$ vs. Euro for purchase of French Cats

[Barra]

Originally Posted by Poozer

This is an important observation. Since the new boats have devalued by 20% in USD terms, the sellers of used European boats (regardless of location) will have to discount. Otherwise you could wind up paying more for a used Lagoon in the USA than a new one in France, which of course makes no sense. And, if the European boats have to discount, the non-European boats will also have to discount to stay price competitive.

There are two winners in this scenario, buyers that earn in US dollars and the European builders, who will see additional demand with no change in internal costs. The losers are the non-European builders who have to cut margins to compete.

Not quite right mate - the sellers of used european boats in europe will still have the same sale price in Euros - no extra discount as far as they are concerned. Its only a "discount" to USD buyers in USD (though AUD buyers are still hanging in there a bit thanks to super marios grand experiment).

I would even expect that the influx of USD buyers to the european second hand market may actually stimulate the larger blue water end of the market there a bit. When us Aussies did it a few years back we didnt quite have the numbers to move the market but we were everywhere in the med all the same. The Yanks will be in much bigger numbers.

If i was looking with USD right now i would buy this year in europe and while you may get a slightly better FX rate as the QE "experiment" fully kicks in later in the year the best used boats will go this spring.

just my 2c

[Poozer]

Originally Posted by Barra

Not quite right mate - the sellers of used european boats in europe will still have the same sale price in Euros - no extra discount as far as they are concerned. Its only a "discount" to USD buyers in USD (though AUD buyers are still hanging in there a bit thanks to super marios grand experiment).

Yes, you're right. I wasn't clear in my previous post. I meant to say the sellers of European boats OUTSIDE of Europe. The folks in Europe have no impact. Sorry about that.

[beauris]

just food for thoughts , the inventory of pre-owned catana held by catana have almost all been sold to dollar paying clients in january..i m getting worried for teh prices of boats in europe...

[sailingforfun]

Euro trading 1.101 vs $US today.

New and Used European boats getting cheaper!

[beauris]

yep and bad for us European...afraid it will drive the prices of preowned upward

[sailingforfun]

Yes it will. The major purpose of cheapening one's currency is to spur inflation in that currency. As foreigners start taking advantage of the cheap euro, prices in Euro's will rise. Thank Mario Draghi & Co.

[Zzmeyer]

As a former CFO of a multi-national NYSE company I was always amazed at the complexity of currency movement. Let's take my new Beneteau Sense 50. The Euro, if it reaches parity with the dollar, would indicate the purchase price would be 30% lower than when I ordered it 6 months ago. However, much of what they purchase for the boats is from companies in countries not tied to the Euro - Yanmar, Onan, if they get resins, etc from non-EU sources. Presumably the cost of these items will go up significantly if they pay in euros. Their costs will also be determined from where they get there money. Beneteau, for example borrows some of their working capital in US dollars (knowing they are going to be paid in US dollars for US bound boats). Therefore, the weakening Euro benefit is somewhat offset by their higher cost of capital repayment. I'm also assuming shipping and commissioning (roughly 15% of the cost of my boat) will not benefit from the change. Please keep this thread alive. At a one to one exchange rate, I can certainly trade up!

[beauris]

beneteau while being a giant company when it comes to sailing boats ( or motor boats) is but a dwarf if you compare it to a real industrial company..a very successuf design will be produced a couple hundred times..( and teh sense 50 a lot less). while materials ( raw or not ) are an important part of the boat cost i believe the human cost ( workers) is higher...boats are a very labor intensive industry..and beneteau also produces in the USA..and neither french worker nor american ones are cheap..

[Zzmeyer]

Don't disagree at all. Labor is a major component. I just toured a Beneteau factory in Saint Gille Croix de Vie and was surprised at the level of automation - but also how much was done by hand. I bet, however, that total labor cost as a percent of purchase price isn't greater than 25-30%. You are also correct, that Groupe Beneteau is really quite small. Revenues were about $800m TTM and cost of sales about $400m. I just know that I know so little about what will happen that this thread is a good place to track what rally happens with price.

[beauris]

the level of automation is quite recent and has been "provoqued" by german competitor bavaria in the 2000 ( bavaria was selling 30% cheaper)

in fact if you ad automation and relative size of beneteau ( ie buying capacity) you understand why beneteau or lagoon in this thread is cheaper than its competitor...

i l lhave to sell a lot more champagne to buy a new one in any case

[Zzmeyer]

If the price of the Sense 50 drops by 30% I''ll have to drink the champagne to forget I paid too much - or trade up.

[beauris]

got 5 millions bottles, you re game?

[Zzmeyer]

I'm looking for crew. Particularly those with booze.

[GoingWalkabout]

Originally Posted by Zzmeyer

I'm looking for crew. Particularly those with booze.

Which raises another question. Can I have a private distillery on my boat? If I do the distilling in international waters would it be legal?

With the money I would save on liquor and the saving on the Euro decline I could buy a much bigger boat

[beauris]

a distillerie is a bit heavy ( i know i have a professional one as well) you'd need a very big boat..that you could probably pay thanks to the low euro ( doing my best to stay in topic here)