PRICE INCREASE...AGAIN

[FIRME]

I was waiting to see if someone would post about it but, apparently, no one has so I will.

The following changes will take effect January 1,2007

Base Vehicle
MY 07 ELISE $46,270

Base Vehicle
MY 07 Exige S $59,890

The options and price for the options will remain the same but, this is something that has been mandated by Group Lotus plc because of the weakness of the U.S. dollar against the British pound sterling and reflects the continued pressure imposed upon the North American business operations due to the deteriorating currency situation.

Price Protection
If your vehicle has a VIN and not a mock VIN that starts with an X, you will be protected from the price increase. Talk to your dealer if you have any questions.

2007 models will be EXTREMELY limited in production and who knows?...maybe this will increase value for the '05-'06 models?

[kyohan03]

Originally Posted by FIRME

I was waiting to see if someone would post about it but, apparently, no one has so I will.

The following changes will take effect January 1,2007

Base Vehicle
MY 07 ELISE $46,270

Base Vehicle
MY 07 Exige S $59,890

The options and price for the options will remain the same but, this is something that has been mandated by Group Lotus plc because of the weakness of the U.S. dollar against the British pound sterling and reflects the continued pressure imposed upon the North American business operations due to the deteriorating currency situation.

Price Protection
If your vehicle has a VIN and not a mock VIN that starts with an X, you will be protected from the price increase. Talk to your dealer if you have any questions.

2007 models will be EXTREMELY limited in production and who knows?...maybe this will increase value for the '05-'06 models?

To the extent that the base Elise is not a $46K plus car, value-wise and a base Exige is not a nearly $60K value, you may be right.

I understand the economics involved, but this kind of pricing will pretty much stick a fork in the Elise/Exige product line in the US.

[RegGuy]

Originally Posted by kyohan03

To the extent that the base Elise is not a $46K plus car, value-wise and a base Exige is not a nearly $60K value, you may be right.

I understand the economics involved, but this kind of pricing will pretty much stick a fork in the Elise/Exige product line in the US.

Well the same thing will happen to all imports in 2007 and going forward for the foreseeable future. Our dollar is as weak as it's been in many years. If companies want to pretend like the dollar isn't losing ground to all other major currencies, they can lose profit and keep a steady cost. However I don't think that is likely to occur for long.

[kyohan03]

Originally Posted by RegGuy

Well the same thing will happen to all imports in 2007 and going forward for the foreseeable future. Our dollar is as weak as it's been in many years. If companies want to pretend like the dollar isn't losing ground to all other major currencies, they can lose profit and keep a steady cost. However I don't think that is likely to occur for long.

Yes, but the Elise/Exige is already in a hole in terms of being seen as a value in the sports car market. You can't judge it's relative value by the comparatively few owners who post on this board who are enthusiastic for their cars.

The fact is the value of these cars plummeted from the start, even with limited production.

Dealers not only have a few leftover or low mileage tradein 05's, many 06's but there are leftover Exiges and several dealers have Exige S's on their lots looking for buyers.

Again, the economics of currency valuation may dictate a price increase for the cars, but the market has already determined that at its current pricing the demand is pretty well satisfied. Upping the price like this will, I believe, essentially bring the Elise/Exige line to a halt in this country.

Not sure, but it seems like you are staking both sides of the issue when you say the dollar will be at a disadvantage for the forseeable future, then say it won't occur for long.

[Allan Gibbs]

Well, then Lotus better make those really limited production numbers. Back to the days of the Espirit.

[MitchT]

Just like all cars, they go down in value, what production car goes up, a tt 996 sold new for 125-130k and now they are 70k used in perfect condition, 4 years old, vettes , maybe ferraris 430, 360, but the maintence and they still go down. This has been discussed before, by the way what other manufacture brings a car into the US of A with a Harness Bar?, Adjustable suspension?, can drive on the track all day pulling a g stock and not break down or eat brakes or over heat?, The car is better than they promised us and you still bitch. Go buy a new camaro when it comes out.

