[BrianK]

... dawning my flame suit ...

So, back in late '02, when things were finally coming together that the Elise was actually going to make its way over here, a Great British Pound was worth about $1.50. Today it's worth $1.80. In Elise terms, that means that in late '02, the Elise would net Lotus £25666, today (before the current price increase) that number drops to £22213 - a difference of £3452 - substantial.

With such a weak dollar, a price increase over what was figured 2 years ago seems to be at a bit more acceptable... Lotus still isn't netting what they expected when they priced the car at $38.5K. Deposits, enthusiasts, waiting lists aside, from a business point of view, this may have been necessary so as not to loose money with each sale

Better to have a price increase and continued developement than a bunch of happy customers and near bankrupt company.

... discuss ...

I'm not trying to defend Lotus necessarily, just putting out another point of view. I put my deposit down in Feb '03 just like lots of you & feel a bit jipped, but I don't think Lotus is being greedy or blindly raising costs for the bottom line - it may be a neccessity

 

[zvezdah1]

Brian,
I think that's a very valid point. Some have suggested that Lotus/Proton should be hedging by currency investing, just don't think they have the capital to do that, Proton's put a pile of money into the US elise here as it is. The margins on the car are razor thin Im guessing.
Chris

 

[agent.5]

I think you have a point. But if the UK pound go to $2.25 or even $2.50, then what?

I am betting that the US Dollar will continue to devalue because of ongoing budget and accumulated deficit and reckless federal and state and military spendings.

 

[BrianK]

Some have suggested that Lotus/Proton should be hedging by currency investing, just don't think they have the capital to do that

.. ahh yes... proof that I don't know near enough about money to run an international company.

 

[Stan]

Lotus has to survive. That is in all of our best interest. They need to make it through a huge period of change and higher sales and production volume. They are also working on and planning to introduce 1-2 more higher end cars and that will help the bottom line as well.

I mean we are looking at an unusual and pure design. Handbuilt and hand painted by a company with a long hard core car and racing heritage. Senna used to drive for them. Clark too. They used to cream Ferrari and other in F1.

And the Elise is so cheap in the US compared to other countries they could buy them here and resell them at home and make even more money than the speculators.

I think Lotus should do whatever is necessary to succeed. A lot of this stuff depends on your attitude towards such a car. My Elise is delivering exactly what they said it would and what the magazines say about it. It's a great car and unique in the market. Sport Compact car calls it "The Most Undiluted Car Sold In America". If you understand what that means you might decide that that is not what you want. But many want that sort of thing.

 

[ivan1]

not to be looking out for myself but...

if my car is sitting in port because Lotus is having trouble getting transportation to the dealers and that causes me to be affected by the increase - is that fair????

amazing that the price can change up until the point of invoicing. But try to change an option or color you ordered, even WEEKS or MONTHS before your car will even be built?

 

[Randy Chase]

I think you have a point. But if the UK pound go to $2.25 or even $2.50, then what?

This is exactly what happened to the yen/dollar in the early 90s. MR2s that were $16k MSRP eventually were over $30k in 5 years and sales fell so far off that they dropped the car in the USA. Note that important point. They did not quit making them... they just quit selling them to the USA where they could not make enough money off the cars... and the main reason was the $/Yen.

That killed off the Supra and the MR2 and some other cars.

 

[xxxotic]

Most car dealers sell cars at under MSRP and still make a profit.

When I went in to ask about the car before they even knew what engine it would have in it or what ioptions would be available , I TOLD THEM WHEN I GAVE THEM THE DEPOSIT that I would pay MSRP, and they acted surprised since most people like to haggle.

I dont know the supply content of teh car by country, but I'm sure that a certaint percentage of teh car is made from parts from ohter counties- the clamshells are from France, the steering wheel and security system from Italy, the engine from Japan.

Did the currencies in these countires go down too? Is Lotus paying more for parts, or are they getting them at a lower price since the pound may be higher against currencies in the countries they are obtaining supplies from?

OK, I'm not quite as pissed now, i just realized that we are getting an alarm system that is better than the standard European one, oil coolers and the stupid airbags that are required. These alone is would cost over $1000.


Edited to show that I'm pissed again-

I forgot that leather and foglites were originally deleted from the car as a way to keep the price down.

 

[Patricko]

[BBetter to have a price increase and continued developement than a bunch of happy customers and near bankrupt company.[/B]

I was thinking the same thing.

If they kept the price at $38,500 and were out of business we would all be complaining that we can't get warranty service and we can't get parts and the value of our cars would plummet.

Any thoughts...

 

[agent.5]

I dont know the supply content of teh car by country, but I'm sure that a certaint percentage of teh car is made from parts from ohter counties- the clamshells are from France, the steering wheel and security system from Italy, the engine from Japan.

Did the currencies in these countires go down too? Is Lotus paying more for parts, or are they getting them at a lower price since the pound may be higher against currencies in the countries they are obtaining supplies from?

