The £ has strengthened so far today by over 1%, let's hope this is all a storm in a teacup!

Dave, delighted you have deep enough pockets to speculate on currency but most of us don't. It's great for the very few wealthy businesses who have the cash and the foresight, but for smaller businesses it's simply impossible.

David....buying forward doesn't need to use cash. You have to predict how much dollar you need over say a 6 month period,you are given a guaranteed rate that insulates you from fluctuations over that period,but you only need to use cash when you call off what you need.

Rally Design has a rolling buy option that auto replaces what we use up to a max limit,when an exchange rate is triggered,the day before the referendum we got 1.47.

It all works very well,sometimes you lose when the pound strengthens,but at least your rate is predictable over 6 months.

Obviously you cannot buy at the moment because the rate is bad,but it's worth having the system in place when the pound recovers, the next Euro crisis will balance things out,don't forget Greece,Italy and Spain are all bankrupt countries.

Sorry if I am teaching you to suck eggs.

KudosDave

Not at all David, really useful information, I completely get it. I had no idea such a mechanism existed to small businesses. Should I assume one would need to have the funds in place much like an ILC?

 

All the best, David

Here we go again! The next round of Brexit price increases seem inevitable.

 

It's looking as if we are being forced into another £75 per bike hike... that's unless things improve this week.

 

At the current exchange rates, even with this increase our already tight margins will be reduced still further.

 

We were buying $1.47 dollars for £1 only a few weeks ago before the result, this morning £1 buys $1.24.

 

What a disaster!

Edited October 10, 20169 yr by Wisper Bikes

the Pound dropped to $1.23 this morning.

 

http://ichef-1.bbci.co.uk/news/624/cpsprodpb/1784B/production/_91513369_sterling_historic_04_10_16_gra624-2.jpg

Kudos...We are still able to hold prices at pre referendum levels but as bike models are running out of stock I am not replacing that model......at current £ v dollar and £ v euro rates the resultant retail prices are just not competitive.

I did think that 10% price rises would be the norm but the direction of these exchange rates would suggest that 15-20 % may be necessary.

If we decide to leave the single market I just don't know where these rates will end up?

KudosDave

Time to start producing in the UK.

 

Anyone thinking of getting an ebike, should get one now. It'll be the same price rise for European made bikes. The predictions are that we will reach parity between the pound and the Euro. That would mean a 33% price rise for a UK dealer since last November, and most or all of that would be passed on to the end customer.

Time to start producing in the UK.

.

how can you get a constant, predictable supply of normal bikes when exchange rate moves like a yo-yo?

 

The problem with the exchange rates is its link to political division within the tories. Businesses don't normally worry too much about exchange rate, they can always reflect that in their pricing structure and preserve their competitivity. What is unsettling is uncertainty. If Mrs May changes her stance in May 2017, affirming that her government values now the Single Market more than FOM, the Pound will shoot back up to $1.60, its natural trade weighted value.

Most bikes need 6 months to spec up until they arrive then take 6 months to sell. Who would want to order and pay for bikes at $1.23 at the moment and sell in July when the Pound may climb back to $1.50?

how can you get a constant, predictable supply of normal bikes when exchange rate moves like a yo-yo?

 

You've misunderstood. By "Time to start producing in the UK", I mean everything, including frame, battery, motor, gears, control system and wheels. Soon, that will be a viable option, especially when we get some more relaxed regulations for manufacturing after brexit.

 

I'm waiting to hear whether I won the £134 million on the lottery. If I do win, I will start on the project immediately.

You've misunderstood. By "Time to start producing in the UK", I mean everything, including frame, battery, motor, gears, control system and wheels. Soon, that will be a viable option, especially when we get some more relaxed regulations for manufacturing after brexit.

 

I'm waiting to hear whether I won the £134 million on the lottery. If I do win, I will start on the project immediately.

sounds good, all one needs is permission to immigrate a few thousand Chinese/Indian children to do the eighty hour/week shifts. with a tory government this shouldn't be a problem at all.