[008]

Average monthly currency charts for Pound to dollar for 04 and 06 respectively:

2004
Average Rates
January
1.82546 USD (20 days average)
February
1.86729 USD (19 days average)
March
1.8261 USD (23 days average)
April
1.8031 USD (22 days average)
May
1.78751 USD (19 days average)
June
1.82791 USD (22 days average)
July
1.8438 USD (21 days average)
August
1.82025 USD (22 days average)
September
1.79367 USD (21 days average)
October
1.80818 USD (20 days average)
November
1.86077 USD (19 days average)
December
1.92864 USD (23 days average)

2006


Average Rates
January
1.76541 USD (21 days average)
February
1.74786 USD (19 days average)
March
1.74419 USD (23 days average)
April
1.76804 USD (20 days average)
May
1.86819 USD (23 days average)
June
1.84354 USD (22 days average)
July
1.84435 USD (20 days average)
August
1.89407 USD (23 days average)
September
1.88489 USD (21 days average)
October
1.87626 USD (22 days average)
November
1.91261 USD (22 days average)
December
1.9644 USD (15 days average)



In any manufacturing, once you reach critical mass, it's better to produce less for more money than to produce more for less. I just hope they can sell them.

[dsolomon]

I think you've got a problem with your math. Using your Oct 04 exchange rate, the car @40k USD would cost 22,121 pounds. Using the Dec 06 exchange rate you list, that same 22,121 pounds would be worth $43.4k USD. If MSRP is 46k US, that only adds 1300 pounds to the retail price at the current rate compared to two years ago - so this 15% increase we've seen is only a 5% change across the pond.

[Bane]

Don't you mean 22,121.69 pounds for October 04 and 23,554.27 pounds for December 06? I think they are charging more then that across the pond... so we do still get a discount when it comes into the USA...

[JnC]

Originally Posted by dsolomon

I think you've got a problem with your math.

Agreed. FWIW from the above figures...
2004 average rate: 1.833
2006 average rate: 1.843

The exchange rate argument, at least for those two years doesn't hold up.

Overall, the fundamental problem is that the Elise continues to move away from that $40k sweet spot in the market. It was originally designed to be an affordable car.

I think the price increase is largely due to:

• anticipated smaller volume of sales (after the early adopter spike, orders have cooled off)

• costs associated with federal compliance

• to some degree all of the different product that shares the same line at Hethel

• higher material costs associated with aluminum

To illustrate the latter, here is a graph of aluminum alloy prices on the London metal exchange market from 2004 to present:

[MitchT]

Let's not forget that they might be smart enough to have some currency hedge contracts in place, assuming these guys do business internationally, and they are smart.

[JnC]

Originally Posted by MitchT

Let's not forget that they might be smart enough to have some currency hedge contracts in place

But the currency argument doesn't hold up, at least for the 2004 vs 2006 averages. Only a 0.01 pound difference.

[Randy Chase]

Pounds were recently at over $2 each and now have dropped back to $1.96. It was not that high in 2004. Something about the average rates quoted does not seem right. I was buying UK products for import and had to pay the rates. Or maybe my timing just sucked.

We were all discussing hedge contracts back in early 2004 when the first price increase happened to the $37,500 MSRP.

[LARRY]

Still thousands less than Porsche/Ferrari/Lambourghini/other sports cars...

Still the best sports car on the planet.

[Andrikos]

Bad for the Dealers
Bad for used car buyers
Bad for new car buyers
Good for OWNERS

[Randy Chase]

And maybe bad for Lotus and Lotus US. I would rather have Lotus viable in the longer run. Here in the US and also in the UK.

[LARRY]

Inflation.

Prices go up.

So what's new?

[Cardinal]

A ~8% increase per year for two years is steep regardless of how you slice it. I hope this doesn't drive fence-sitters away. It could be bad news for Lotus USA.

The good thing here as I see it, is that the Elise (as well as Lotus in general) is an enthusiast's playground. People who want an Elise will pay what it costs, people who DON'T want an Elise wouldn't pay $20k anyway, so who cares? This may be the case. I just hope I can get a good price on one when the time is right.

[AgentTripleX]

I don't know. I think a price increase can attract new different buyers. Some people want other people to know their car is expensive and if it really is expensive it motivates to buy them. This doesn't sound like your typical current Elise owner, but I know a lot of people that think that way. And even with a price increase you still get a lot of bang for your buck.

[LARRY]

Oh yeah...