Economies of scale???

Why with a stronger aussie dollar we are not seeing importers and dealers
passing on the savings to the poor mug punters.

In a world with just-in-time production lines and non-existant stock
warehouses, what could possibly be the reason other than plain importer
greed.

What are the alternatives ? I say lobby the goverment to lift its
restriction and let parallel importers give the "protected dealer raquet" a
run for their money.

vifer

 

call for Conehead, Conehead to the front bar.

 

Lookout, somebody just upset a minor god and has drawn fire and brimstone
down on themselves!

 

Dealers don't buy from the factory. They buy from the

Are those the same contract deals signed "so far in-advance" that when our
dollar takes an overseas hit, importation prices are conveniently adjusted
upward.

I cannot recall the last time I walked into a shop and heard the salesperson
say "We're able to bring you these discounted prices because our dollar is
doing well overseas".
Yet you nearly always hear the opposite.

Imagine if we could only buy IBM computers from IBM, PULP only from BP...At
least we wouldn't be giving our money to the lowlifes.

 

Dealers don't buy from the factory. They buy from the

The importer/distributor would usually set the foreign exchange rates with
the factory each month. Fluctations during the month are absorbed by each
side depending on which way it goes, and most businesses use rate changes to
expand their margins which is no doubt what is happening now.

 

Theres just a little bit more to this than may first appear. An increase
in the value of the AUD relative to other currencies does not
necessarily facilitate a drop in prices for goods imported.

Well you just answered your own question. Just in time production lines
imply the constituent parts are arriving in the factory just in time,
hence warehousing costs are reduced, meaning a reduction in the overall
cost of the item. Just in time extends right down through the supply
chain, particularly for Japanese companies. That means that the parts
are produced in time to arrive at the factory when they are needed.

This means that raw materials need to be procured, again, just in time
in order to make the part. The part is then made with a cost that is a
reflection of the market price of the raw materials. As the Aussie
dollar appreciates against the US dollar this means the price the
'importers' of raw materials (ie the motorcycle parts production plants)
pay also increases. This cost is passed up the chain.

One way to avoid these price fluctuations is to set a price that is
profitable in the worst possible conditions and weather the good and bad
times. Now the AUD has been pretty fucked for the last little while and
theres a lot to catch up on. Expectation is that the US economy will
pick up again,thus the USD will then strengthen and thus the AUD will
drop again. So it may just be a case of make hay while the sun shines.

If the current price of the AUD remains in place you will see a gradual
reduction in prices. You see its very easy to take the price down, but
very difficult to raise it again. Customers tend to get very shitty.

But sometimes theres just no pleasing people. They want to keep the cake
and eat it as well. I believe a very smug french swearing computer
program summed it up very nicely.... cause and effect

And for what its worth viffer, JIT is a lot more complex than just not
having warehouses anymore.

 

1) AUD is relatively stable against the UK Pound, Yen and Euro. Only signif increase against the USD.

Importers may trade in USD or other currencies, hedged or not, irrespective of country of origin. eg an Italian manufacturer may
only supply against USD instead of EURO.

2) Those same manufacturers may still have to purchase inputs in USD that may have been adversely affected by their currency
changes. Their real costs may have increased.

2) When the AUD dropped to near 50c against the USD did you see massive price increases?

No.

3) Importers generally hedge against currency fluctuation, partly to provide some protection to forward cash flow forecasting.

4) Importers a bit canny about significant price changes as it has a knockon effect on the used bike market and also current unsold
new bikes in the channel, "bought" at the higher price. Also affected is resale value , trade-in values and price relativity within
the model ranges.

5) Price points will be maintained by add-ons eg different exhaust, "free" riding gear etc. But currency fluctuations may not carry
through for months or even years, to maintain stability in the market.

If you have limited bikes to sell, there's no point making them cheaper if you won't sell any more.

Some or all of the above may apply.

 

You are right on to it BVR.
Forgive me for butting in to your interesting thread.
All this has happened in NZ with discounting literally
taking over in most brands of consumer items, including
motorcycles, and here parallel importing is legal.
Customers are VERY shitty over here.