All these currencies track the Euro, which generally run in a contra position to the dollar. The UK pound tracks the Euro too.

 

[LarryB]

Randy you could add the 300zx and Rx7 to the list. As someone who picked up a MR2 in early '91 and watched the market closely understand what can happen.

In the case of Lotus they've got one car to sell for the next year or two. Don't think they could afford to wait and hope the exchange rate got better. As consumers no one wants to pay more and a increase isn't going to sit well with many. At a $1k bump think Lotus held it to a reasonable level.

 

[Stan]

>>>if my car is sitting in port because Lotus is having trouble getting transportation to the dealers and that causes me to be affected by the increase - is that fair???? <<<

Well we don't have official information yet...but I think someone wrote that it would affect cars INVOICED after 9-1. Does this mean invoicing the dealer as a truck is on the way to them with a car built some time ago...or when the dealer is invoiced and asks each customer to specify color, options, and to increase the deposit amount and so forth before the car is actually built?

 

[Racer X]

France tracks to the Euro. I do not believe the UK pound does. Japanese Yen does not. However, the US dollar has been week against most currencies in the last year.

The Pound was at ~1.57 at Sept 1, 2003 ~1.78 Jan1, 2004 and ~1.80 today.

The Euro was $1.08; ~$1.25; ~$1.20 for the same time periods.

The Yen was ~$0.0085;~$0.0093; ~$0.00917 for the same periods.

The Can$ was ~$0.715; ~$0.77; ~$0.762

They move similarly but not the same. I threw in Canada as another reference point.

Greg

 

[BrianK]

The Pound was at ~1.57 at Sept 1, 2003 ~1.78 Jan1, 2004 and ~1.80 today.

just as an FYI (for everyone) and to add to this point, the dollar is at an 11 year low compared to the GBP. It was pretty stable around $1.55 or so for two years prior to Lotus' initial price point, then shot up shortly thereafter.

 

[TimMullen]

Does this mean invoicing the dealer as a truck is on the way to them with a car built some time ago...or when the dealer is invoiced and asks each customer to specify color, options, and to increase the deposit amount and so forth before the car is actually built?

I believe that the dealer is invoiced when the car is loaded on the transport truck.

As for increasing the deposit amount, in my case, the car was built shipped and in the distribution center before they asked for an increase in the deposit. A couple of days later, the car was delivered. I suspect it all depends on how your dealer is doing the business. Lotus doesn't really deal with the money at all until they invoice the dealer (when it's loaded on the truck).

 

[Miguel]

France tracks to the Euro. I do not believe the UK pound does.
Greg

UK pound is fixed to the Euro, fixed exchange rate for all 25 EU countries.

They just decided to keep the pound but the exchange is fixed vs the Euro.

 

[tidalwdave]

Whatever. I put my deposit down a year ago when the car was going to cost 38,500 and come with power windows and get 40+ mpg (remember those claims?).

Since then, the car has gone up to 39,989, if you don't want red or yellow, you pay extra. If you want the power windows, it's in an option that costs 1,200.

Now, with sales tax, this increase has added another 1k on the car. A car I've been on a wait list for, have my order in, and car is suppose to start being built in the next two weeks.

Oh, and on top of all these increases, these cars were suppose to have been here months ago!

I'm very disenchanted with Lotus and this whole ordeal. I was actually seeing the light at the end of the tunnel before this.

I've already been though price increases and delays with this car. I lost a job and took a pay cut at a new job. I can't afford the car at this point, and I'm actually not even sad about it to tell you the truth.

 

[roadrunner]

Hmm...

UK pound is fixed to the Euro, fixed exchange rate for all 25 EU countries.

They just decided to keep the pound but the exchange is fixed vs the Euro.

I beg to differ:

http://www.oanda.com/convert/fxhistory

 

[Miguel]

Re: Hmm...

I beg to differ:

http://www.oanda.com/convert/fxhistory

You are right, they left the ERM in 2000, didn't know they left.

 

[ConeFusion]

Better to have a price increase and continued developement than a bunch of happy customers and near bankrupt company.

We're looking at a difference in revenue of about $2M (2000 cars * $1000). If that is the difference between being healthy and going bankrupt for a medium sized company, something seems seriously broken. Even if they might not have lots of money in the bank, they must have lines of credit to help them over short term revenue fluctuations.

Yes, I absolutely believe that happy customers are more important than a $2M difference in their bank account. Lotus is essentially trying to enter the largest car market in the world (most people don't know that the Esprit even existed). They say that the Elise is supposed to be the start for selling more models and many more cars later. Considering that, I think it's a very bad decision to piss off their first and most enthusiastic customers. The people who put down deposits years before the car arrives. The people who spend way too much time on message boards eagerly anticipating the arrival of the car. The people who are considered car freaks and experts by all their friends and relatives, who everybody asks for advice on buying cars. They couldn't buy better promotion than they will get from making us happy.

It's a bad move, no matter how you slice it.