KTm to raise US prices by 14%

[atadaskew]

Bad timing.  That would mean if it was $15K, they're now gonna ask $17,100.

As reported by motorcycle-usa.com
http://www.motorcycle-usa.com/285/2747/Motorcycle-Article/Euro-Gossip-March-2009.aspx

KTM has announced it has increased its global sales by 7% in the last year. However, in anticipation of a worsening market it is cutting production by 10% for the forthcoming year. These actions are not enough though to stop it announcing a 14% price increase across all its range.

[xbud]

 They might change their tune when they see sales drop by 10% or more this year

[R Doug]

So, does this increase the value of my bike if selling as used?    

[Cricket1]

So, does this increase the value of my bike if selling as used?    

Nope, it just helps to decrease their total sales.

[R Doug]

 

[Fav]

So, does this increase the value of my bike if selling as used?    

Helped me get $742 shipped for Akrapovic Slash cut CF slip-ons. I paid $800 shipped a year ago. Same site I bought them from has them for $980 now. FYI Akrapovic raised their prices too. People are still buying their pipes.

KTM might not be so lucky.....time will tell.  

[JamesG]

Total BS since the USD has gotten stronger vs. the Euro prices should be going DOWN. Energy and materials have gone down in cost.
bye bye KTM.

[desert_rider]

Keeps Taking Money

[atadaskew]

Total BS since the USD has gotten stronger vs. the Euro prices should be going DOWN. Energy and materials have gone down in cost.
bye bye KTM.

No kidding.  Same time last year the Euro bought $1.55.  Now it is about $1.30.  Prices should be coming down.
Add to the fact that their sales have dropped, they INCREASE pricing?
Good luck with that.

[R Doug]

Perhaps there's a gross misunderstanding of the basic concept of supply and demand.  As noted above, Akra did the same thing with their exhausts this year.  Lucky for me, I got a nice discount from my retailer, but Arkapoic did increase prices this year too.  There's some weird trend with these European companies.  

[R.Markus]

They will still be worth every penny, unlike that jap crap.

[Cricket1]

Perhaps there's a gross misunderstanding of the basic concept of supply and demand.  As noted above, Akra did the same thing with their exhausts this year.  Lucky for me, I got a nice discount from my retailer, but Arkapoic did increase prices this year too.  There's some weird trend with these European companies. 

Well yeah, they are European, so have a skewed view of free market economics. 

[Mr Sunshine]

Not sure why people think this is weird.  The Euro is down from the Dollar so they need to balance the cost somehow.

[DNA]

I was looking at a new 08 990A in WVA last weekend - they are offering it for ~ $11,500 - including a >$1800 package of extras with tires, Zumo 550 + mount, the KTM rally school, and a bunch of other cool stuff.  It almost came home with me.  Still might unless one of you fine folk jump on it.

It is an awesome deal - if one has ~$11K around.

[atadaskew]

Not sure why people think this is weird.  The Euro is down from the Dollar so they need to balance the cost somehow.

You have it the wrong way round.
Simple foreign exchange.
1 EU = $1.5
Therefore 10,000 EU = $15,000.

Now the $ is stronger so it buys MORE EU.
Currently 1 EU= $1.3
Therefore a 10,000 EU bike = $13,000

So as the Euro is weaker, the bikes should be cheaper in $ terms.  Not more expensive.

Or to put it in even simpler terms, a weaker currency is better for EXPORTS as goods EXPORTED will be cheaper for the importing nation.
KTMs are exported from the weakening currency, the Euro, to the strengthening currency, the $.

[AV8OR]

I was looking at a new 08 990A in WVA last weekend - they are offering it for ~ $11,500 - including a >$1800 package of extras with tires, Zumo 550 + mount, the KTM rally school, and a bunch of other cool stuff.  It almost came home with me.  Still might unless one of you fine folk jump on it.

It is an awesome deal - if one has ~$11K around.

Where in WVA and what dealer?

[DFH]

You have it the wrong way round.
Simple foreign exchange.
1 EU = $1.5
Therefore 10,000 EU = $15,000.

Now the $ is stronger so it buys MORE EU.
Currently 1 EU= $1.3
Therefore a 10,000 EU bike = $13,000

So as the Euro is weaker, the bikes should be cheaper in $ terms.  Not more expensive.

