What Will Happen to Boat Pricing when Euro Is Under Par to US$ ?

[daletournier]

I agree with Invictus69. Also I'm not sure the US dollar will keep going long term, QE4 I believe to be likely, countries are buying their own debt to service their existing debts? By printing money. There is a currency war happening that is a race to the bottom. From what I read all major currencies are competing to kick start their economies by devaluing their currencies, it's a race to the bottom. Therefore I believe boats will get cheaper depending on the value your own currency holds. 2015 will be interesting not only in regards to Europe boat prices.

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[EscapeFromNY]

I'm currently in the market for a new European made boat (e.g. Beneteau or Bavaria). As a practical matter, what does the decline in the Euro mean for my purchase in the US today?

My plan is to purchase from inventory. For a boat in stock, has the dealer already paid the manufacturer, or is it the case that the manufacturer provides the boat (with dealer paying interest after a certain amount of time), and the dealer pays the manufacturer once the show-roomed boat actually sells? If the latter, does the dealer pay the manufacturer in Euros? And, if that's true, does that mean that there's more room to negotiate from the "price-list" price I received from them several months ago (over which period the Euro has dropped more than 5% vs USD)?

Also, with respect to Beneteau, I understand that some are manufactured in the US (such as the Oceanis 45), whereas others are built in Europe (Oceanis 48, I believe). If fx makes a difference to my purchase price, would it be fair to say the price of the European built boat would move more?

On a $400k boat, fx changes over the last few months are in excess of $20k. Any thoughts are greatly appreciated!

[Andy73]

Originally Posted by EscapeFromNY

I'm currently in the market for a new European made boat (e.g. Beneteau or Bavaria). As a practical matter, what does the decline in the Euro mean for my purchase in the US today?

My plan is to purchase from inventory. (SNIP)

Not strictly an Apples to Apples comparison, but for a peek at what you are after, look at the prices of European cars in the US... That should give you a small indicator of how the currency change may impact you...

[robert sailor]

Originally Posted by Andy73

Not strictly an Apples to Apples comparison, but for a peek at what you are after, look at the prices of European cars in the US... That should give you a small indicator of how the currency change may impact you...

The higher end cars like BMW etc are not dropping in price and I doubt they will, not sure about boats but I don't think cars are a good comparison.

[savoir]

It would be cheaper to buy a late model boat over in Europe. You might pick up a 2 year old boat for around 40% below the new price in the US.


Compare
http://www.yachtworld.com/boats/2015/Beneteau-Oceanis-38-2685260/France#.VMWWvCz9ljo


http://www.yachtworld.com/boats/2014...s#.VMWXdCz9ljo

[savoir]

Compare these Dufours which are not quite the same model but you get the idea

2013 Dufour 40e Sail Boat For Sale - www.yachtworld.com

2012 Dufour 40E Performance Sail Boat For Sale - www.yachtworld.com

In the US a new one will be in the 250 - 300 bracket depending on fitout.

[Arthur Garfield]

European boat makers will bring their wares to US shores in hopes of holding their margins(profits).Buy in europe when USD is at parity or below.Euro prolly going to a low of USD0.84 so keep your powder dry for this.Europe DEflating and prices for things there will drop.Many many sailboats on market -great deals are afoot.Especially with what with the Suisse just did letting their franc float freely !!!

[lawdawg]

This has been a great discussion and as someone looking for a good deal, definitely encourages me to hold off for a bit and perhaps pick something up in the summer for a late year crossing, thanks for the information

[Andy73]

Originally Posted by robert sailor

The higher end cars like BMW etc are not dropping in price and I doubt they will, not sure about boats but I don't think cars are a good comparison.

That is kinda my point... I doubt the companies will pass along the currency difference to the American consumer. Boats or cars...

[robert sailor]

Originally Posted by Andy73

That is kinda my point... I doubt the companies will pass along the currency difference to the American consumer. Boats or cars...

I tend to agree with you for boats bought in the USA but I think if you picked up the boat in France there would be a savings.

[valhalla360]

Originally Posted by Andy73

That is kinda my point... I doubt the companies will pass along the currency difference to the American consumer. Boats or cars...

BMW and boat manufacturers won't change their pricing overnight. With the exchange rate changing fast, they will likely be cautious in case it rebounds. Also, they bought the materials and labor at a higher relative cost, so they will be loath to take the loss.

Assuming the exchange rates start to hold steady in this range, you can expect prices to gradually shift to match. It might take a year or two before everything is in line with the exchange rate.

If you are an american with an account full of US Dollars and will be buying in Europe, you can certainly take advantage of the current situation by converting those dollars to Euros and buying now.

[goboatingnow]

Originally Posted by lawdawg

This has been a great discussion and as someone looking for a good deal, definitely encourages me to hold off for a bit and perhaps pick something up in the summer for a late year crossing, thanks for the information

I suspect we will see an undershoot, but I suspect the Euro will recover, but not to 1.20-1,25. There are too many competitive devaluations going on at the moment to not only affect the dollar , but also to partially strength the euro too.


Id certainly be hedging soon

dave

[RKsailsolo]

Originally Posted by savoir

It would be cheaper to buy a late model boat over in Europe. You might pick up a 2 year old boat for around 40% below the new price in the US.


Compare
http://www.yachtworld.com/boats/2015/Beneteau-Oceanis-38-2685260/France#.VMWWvCz9ljo


http://www.yachtworld.com/boats/2014...s#.VMWXdCz9ljo

I don't believe that listing in France is a legitimate selling price.

[RKsailsolo]

Originally Posted by goboatingnow

I suspect we will see an undershoot, but I suspect the Euro will recover, but not to 1.20-1,25. There are too many competitive devaluations going on at the moment to not only affect the dollar , but also to partially strength the euro too.

Id certainly be hedging soon

dave

Dave (and Valhalla too),

I have to admit the currency fluctuations confuse me somewhat. So you are suggesting there are countermeasures that could negate the current trend--albeit short lived--to parity and defuse USD strengthening over EUR?

[valhalla360]

Plenty of things could happen. QE4, Greece leaving the euro, Greece staying in the euro, oil production constricting, etc.... The changes are emotional as much as factual (sometimes more emotional than factual)

I won't pretend for a second I could tell you where it will be in 6 months. If I could, I would be rich. Short of something major impacting the rates, I'm guessing we will settle in right around parity give or take 10% for a while but we will enjoy it as long as it lasts but no expectations for how long it lasts.