There's a point there. If we were to manufacture everything in the UK and thus pay a fair price for the labour which goes into the product, what would we actually be able to afford? I suspect only a few people would be able to afford cars, so bicycle manufacturing might be a good area to get into. Do we have the skills, infrastructure, raw materials, to make e-bikes from scratch? Conventional bicycles we could probably manage, but what would they cost compared to average wages?

 

Like (almost) every historical civilization, our current prosperity relies on a form of slavery; we just keep our slaves in China.

I think we are OK with e-bike technology. We already make bikes and it's not difficult to design and manufacture motors, controllers and BMSes. Manufacturing invariably needs support from government, I believe the main reason we haven't done so is because successive governments prefer to promote trade instead of manufacturing.

There's a point there. If we were to manufacture everything in the UK and thus pay a fair price for the labour which goes into the product, what would we actually be able to afford? I suspect only a few people would be able to afford cars, so bicycle manufacturing might be a good area to get into. Do we have the skills, infrastructure, raw materials, to make e-bikes from scratch? Conventional bicycles we could probably manage, but what would they cost compared to average wages?

 

Like (almost) every historical civilization, our current prosperity relies on a form of slavery; we just keep our slaves in China.

very true, on the plus side the dystopia in which we reinvent British Leyland, only 5% of the population can afford something that resembles a Yugo and everyone rediscovers the joy of holidays in Margate will mean not having to put up with any "immigrants".

I think we are OK with e-bike technology. We already make bikes and it's not difficult to design and manufacture motors, controllers and BMSes. Manufacturing invariably needs support from government, I believe the main reason we haven't done so is because successive governments prefer to promote trade instead of manufacturing.

erm, do you seriously think we can produce an e-bike for less than bafang can? If we cant I imagine the public will be happy to pay three or four times more than the rest of the world for something inferior. but hang on, our economy will be worth about three times less, as will the pound. hmm, so we will have less disposable income, much less. so, in a nutshell, we will be a bit like Madagascar, except with delusions of living a life of first world consumption. better I think to ask the Chinese if we can produce their designs for them. perhaps we can compete with Vietnam as a cheap labour reservoir.

Derf...Bafang dont make bikes only motors and motor accessories,but I get your point. Batribike did try to assemble an e-bike in the UK,but it was too expensive I think?

The chinese have a home market of 19 million e-bikes per annum,we sell perhaps 20,000,enough said!!!

Now would be a good time to buy an e-bike....those companies that have stock bought at 1.50$ are very cheap compared to the inevitable norm in 2017 when prices will have to reflect these low pound exchange rates.

I suppose it will all settle down after Christmas when we all get used to paying more for everything.

KudosDave

how can you get a constant, predictable supply of normal bikes when exchange rate moves like a yo-yo?

 

The problem with the exchange rates is its link to political division within the tories. Businesses don't normally worry too much about exchange rate, they can always reflect that in their pricing structure and preserve their competitivity. What is unsettling is uncertainty. If Mrs May changes her stance in May 2017, affirming that her government values now the Single Market more than FOM, the Pound will shoot back up to $1.60, its natural trade weighted value.

Most bikes need 6 months to spec up until they arrive then take 6 months to sell. Who would want to order and pay for bikes at $1.23 at the moment and sell in July when the Pound may climb back to $1.50?

 

Hi Trex, Our problem is that the 40' Hi Volume container that arrived last week is going straight out. Then next one arrives next Monday, when I will have to pay for it at currently 1.238 Dollars to the Pound. My costs are increased by many £1000s.

 

Grueling!

 

All the best, David

sounds good, all one needs is permission to immigrate a few thousand Chinese/Indian children to do the eighty hour/week shifts. with a tory government this shouldn't be a problem at all.

 

Hi Derf, I would like to say that every Chinese factory I have ever visited only employs adults. The factories we deal with employ adult engineers at a higher wage than we would have to pay in Eastern Europe. It's now more expensive to manufacture in China than it is in many areas of Europe. The bikes are normally better made in China, we know this to our cost.

 

I don't know about all areas of manufacturing but the cycle industry I do know.

