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OK... so we've been reading about Lotus is making a very thin margin on these cars and the accessories. For what we're getting... I believe it. Labor is hiedously expensive and when you're dealing with a hand-built exotic.... you get the idea.

So... the thought I have (and have been trying to supress) is:

Once the car is launched, how soon do you raise the MSRP?

As a business person, I know that penetration pricing is good for capturing a slice of the market. I really don't think the Elise really needs penetration pricing since there's such demand for it currently. But at some point, the sale of the cars needs to be profitable. In light of the post stating that Lotus is adding a 3rd shift which thereby increases their salary expenses) I would expect that Lotus would want to increase the price to offset costs and show the parent company (Proton) that they're profitable.

What does everyone think? Am I way off-base here?

Bob
 

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Adding a third shift makes a plant more profitable, efficient and increases production - if anything prices should go down by a buck and a half.
 

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There is almost NO WAY that the price will not increase. The questions are when, and by how much.

Based purely on personal speculation as to when... I might guess as of 1-1-2005. And that bumps MSRP and those who get a car after 1-1-2005 would have to pay more because the dealer will be paying more and Lotus USA will be paying more to Lotus UK.

As to how much? I would not be surprised to see a $2500 bump.
 

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Randy Chase said:
There is almost NO WAY that the price will not increase. The questions are when, and by how much.

Based purely on personal speculation as to when... I might guess as of 1-1-2005. And that bumps MSRP and those who get a car after 1-1-2005 would have to pay more because the dealer will be paying more and Lotus USA will be paying more to Lotus UK.

As to how much? I would not be surprised to see a $2500 bump.
Let's say that your order has already been placed (in the first 30 at your dealer) and the price does go up on 1-1-5 and you haven't taken delivery eventhough the order has been placed.

Would your car be subject to the higher MSRP or grandfathered in at the old price?
 

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I think we'll see a price increase. I just hope that it won't be $2500 by 2005.......I haven't yet put my order in:(
 

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Adding extra shifts and production doesn't always improve margins and efficiency.

Getting parts from the suppliers may cost more for shorter lead times. Better (hard) tooling might be required to manufacture more plastics, for example. If that hard tooling has a huge up-front cost, then it might not be cost-effective given the lifetime of the line.

Adding a third shift can add overhead burden that would not have otherwise been required -- more HR, more lunch tables, new employee parking lot. :)

You get the idea. It's just not always a given that adding a third shift reduces costs.

Lotus is also especially sensitive to the down-side of demand surges -- I was glad to see they forecasted a short 12-month contract since it always sucks to bring in new people only to cut them later when demand goes slack.
 

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But the problem is that many orders were placed before the official Lotus launch in January. So, if you arbitrarily set a date say 1/1/05 to raise price. How come some people that placed the order prior to launch get a lower price and some get a higher price?
 

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Johnny B said:
Let's say that your order has already been placed (in the first 30 at your dealer) and the price does go up on 1-1-5 and you haven't taken delivery eventhough the order has been placed.

Would your car be subject to the higher MSRP or grandfathered in at the old price?
I THINK.....the price the dealer pays is what the price is when the car is delivered. Not when the order is taken. No money changes hands until the car is delivered as far as dealer and Lotus USA.

That being the case, it would be my speculation that orders taken would not be part of the equation. Lotus would notify dealers that cars delivered after some point in time, would now be MSRP this new amount. I think.

TOTALLY SPECULATION on my part!
 

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agent.5 said:
But the problem is that many orders were placed before the official Lotus launch in January. So, if you arbitrarily set a date say 1/1/05 to raise price. How come some people that placed the order prior to launch get a lower price and some get a higher price?
Because for most if not all people, they placed an order to buy a future car at MSRP. It will be.

If someone has paperwork from a dealer stating a specific price, then they may be able to attempt to hold the dealer to that.

Almost all cars increment a little bit every year. That is part of the MSRP.
 

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Randy Chase said:
There is almost NO WAY that the price will not increase. The questions are when, and by how much.

Based purely on personal speculation as to when... I might guess as of 1-1-2005. And that bumps MSRP and those who get a car after 1-1-2005 would have to pay more because the dealer will be paying more and Lotus USA will be paying more to Lotus UK.

As to how much? I would not be surprised to see a $2500 bump.

Randy, for some reason, I dont consider whatever you say as "speculation" Mr inside scoop....:). Man, I hope you are wrong about that price hike cause 2500.00 seems abit excessive. Most co's raise price by 500.00 or so.
 

