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Now that delivery of the new Trek Exe range is imminent, I've just noticed that the prices given out in July are outdated already, with the entry level 9.5 increasing from 5750 to 6400 - an increase of around 13% in around 3-4 months. I can understand a price rise of this magnitude from one model year to the next, but why would an increase of this magnitude happen in such a short period of time just after announcing the release price.
I'd have thought that when the prices were given out that the components had all been ordered and priced, and probably build was under way at the factory. Yes, there's been currency fluctuations, but not enough to explain this, and surely someone the size of Trek would have forward contracts anyway?
Thanks to KamiKwazi and Sterling tanking against the USD - Trek UK will be billed in USD when the consignment arrives, so UK prices will reflect the dollar price at the time
One of the guys in my LBS mentioned a boutique US frame supplier putting frame prices up from £6700 to £8900, we guessed because of Ti prices and £/$.
Still felt like they were milking it, that brand in particular probably has a fair amount of padding in their RRPs to begin with 🙄
Yes, there’s been currency fluctuations, but not enough to explain this, and surely someone the size of Trek would have forward contracts anyway?
Your local dealer / uk distributor won't have hedged anything - so the price they pay in $ for the bike from Trek will go up and down in £ with exchange rates. The $ is ascending and the £ is descending, so any price is probably targeted at covering for changes over the next few months...
A dollar cost about 82p in July. It went as high as 93p, currently hovering around high 80s. They'll presumably need to hedge a bit against it going even higher.
You tend to pay for shipping and taxes on imported things when they arrive too, using rates at that time so they'll be paying 8-10% more for all that too.
Your local dealer / uk distributor won’t have hedged anything
Some distributors do, but even those that do will be running out/have run out of hedged money. But in general expect price rises of around 15%. Price inflation in the supply chain has swallowed the fat that there was, there's nothing left to give so if new normal is $1.10 > $1.15 then you should expect a commensurate 15% increase in prices on things bought originally in $, which happens to be virtually 100% of most bikes.
aah, ok. I'd assumed that the UK distributor would have hedged.
A bit of googling shows that some dealers are still showing the old price on websites as well, so might be some variation in prices.
Some distributors do, but even those that do will be running out/have run out of hedged money.
Yes, maybe with the larger companies, I guess the smaller ones won't have the spare cash to do it.
I went to visit someone for work yesterday (large Engineering fabricator) who are currently making something to be exported to South America - they sold the contract in Dollars and are currently $250k up due to the pound tanking over the last few weeks... so it works both ways.
I've noticed a few UK bike companies doing a special US marketing push over the last few weeks.
Good luck to them, someone deserves to benefit from this shitshow.
so it works both ways.
All our revenue is in $ and most of our costs (salaries) are £, so we're up at the moment...
they sold the contract in Dollars and are currently $250k up due to the pound tanking over the last few weeks
Yep weak £ = good for exports. We've seen a big jump in sales to the US over the last few weeks. And like mentioned above we're prepping new shipping & import options to make it easier for US buyers. That however is a temporary benefit to us as soon the price of the bikes will have to rise swallowing the USD/GBP benefit to the US customers too.
It won't just be currency fluctuations.. you need to price in inflation and interest rate changes as well - they affect things in a few different ways.