 

All the best, David

We have carefully looked at the possibility of manufacturing in the UK. The biggest problem we have is finding the people to make the bikes.

 

We took three months to find someone to train to become an electric bike mechanic. We offered a good proper salary not an apprentice scheme, there was simply no one available.

 

We have now found an excellent chap in Romania he is an electrician and understands bikes, we are teaching him to speak English, it seemed like the shortest rout!

 

We need to consider that nearly all bicycle parts are made in Asia, we would need to ship all the parts in, the only manufacturing would be assembly. So the bikes would not be a lot more expensive, we reckon about 5-8%. If we could guaranty the labour was available we would be in a far better position to make the move. Currently it's simply not worth the time to consider any further.

 

All the best, David

I have just put the phone down to another well known electric bike importer who is going to raise prices a further 10% on Friday. They had already put prices up by 10% four weeks ago.

 

I think Dave's estimate is about correct, 33% price increases on Bikes, EBilkes (and everything else) is about right for the spring of next year unless we manage somehow to unwind this.

I havent seen any child labour in any of the factories I have visited in China,which is over 70 factories. As labour costs rise I have seen an increase in robotics especially for welding.

China is good at making bikes,they have learnt a lot over the years,we would start at the bottom. We would have to import every component,with varying import tariffs on each part. The chinese allow about 50 dollars to assemble a bike ,could we assemble one in the UK at our minimum wage,possibly using EE labour.....oops we dont want them anymore,hehe????

KudosDave

Some of you don't know what you're talking about. You forget that both Brompton and Gocycle are made in the UK and are both very successful. We can expect to see a lower priced version of the Gocycle in the UK soon. They already make it for export. I'd be surprised if there's employees forced to work 80 hours a week in either factory, except the robots.

 

I've visited several Chinese factories. All the employees seemed to be very happy. The factories are not slave labour camps. They're no different to many UK factories. Some are a lot more modern and better equipped.

 

Please try and be sensible instead of trying to force your political prejudices on us.

Some of you don't know what you're talking about. You forget that both Brompton and Gocycle are made in the UK and are both very successful. We can expect to see a lower priced version of the Gocycle in the UK soon. They already make it for export. I'd be surprised if there's employees forced to work 80 hours a week in either factory, except the robots.

I'm no economics expert, but those two brands are pretty high-end aren't they? Would the same still apply at the budget end of the market where margins are pretty thin?

I have just put the phone down to another well known electric bike importer who is going to raise prices a further 10% on Friday. They had already put prices up by 10% four weeks ago.

 

I think Dave's estimate is about correct, 33% price increases on Bikes, EBilkes (and everything else) is about right for the spring of next year unless we manage somehow to unwind this.

 

Am I this 'Dave'.....if so I dont think I said 33% rise,but 20% is a definite possibility,the Euro is similar so German built bikes will probably be similar.

There is an imminent possiblity of a fight between Hammond and the May/3-Brexiters over the single market. I dont think the markets could care less over sovereignty or immigration just as long as we stay in the single market and retain bank passporting.

Hammond knows that big companies can move people and profit easily round the world,they will punish May if she doesnt see sense.

KudosDave

I'm no economics expert, but those two brands are pretty high-end aren't they? Would the same still apply at the budget end of the market where margins are pretty thin?

 

It works for low volume 'niche' bikes,the Brompton is a unique bike with its own loyal following and not really suitable for mass production...if Brompton tried to product a mountain style bike to compete with say Halfords brands they would fail.

KudosDave

Am I this 'Dave'.....if so I dont think I said 33% rise,but 20% is a definite possibility,the Euro is similar so German built bikes will probably be similar.

There is an imminent possiblity of a fight between Hammond and the May/3-Brexiters over the single market. I dont think the markets could care less over sovereignty or immigration just as long as we stay in the single market and retain bank passporting.

Hammond knows that big companies can move people and profit easily round the world,they will punish May if she doesnt see sense.

KudosDave

 

No Dave, it was D8veh, 20% is absolute minimum IMO but could easily be 33%.