Or to put it in even simpler terms, a weaker currency is better for EXPORTS as goods EXPORTED will be cheaper for the importing nation.
KTMs are exported from the weakening currency, the Euro, to the strengthening currency, the $.

Its the old security guard syndrome... a little knowledge is dangerous.

Firstly if the Euro is weakening against the world basket of currencies then the cost of building the bikes in Euro's will increase- especially if part of KTM's finance was raised in US $. If the cost per unit rises higher than the differential change between the bikes native currency and your currency then in fact the favourable exchange rates just hide the true extent of the unit cost rise.

Secondly if KTM anticipate a decline in production of 10%, their standing costs remain the same but with less bikes to spread those costs over then unit cost will rise by at least 10%. KTM are not alone in cutting production... have a look at Yamaha news in the same quoted article

Thirdly the retail cost of new bikes in the US against the world average has been held artificially low for many years, aided no doubt by the often unrealised promise of high volumes. With the current global financial crisis (precipitated by the mindlessly unregulated US financial system chocking on its own vomit) the idea that that the US market is high volume heaven is having a rest...

KTM will not be a lone voice in the wilderness... expect similar price rises from all bike importers. If you can afford it, buy new now. Motorcyclists will never get so much for so little ever again.

DFH

[DNA]

Where in WVA and what dealer?

Good folks - we have bought a bunch of bikes from them (1 last week end) - an 2 of Pops perfectly restored huskies are hanging from their ceiling.

RIDERSVILLE CYCLE
75 GOODTIMES DRIVE
25411 BERKELEY SPRINGS (WV)

[DNA]

Its the old security guard syndrome... a little knowledge is dangerous.

Firstly if the Euro is weakening against the world basket of currencies then the cost of building the bikes in Euro's will increase- especially if part of KTM's finance was raised in US $. If the cost per unit rises higher than the differential change between the bikes native currency and your currency then in fact the favourable exchange rates just hide the true extent of the unit cost rise.

Secondly if KTM anticipate a decline in production of 10%, their standing costs remain the same but with less bikes to spread those costs over then unit cost will rise by at least 10%. KTM are not alone in cutting production... have a look at Yamaha news in the same quoted article

Thirdly the retail cost of new bikes in the US against the world average has been held artificially low for many years, aided no doubt by the often unrealised promise of high volumes. With the current global financial crisis (precipitated by the mindlessly unregulated US financial system chocking on its own vomit) the idea that that the US market is high volume heaven is having a rest...

KTM will not be a lone voice in the wilderness... expect similar price rises from all bike importers. If you can afford it, buy new now. Motorcyclists will never get so much for so little ever again.

DFH

Not to disagree with you completely, but I do business in over 30 countries and the vast majority of the currency and exchange issues I have are with customers in Oz.  The consumers there seem to be inordinately sensitized to this issue to a degree not reflected in any other country. Regarding our mangled financial institutions, it is possible your banks could seize this opportunity to become the next world financial power - if it were possible for any foreign depositor to every get their money out again intact.

That said - a stronger $ means imported products into the US will be less expensive in relative terms for us to buy - thus increasing the demand for imports and potentially hurting out export business.

I believe your second point is right on though - the lowered demand will cause a raise in price especially as the fixed costs will not move, and variable costs are not that much on these type of goods. The lower demand will cause the majority of the raise in price.

As for point 3, I believe our prices are not subsidized, our volumes are high and economies of scale (combined with a mostly favorable import tariff system today).  Companies that do not make money here do not stay doing business here for long.  

As this administration really gets rolling with the Socialist States of America - look for more protectionism entering our marketplaces.  That will destroy the motorcycle industry in the USA.  Even Buell has lots of imported parts - so watch out and buy now, and a spare if you can.

[Cricket1]

 
As this administration really gets rolling with the Socialist States of America - look for more protectionism entering our marketplaces.  That will destroy the motorcycle industry in the USA.  Even Buell has lots of imported parts - so watch out and buy now, and a spare if you can.

DNA;

I think you are exactly right on all of your points.

Tsk, tsk on that last one about the current administration!

Got your flame suit on??  The Obama disciples will be along shortly to chastise you.