Talk Morgan Forums Community The Malvern Arms MMC price increase

Here are a few thoughts I had while walking the dog....

The price comparison with Caterham is interesting , another small manufacturer of specialist cars , although admittedly aimed at a slightly different market .
I know the pound is low at the moment , but I can't imagine prices will drop if it rises !
There is virtually no inflation at the moment and two price rises in a little over 3 months , totalling a bit over 8% is a lot .
Will the quality and customer service keep up with the price increases ?

I seem to remember dealers are now required to buy a number of cars each year for stock (or demonstrators ) . There certainly seem to be a fair number of new cars available . The waiting time for new orders also seems to be much less than it used to be

The Finance Director " left " , has he been replaced or does the new Commercial Director cover this ? There is also a new Chairman.

Interesting times .

Unless they are facing cost increases which are running at a similar level to the 8& price increase, one can only imagine they are trying to manage demand down?

If it's cost increases that are the issue, it would be interesting to see a breakdown of where they are coming from.

Conjecturing an average customer spend of 50k over 700 cars, an 8% rise gives a gross revenue increase of £2.8m - quite a chunk of money.

Interesting points Tim and as you say that is a worthwhile increase in gross revenue .

Someone once said to me that if you double your prices and lose half your customers you are probably in a better position and certainly not worse off !

I would be surprised if the export price varied. You price to market not cost so if the sale was possible last month at x euro then why reduce it now? Certainly thats how I did it when exporting

The same applies to importers. Its an interesting fact that a 1% devaluation in sterlings trade weighted exchange rate only results in a 0.5% increase in import prices - the seller absorbs the rest of the cost.

Morgan isnt a mass manufacturer. To them, margin increase is more important than volume increase

Actually, I think MMC are just following the same business model and approach that my local council have with Council Tax.....in spite of virtually zero inflation and non-existent pay increases.....same old services (make your won mind up about those!) but now 5% more expensive.....

So what is it that costs more? Or are we going to get more for our money? Perhaps someone is has just mis-interpreted 'Adding Value'?

Absolutely. I don't know how they do their financial analayses, but one would expect when they do their breakdown of the total cost of production per car, there's a not insignificant amount that gets spent sorting stuff out post-delivery either in formal or informal warranty work.

All production systems recognise that the earlier in the process that one spends money, the less the overall cost, and so it would always makes sense to produce fewer cars and get them right than struggle to meet unrealistic production targets, ending up with unsustainable warranty costs due to flawed production practices.

If demand is too high to cope with, then increasing the price is a good way to manage down the demand whilst ensuring an increased realised margin - especially if one sees a reduced overall cost of production too.

It can be a bit of a double-edged sword, of course. The more one focuses on a price-insensitive market segment, the more one finds their expectations and influence are high - so one needs to be confident of being able to satisfy those buyers. Typically it's important to get stuff like the kaizen event process working properly and do a full root cause analysis on each event - quality errors will always happen, but no mistake should happen more than once.

Cost of renting the factory could be leaking money....

Cost of licensing the use of other hardware and technologies

Cost of Advertising.

Cost of Engines and Transmissions bought in $'s

Cost of German Engines.

You want R&D if not done totally in house then that is additional.

Maybe Government "eco" grants had strings attached

Aero Tubs are they exactly the same price that they were?

Factoring in safety margins for Warranty issues - with the rise of people being informed of their rights and various issues to a company like Morgan Websites like this must be a source of hurt financially. The information age......

And a million and one other factors you could care to think about.

Heresy I know, and I would never go through with it, but couldn't help thinking about the price comparison with a £42k poverty spec Plus Four for this new Merc.

It is indeed a conundrum. 8% this year is a lot.

The new price increase of a fiver a head on the tour punters and the increase in attendees over the past year has surely raised revenue, and the new visitor centre experience due to open at the end of summer should also raise revenue through increased sales.

I think it's all down to Jays expenses..

...the Merc would have coped much better with the recent four hour journey we had in the Mog mostly on congested Motorways. It doesn't like in and out of 1st and 2nd gear.....I didn't like the cramp in my right leg or the sore a*se and creaky back when we finally got home.