Euro-Dollar parity soon? = cheaper M9?

[blimey]

Wishful thinking but unlikely the case.

 

[noimmunity]

It's certainly worth watching exchange rates for a deal.

I got a new M8 for the price of a used one that way last year when the pound hit a low.

 

[elude]

If there's another crisis, it will be the least of your concern. 🙂

 

[Roger Hicks]

Lowering the price is unlikely but there might be some kind of rebate program after a few weeks if the euro stays weak. It'll take a while for the paid-for cameras in the pipeline to sell out first. Of course with demand for the M9 so high they may feel there's no sense in cutting prices as it wouldn't sell more cameras (they can't make them fast enough).

Cheers,

R.

 

[eleskin]

Supply and demand Capitalism rules

Supply and demand Capitalism rules

If I remember my history correctly, a really sucessful company is one that produces more due to demand and sells cheaper than the competition. With Leica, due to demand, why not increase production and hire more people to do it while at the same time bring the price down to the original M8. With this people will say why should I pay 7k for a Nikon or Canon when I could have a Leica and use the savings for a Leica lens? Here, they would also sell more lenses too. A win win for them.

 

[Spyro]

Ιf I was a dealer in the US right now and I was free to set my prices I'd put the M9 price higher and beg for more stock. But I think Leica AG sets retail prices centrally?

 

[Leigh Youdale]

Are there any Leica outlets in Greece? Might be some bargains?

 

[Leigh Youdale]

If I remember my history correctly, a really sucessful company is one that produces more due to demand and sells cheaper than the competition. With Leica, due to demand, why not increase production and hire more people to do it while at the same time bring the price down to the original M8. With this people will say why should I pay 7k for a Nikon or Canon when I could have a Leica and use the savings for a Leica lens? Here, they would also sell more lenses too. A win win for them.

And if I remember my business career correctly there was this thing called profitless volume. In the face of ever rising demand, 24/7 production, falling prices but increased market share there was a persistent red line on the graph.
We took the decision to break ranks with the competition by raising prices to the point where output volume shrank back to a five day week basis. All the low price marginal business we'd gained and which came with credit and payment problems deserted us and went to our competitors who then had the problem. It took about a month of the business cycle to get us into the black and while our competitors continued to claw at each other and to discount their prices still further, we had never made so much money!

If Leica can sell all they want to sell and all they can make at the prices they charge and make a satisfactory profit on their investment, why would they want to change anything in the mix?

 

[newspaperguy]

Well said from down under!

Thank you Leigh.

 

[yanidel]

Consumer good companies usually don't change their pricing because of currency fluctuations. And remember that Leica buys quite a few components in non-Euro currencies so while the Euro revenues might go up, so will their cost of production.

 

[Roger Hicks]

If Leica can sell all they want to sell and all they can make at the prices they charge and make a satisfactory profit on their investment, why would they want to change anything in the mix?

Dear Leigh,

Not so much 'all they want' as 'all they can make'. It takes quite a long time to train people to make rangefinder cameras: you can't just go down the the labour exchange and ask for a dozen skilled Leica assemblers, please.

Cheers,

R.

 

[Spyro]

And remember that Leica buys quite a few components in non-Euro

Ι thought most parts are made in Portugal which is a Euro country?

 

[Roger Hicks]

Ι thought most parts are made in Portugal which is a Euro country?

Not the shutter (Japan, I think) or sensor (USA).

Cheers,

R.

 

[Spyro]

True that, thanks Roger.

 

[semordnilap]

It's certainly worth watching exchange rates for a deal.

I got a new M8 for the price of a used one that way last year when the pound hit a low.

Yep... that's how I got my 28 cron. Maybe there'll be lens rebates, too, as things move along.

Anyway, remember that over the past few years there've been nothing but leica price increases in the US–so some stability for a year or two would be a change!

 

[Ben Z]

I don't actually recall ever reading an official press release from Leica stating that a price increase was based on currency valuation, but I might have missed it. I have read hundreds of such statements on forums coming from helpful fans of the brand.

Prices on many Leica lenses (speaking of those in production for years, not the new releases) have more than doubled since the early 2000's. Did the euro ever reach $2? If it did, did it stay there long?

Personally I think Leica sets their prices based on a firm conviction that their loyal customer base will pay whatever they ask, and so far it looks like it's working. I seriously doubt we will see any drop in Leica prices as a result of parity between the dollar and euro even if it happens. If the prices come down it will be because sales have fallen, and the reductions will probably come from the dealers', and perhaps the country distributors' bottom line, not Leica itself. IMHO of course.

 

[user237428934]

Prices on many Leica lenses (speaking of those in production for years, not the new releases) have more than doubled since the early 2000's. Did the euro ever reach $2? If it did, did it stay there long?

Prices here in Germany went up too in that period. Many things are more expensive now than back in 2000. Not a specific Leica problem

 

[Roger Hicks]

Ten years' inflation @3% means that prices go up by a factor of about 1.34. Then go from $0.90/€ to $1.45/€, and you have a factor of 1.61. Multiply 1.61 by 1.34 and you get 2.16x.

Of course it's easier to blame wicked greedy Leica and their mindless fans than to do the sums.

Cheers,

R.

 

[Ben Z]

Prices here in Germany went up too in that period. Many things are more expensive now than back in 2000. Not a specific Leica problem

True, but has nothing to do with the question of Leica prices related to euro:dollar. Here in the US the sticker price of a brand-new 9th-generation German-made Mercedes E-350 is within $1000 of what it was in late 2002 when the 8th-generation came out. A Swiss-made Omega Seamaster Pro Co-axial costs about 10% more today than when I bought one in 2001 with a plain ETA movement. Some things have gone up a little, but mostly things that people can't do without. The consumer's response to price increases on luxury goods here in the US has been to not buy them, and that leaves the manufacturer with the choice between holding prices or pulling out of the market (or outsourcing to China 😀) Nothing I can think of has gone up 100% as Leica lenses have. I still maintain, it's a function of customers being willing to pay whatever is asked, and if they need some kind of rational explanation beyond that, are free to make one up that suits them. I wish I had a clientele like that, that's all I can say.

 

[Roger Hicks]

True, but has nothing to do with the question of Leica prices related to euro:dollar. Here in the US the sticker price of a brand-new 9th-generation German-made Mercedes E-350 is within $1000 of what it was in late 2002 when the 8th-generation came out. A Swiss-made Omega Seamaster Pro Co-axial costs about 10% more today than when I bought one in 2001 with a plain ETA movement. Some things have gone up a little, but mostly things that people can't do without. The consumer's response to price increases on luxury goods here in the US has been to not buy them, and that leaves the manufacturer with the choice between holding prices or pulling out of the market (or outsourcing to China 😀) Nothing I can think of has gone up 100% as Leica lenses have. I still maintain, it's a function of customers being willing to pay whatever is asked, and if they need some kind of rational explanation beyond that, are free to make one up that suits them. I wish I had a clientele like that, that's all I can say.

And those who don't want rational explanations are free to fantasize about wicked, greedy Leica, etc. I prefer rationality. Otherwise, why wouldn't Leica charge $10,000 for an M9 or a 21 or 24 Summilux? Or $100,000?

ADDENDUM: Also, there are plenty of alternatives to Mercedes and Omega. There are rather fewer to Leica. Especially in full-frame digital rangefinders.

SECOND ADDENDUM: My (brand new) Seamaster 30 was $28 in the Bermuda PX in 1968.

Cheers,

R.