April price rise!!!!!

[AEJim]

It's certainly not just Naim who are having to increase prices, not every company may obviously be passing on increases in manufacturing costs to the end-user, but you can be assured that some are lowering their margins to dealers and many cost increases are built into the retail price of new ranges.

If you have a long-standing range with ongoing production it is far more likely you will see retail increases as a manufacturer can only absorb so much. No-one WANTS to put up their prices in a recession, there is a huge domino affect that comes from last years oil prices as well as the banking troubles.

From our (AE) point of view - the cost of our raw materials has risen 40% in the last 18 months (due to the oil prices of last year mainly), we buy our stock in $'s (this is everything from MDF to Aluminium, capacitors etc, the costs all go up for these suppliers too so you get a cumulative effect), you take a double hit when the currency is weak. Many suppliers hold off on increases as long as they can but there is a breaking point where they realise they have to make a substantial increase, this is rarely on a day-to-day basis so it can be quite a jump. Then you have to buy in bulk at a fixed price so you can't "play the markets" and hold out for 6 months to see what happens.

These are difficult times to be a manufacturer, not just because of cash-strapped customers but because you can be seen to be the "bad guy" by increasing prices when the economy is struggling. We all absorb fluctuations in cost (said fluctuations are generally on an upward slope, as with your home fuel costs) but there is a limit you hit where you have to change things to stay in business! Some build in more margin/profit than others and so can absorb more - naming no names, others have a set minimum that they are never far from, you will see these companies alter prices far more readily when they need to!

 

[Anonymous]

AEJim:
It's certainly not just Naim who are having to increase prices, not every company may obviously be passing on increases in manufacturing costs to the end-user, but you can be assured that some are lowering their margins to dealers and many cost increases are built into the retail price of new ranges.

If you have a long-standing range with ongoing production it is far more likely you will see retail increases as a manufacturer can only absorb so much. No-one WANTS to put up their prices in a recession, there is a huge domino affect that comes from last years oil prices as well as the banking troubles.

From our (AE) point of view - the cost of our raw materials has risen 40% in the last 18 months (due to the oil prices of last year mainly), we buy our stock in $'s (this is everything from MDF to Aluminium, capacitors etc, the costs all go up for these suppliers too so you get a cumulative effect), you take a double hit when the currency is weak. Many suppliers hold off on increases as long as they can but there is a breaking point where they realise they have to make a substantial increase, this is rarely on a day-to-day basis so it can be quite a jump. Then you have to buy in bulk at a fixed price so you can't "play the markets" and hold out for 6 months to see what happens.

These are difficult times to be a manufacturer, not just because of cash-strapped customers but because you can be seen to be the "bad guy" by increasing prices when the economy is struggling. We all absorb fluctuations in cost (said fluctuations are generally on an upward slope, as with your home fuel costs) but there is a limit you hit where you have to change things to stay in business! Some build in more margin/profit than others and so can absorb more - naming no names, others have a set minimum that they are never far from, you will see these companies alter prices far more readily when they need to!

At last a manufacturer!!!!!!!!!!! The cavalry are here, the cavalry are here!

I do not know, Meridian Man, if you ever followed that link to read Cambridge Audio CEO's comments...... but I hope you did. If you did not though.... read and re-read this. He is a manufacturer...... he knows. Look at what he is saying RAW MATERIALS UP 40%... he is cutting his margin..... and still having to increase prices.

It is not all about, in this difficult, difficult time, some manufacturer spying poor, poor Meridian Man and trying to take him for an extra 5%...... you are not enacting some kind of socialist hi fi last stand for common decency.

Lets try it from a different angle............. You love Naim, right? Would you still like to be buying them in 10 years? What if the CEO came to you and said..... could you give us £150..... else we might go out of business and by giving them that £150 you ensure that you get to see the next generation of Naim products? Would you consider doing it? I mean you are willing to give them £3000..... extra £150 ensures that they can keep trading and churning out those boxes you love??????

 

[Anonymous]

Why single out Naim ? Do you have a grudge against them that you haven't owned up to ? Every manufacturer on the planet is in the same boat and assuming you have a job, then surely you know that. We should be very grateful that there are still so many incredible products still available to us - no matter your taste or price range.

I've been saving up for a new pair of speakers for some time, I want the best my money can buy and I'm perfectly happy to accept that. It has become apparent that since I've started looking the sheer number and quality of speakers on offer is almost staggering. The same applies to every other component.

You would obviously prefer that in the years to come there is a choice of one or two manaufacturers who make every hi-fi component and that's that, that we all listen to the same bland homogenised products and pay through the nose for them and our love of all things hi-fi will become a distant memory. I, for one, dread the day.

 

[Anonymous]

I fully appreciate the FX argument for manufacturers putting up prices (GBP vs G8 Basket has hugely weakened in recent months). However I dont see how they are managing to pay more for their raw materials NET of FX impact (as most are priced USD).

Oil has seen a huge sell off in recent months, touching $140 last summer, now offered in low $40's. The entire base metals (ally, copper, nickel, lead etc) complex is at a multi-year low too. Bullion has enjoyed a recent rally owing to it's inflation hedging benefits, but last time I checked, Marantz' champagne gold fascia wasnt real.

Would be great if an industry insider could reveal more on this, just out of interest really.

 

[Anonymous]

Please don't feed the troll.

 

[AEJim]

thfcwestlower:
I fully appreciate the FX argument for manufacturers putting up prices (GBP vs G8 Basket has hugely weakened in recent months). However I dont see how they are managing to pay more for their raw materials NET of FX impact (as most are priced USD).

Oil has seen a huge sell off in recent months, touching $140 last summer, now offered in low $40's. The entire base metals (ally, copper, nickel, lead etc) complex is at a multi-year low too. Bullion has enjoyed a recent rally owing to it's inflation hedging benefits, but last time I checked, Marantz' champagne gold fascia wasnt real.

Would be great if an industry insider could reveal more on this, just out of interest really.

ÿ

Bit busy today so just a brief answer before I head out -

In the same way that fuel at a fuel pump is months behind the "actual" price (unless it's a rise!) we have the same problem with suppliers - they don't drop prices the instant there's an oil drop, that would not make financial sense to them as their running costs will have been up for months. Tie this into the fact that new product you see on the shelves was generally not made earlier that week and, even if it was, the materials were probably bought in bulk a fair time ago to get the best price!

Few companies, especially those who deal in large volume sales have the luxury of buying materials on a day-to-day basis!

 

[malg]

Good Lord THFC do you write for The Economist? That's a pretty in depth answer. I have to agree with some of the earlier posts on this thread, and if you don't like the price then don't buy the kit. It's basic common sense.