New motorcycles are so much cheaper, that trade in
values have reduced to a level less than half the new
price on many models, when the trade in bike may only
have a few hundred k's on the meter. It's good for buyers
of used bikes, but sales of new and used have dropped
so far that even more discounting is done, in order to
sell used bikes. You guys need to look at our market for
your next bike. They have never been cheaper here.

Frank.

 

X-No-archive: yes
Uncle Bully wrote;

~
Oh yeah? Well fluck you bruddy ostlarians too!!
Crem

 

Simple, vote with your money and buy overseas then. Remember that any order
over $250 AUS, or where duty and GST exceeds $50 will then get charged the
electronic entry fee (depends on who does the importing, can be higher than
$50 AUS) plus the GST and Duty on your product. So ... either buy in small
lots less than $250AUS or buy up big and make it worth your while.

Cam
'03 954

 

I'm going to go right out on a limb here and suggest that you're a PAYE worker
who in years when your employer makes a profit you expect and receive a
payrise and when your employer has a poor year and makes less profit than the
previous year, or makes a loss, you accept a pay cut to reflect the fortunes
of the business... just like all the other PAYE employees do.

Nev..
'03 ZX12R
'02 CBR1100XX

 

Thank you very much.

How am I going to explain the giggles and snorts when I finally got it.

Moike

 

First you should find out what the differences are between "Economies of
scale" and "fluctuating exchange rates" and then choose a suitable subject
line.... and I'm still trying to work out how JIT production would have any
effect on the price of goods (presuming most japanese motorcycle components
are fabricated in Japan) with regard to fluctuating exchange rates, unless
they're being delivered to Australia individually - as they roll off the
assembly line, rather than in batches say once every month or two.

Nev..
'03 ZX12R
'02 CBR1100XX

 

Perhaps "JIT" of sorts, so not bought in one hit for a year, but every month
or so. Still enough to see some reduction in the buy price IFF it's bought
against the US dollar. However, if it's a Japanese component even if it is
against the US dollar, the price in Yen will go up to compensate, making it
more expensive in USD anyway. It all goes around and around. Needless to
say, yes, we are paying a tad too much for moto bits over here. It's a
little beyond a joke.

Cam
'03 954

 

Hey vifer, theres your chance mate - get around the importers by buying
all the constituent parts for your next bike in $250 US lots... might
take a while but Im sure you can beat the importers price

lol

 

To get a better feel of whats going on picture this in your mind:

Your in the honda factory and theres two or three assembly lines running
down the length of it... you look up the assembly line and you see a
number of different types of chassis and as you look further down you
will see a number of different bikes being produced, ie the various
models in the honda range.

Whats on the production line represents the expected future demand based
on what has recently sold in REAL time.. ie fong wong buys a VTR -
within 2 hours the honda factory knows about it and considers producing
another one.

The shipment of such goods is dependant on the quantity and the market
its going to and of course, whether any are being produced.

 

The Japanese factories have outsorced the production of some of their
simpler models to SE Asia (eg. Kawasaki KLR650's are now built in Malaysia)
and South Korea (eg. most Suzuki engines).

Again, it comes down to how the contracts are negotiated. If the Japanese
have gone in during the region's economic slump, they could've dictated
their terms, meaning that those South Korean founries have been supplying
Suzuki with rock-bottom cheap engines all along, and the biggest single
contributor to the final price are the highly-paid Japanese factory workers
who assemble the bikes out of the dirt-cheap components.

 

Perhaps true, but, remember, here in Oz (as in most parts of the world),
the price charged to a buyer has little or no connection to the coast of
making and shipping an item, but much more to do with what the market
will bear....

Strong dollar, weak dollar, cheap labour etc. only changes the
profitability of an item.

regards,
Crazycam

 

The radical Gordian-knot-style solution is to hack the thing to pieces.[1]

Make your own Gordian knot![2]

Gary

[1] http://www.livius.org/aj-al/alexander/alexander_t06.html
[2] http://www.maa.org/devlin/devlin_9_01.html

 

IIRC your question was based on the relevance of JIT? All I was doing
is showing that production runs are a thing of the past. Its all about
forecasted demand since they can pretty well put any type of bike
together rather quickly these days.

I agree with your assertion though, thats why they have a pricing
department dedicated to determining the price the market will bear.