Lotus press release on MSRP increase

jml1952 said:

I believe that the Elise debuted in the US market when Chris' car was delivered on July 15th. I don't believe that the dollar-pound ratio has shifted 2.3% in that period of time. I suppose that Mr. English has a different perception of debut.

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Well, here's what I said in the other thread. And this was before I checked Yahoo Finance after I saw this thread tonight.

Ground Loop said:

Well, there's a $945 bonus for each one of those cars.

Cool how that works, eh?

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My first inclination was that perhaps the exchange rate, or worry over it, may have been behind the move by Lotus. If the dollar devalues, then even though we pay the same, they get less in pound sterling.

See the following graph as to how quickly the cost of a pound sterling rose for us Yanks between August last year and March of this year: from $1.57 to $1.90 in 6 months

<img src="http://www.miketodd.net/encyc/dollar-recent.gif">

If the pound's cost (in dollars) continued to climb at the rate shown in this graph, today a pound would cost well over $2.

So what is the cost of a pound today?

Here it is for Sept 1: Sterling was weaker at $1.7935

Here' the source. http://news.moneycentral.msn.com/breaking/breakingnewsarticle.asp?feed=OBR&Date=20040901&ID=3947829

So, actually, <b>the dollar is stronger now than in March by about 10 cents, and about 25 cents stronger than it would've been if that rate of increase had continued</b>, so I'm less inclined to disagree with your assessment now.

There may, however, be other costs we are not privy to, such as inventory taxes that Lotus is stuck paying (they still have such things in less market friendly countries you know) simply because they couldn't get their cars out of the country soon enough.

For the most part, if the price gets too high, I suspect I can back out of my deal because California consumer protection is a bitch for biz most of the time. I just don't think the price increase is as sure a good bet for Lotus or its dealers as the more cynical amongst us would be inclined to believe.

Cool off, and then decide -- it won't help you to feel screwed even if you are.

I am not the author of this, so it's likely correct: " Revenge is best when served up cold."

Gil

P.S. -- I know, why bother with rational calculation when it's so much more fun to feel screwed. So, at worst, I wasted my time posting this. I'm getting screwed too, but it may simply be the inevitability of dealing with an English company that has always had business difficulties.

On the brightest side, I think it's a good thing none of us must trade places with the bean counters at Lotus this week.

And now that I've checked Yahoo finance, this the chart of Dollars converted to pounds for the last year:

And this is in the same fashion as my original post, pounds converted to dollars, but up to date.

Note that the Lotus reason just doesn't match reality. As I showed before, the steep decrease in the dollar was a problem between August 2003 and March 2004. The dollar has actually strengthened in the last several weeks.