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I've had an order in for months now, and I'd say that at #21 I have about a 30% chance of getting a car before 1/1/05. This is based on a known build date of 9/04 for #13 at my dealer. I'd be _very_ upset if lotus upped the MSRP before all of the current orders have been filled. :mad: So take note lotus: go build some more cars before you raise the price. After you build mine tho, feel free. ;)
 

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mact3333 said:
Randy, for some reason, I dont consider whatever you say as "speculation" Mr inside scoop....:). Man, I hope you are wrong about that price hike cause 2500.00 seems abit excessive. Most co's raise price by 500.00 or so.
Not everything I have said is speculation, but I have tried very carefully to make sure anything that is speculation, is noted as such. :)
 

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Randy Chase said:
Because for most if not all people, they placed an order to buy a future car at MSRP. It will be.

If someone has paperwork from a dealer stating a specific price, then they may be able to attempt to hold the dealer to that.

Almost all cars increment a little bit every year. That is part of the MSRP.

It is true that the contract is for MSRP and there is nothing that we can do, but the fact remains that, but for all the delays, customers will have the car prior to the date of price increase. I am also wondering if car makers, at least in the state, adjust price in new model year and not necessarily by calendar year. With Lotus having a fiscal year ending 3/31, I just don't see how they will adjust pricing 90 days prior to year-end.
 

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Exchange rate will also factor in here

Time will tell. I think the market might bear a small increase, but I'd guess that $2500 would be at the higher end of possible price hikes.

Personally, I will opt out and wait for cars to show up in the classifieds with any price hike of more than say, $500

Short term demand is high, but what will it be in six months? A year? Three?
 

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I too would expect price to be MSRP at delivery time, unless you have a different contract with your dealer.

I can't imagine the dealer would get a price break on an 'early order' so they would have no discount to pass on to the customer. Sad, but not unexpected, since there is no actual sale until you take delivery.

This topic has come up before, including "How much would you Pay?" and so on. It's just a question of how Lotus chooses to balance the backlog with goodwill, currency fluctuation, and demand longevity.

If they jump the gun and increase too early, they will lose a lot of goodwill in the unfilled orders, and demand may drop too quickly for a good market penetration.

If they wait too long, they're leaving a lot of money on the table. Money they could use to fund future R&D.


My guess would be that Jan 2005 would be "too soon", since they've only just begun filling orders now and won't have even the first 30 filled by the end of the year. Those first orders are their biggest enthusiasts.

I know I wouldn't be too happy paying a higher MSRP while the guy who ordered at the same time (2003?) but picked his up first got it for less.

You have to think dealerships would like to see an MSRP increase, especially if the Invoice increase was a bit less. :)

It makes more sense to bump the price with the 2006 model year (April?) orders, maybe offer some different colors, bundle in an extra feature (cargo net) and set new pricing. That way they're not directly charging a higher price for the exact same car. There's at least a little value in having a newer model year, if nothing else.
 

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Randy Chase said:
I THINK.....the price the dealer pays is what the price is when the car is delivered. Not when the order is taken. No money changes hands until the car is delivered as far as dealer and Lotus USA.

That being the case, it would be my speculation that orders taken would not be part of the equation. Lotus would notify dealers that cars delivered after some point in time, would now be MSRP this new amount. I think.

TOTALLY SPECULATION on my part!
My fingers are now crossed that I get mine before any increases. I don't have a build date, so I'll just have to wait and see.

I've been expecting a December delivery for an upper 20's spot at Star.
 

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I think it would be classy, professional, and inciteful business sense for Lotus to keep the Elise at it's current sticker price for the entire 2005 model year.

Most folks getting the first model year cars will have waited, deposits down, for 1 - 4 years before delivery, and they should at least be rewarded by not having to pay more than the price they reasonably expected when placing the deposit.

As the owner of Lotus, I wonder how much influence Proton has in this, too?

Dave
 

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Obviously a price increase is in the future. I hope we don't see a price hike come the new year. I personally think it is absurd to raise the MSRP on a car that will have been out for only 5 months. Is it bad business? Beats me. How many will drop off with a 2500 price hike? Probably a few, but there are others ready to take their place. Unfortunately if there are drop offs my dealer isn't moving people up, and we are back to complaining about dealers selling to the highest bidder rather than pleasing deposit holders. Doomed.
 

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Donovan said:
Obviously a price increase is in the future. I hope we don't see a price hike come the new year. I personally think it is absurd to raise the MSRP on a car that will have been out for only 5 months. Is it bad business? Beats me. How many will drop off with a 2500 price hike? Probably a few, but there are others ready to take their place. Unfortunately if there are drop offs my dealer isn't moving people up, and we are back to complaining about dealers selling to the highest bidder rather than pleasing deposit holders. Doomed.
Seems like there was a "how much more would you be willing to pay if they raise the price" thread a few months back...seem to remember folks not being too willing to pay more, with other cars out there...2005 Corvette, etc.

Dave
 
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