it’s not a currency related move. They will be raising the pricing, and most likely decreasing the sales along with it. Hope it’s not the case tho.

 

[912Matt]

Cant help but wonder if this delay in the release of new Base configurator and pricing options is due to the Pound getting crushed against the Dollar. Maybe im optimistically naive but Im thinking us 'Yanks' may catch a break with the strength of the dollar neutralizing the inflation price hike we've all been anticipating (those of us not lucky enuf to grab an FE allocstion) What do you think?

I found $400 in bedside table at the weekend- I’m Nov build/Dec delivery, so I reckon that will about cover it by then

 

[Tonyshepp]

Asia loves a strong dollar, especially China for its exports. For the UK though, if the US was the biggest market for lotus then happy days but it isn’t, prices will rise, maybe not this year. If Pepsi has gone up by 30% in a supermarket then an Emira is going to be more money soon. Might be a better investment then my pension at the moment..

 

[Smudge]

So the difference in today's dollars is: $82,795 for the FE on the GB website vs. $93,900 on the US website. That is a difference of 12%! Seems like quite a lot...

 

[Tonyshepp]

So the difference in today's dollars is: $82,795 for the FE on the GB website vs. $93,900 on the US website. That is a difference of 12%! Seems like quite a lot...

I wonder how much of that extra money is shipping costs and other costs to doing business in US like approvals?

 

[Magicman]

I found $400 in bedside table at the weekend- I’m Nov build/Dec delivery, so I reckon that will about cover it by then

Hooker a no show? Hate it when that happens 🙄🤣

 

[Magicman]

Asia loves a strong dollar, especially China for its exports. For the UK though, if the US was the biggest market for lotus then happy days but it isn’t, prices will rise, maybe not this year. If Pepsi has gone up by 30% in a supermarket then an Emira is going to be more money soon. Might be a better investment then my pension at the moment..

Think I'd be better off giving my pension pot to Bernie Madoff than Scottish widdows, it's loosing an Emira a month, certainly quicker than Lotus can build them 🤣

 

[Cachaco131]

If we had known the delays we could have put in place a hedging strategy!

 

[Lotustoronto]

Asia loves a strong dollar, especially China for its exports. For the UK though, if the US was the biggest market for lotus then happy days but it isn’t, prices will rise, maybe not this year. If Pepsi has gone up by 30% in a supermarket then an Emira is going to be more money soon. Might be a better investment then my pension at the moment..

Outside of the UK, North America is for sure the largest market.... Especially for the V6 Emira's. I think it will be around 30-40% of the Hethel's planned production in 2023.

 

[idleuser]

I have a feeling Hethel is going to be making a lot more cars for the US since the dollar is so strong against every currency. The pound nearly collasped yesterday and the UK is starting to QE after a 9 month reversal to starve off the collapsing bond market. It'll be interesting on what Lotus does going forward.

 

[Tonyshepp]

I have a feeling Hethel is going to be making a lot more cars for the US since the dollar is so strong against every currency. The pound nearly collasped yesterday and the UK is starting to QE after a 9 month reversal to starve off the collapsing bond market. It'll be interesting on what Lotus does going forward.

Wait and watch Aston Martin go bankrupt in 2 months... ☹️

 

[idleuser]

Wait and watch Aston Martin go bankrupt in 2 months... ☹️

I do not like the sight of that But the economic environment is quickly changing in UK. It's so sad to see everyone's money evaporating over night.

 

[Lotustoronto]

Wait and watch Aston Martin go bankrupt in 2 months... ☹️

Aston Martin is still probably in a better position than Lotus financially speaking. Yes they have 1 billion in debt, but relative to the debt Lotus is sitting at I am sure it is far less. Lotus Technology (electric) division just did a funds raise at a 4.5 Billion evaluation. How much was raised is unknown, but between building factories and expansion spending and no sales I am sure that balance sheet looks mighty red, A lot more red than Aston. They are leaving the "GT" sports car market and shifted towards Super car market. Sponsoring an F1 team. They are going head to head with Ferrari/Mclaren (more so Ferrari) and if any brand in the world has a chance of competing with those two as a more supercar, F1, heritage brand it is them. The new Vanquish will be the make or break. DBX needs better interior tech, but I think looks better than an Eletre.

 

[emiraspain]

So the difference in today's dollars is: $82,795 for the FE on the GB website vs. $93,900 on the US website. That is a difference of 12%! Seems like quite a lot...

Need to then take into account taxes and on the road costs.... will still be a difference of course, maybe bigger as US tends to quote prices before state/purchase tax right? for cars

 

[emiraspain]

Aston Martin is still probably in a better position than Lotus financially speaking. Yes they have 1 billion in debt, but relative to the debt Lotus is sitting at I am sure it is far less. Lotus Technology (electric) division just did a funds raise at a 4.5 Billion evaluation. How much was raised is unknown, but between building factories and expansion spending and no sales I am sure that balance sheet looks mighty red, A lot more red than Aston. They are leaving the "GT" sports car market and shifted towards Super car market. Sponsoring an F1 team. They are going head to head with Ferrari/Mclaren (more so Ferrari) and if any brand in the world has a chance of competing with those two as a more supercar, F1, heritage brand it is them. The new Vanquish will be the make or break. DBX needs better interior tech, but I think looks better than an Eletre.

they said the new vantage was make or break..then it was the DBS... which accounts for more than half their sales.. now the vanish....... quickish.... who knows....

Ive always wanted an AM I have to say, but its just not a car for Spain.......