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Model train prices rise after Brexit vote pulls down Pound

http://www.bbc.co.uk/news/business-37755137

Model train prices are set to rise by 10%.
Reply 1
Yep we're all screwed now
"Model trains". Yeah right, even train enthusiasts don't buy them nowadays. And don't be surprised by real train fares rising next year, the cost of replacing old fleet still needs to be funded Brexit or no Brexit
Yeah model train prices going up is going to absolutely kill us all.
To be honest, a weaker currency isn't so bad for the model trains industry. They mostly sell to international buyers.

Yes, it will mean higher labour and materials costs, but this is over-compensated by the 15% increase in price competitiveness. If you adjust the sale price (the bigger number) by an increase of 15%, and the costs by 15%, there is a net gain overall.
(edited 7 years ago)
Reply 5
its the end of the world
Reply 6
Original post by CherishFreedom
To be honest, a weaker currency isn't so bad for the model trains industry. They mostly sell to international buyers.

Yes, it will mean higher labour and materials costs, but this is over-compensated by the 15% increase in price competitiveness. If you adjust the sale price (the bigger number) by an increase of 15%, and the costs by 15%, there is a net gain overall.


The retailers have already said they can't do much about the low pound and price rises because most manufacturing is done overseas. Even a low pound will still make it hard for British manufacturers to compete against China with its very low labour costs and economies of scale which is why manufacturing was outsourced in the first place.

I think this will just make people find even lower cost countries than China to manufacturer in rather than bring it back to Britian.
(edited 7 years ago)
Original post by Maker
The retailers have already said they can't do much about the low pound and price rises because most manufacturing is done overseas. Even a low pound will still make it hard for British manufacturers to compete against China with its very low labour costs and economies of scale which is why manufacturing was outsourced in the first place.

I think this will just make people find even lower cost countries than China to manufacturer in rather than bring it back to Britian.


I am saying that the 15% increase in price competitiveness will allow for more space for price increase (potentially 15%) on the final product price (which is the value added price). This will exceed the 15% increase in costs in absolute term, as the cost is the much smaller number.

My point has nothing to do with which country the models are manufactured in. If we are talking about manufacturing then I think GBP's value has little to do with the place of manufacturing, it is more of a minimum working standard issue (the Chinese are willing to accept much lower pay and much higher working hours, hence low cost).
Reply 8
Original post by CherishFreedom
I am saying that the 15% increase in price competitiveness will allow for more space for price increase (potentially 15%) on the final product price (which is the value added price). This will exceed the 15% increase in costs in absolute term, as the cost is the much smaller number.

My point has nothing to do with which country the models are manufactured in. If we are talking about manufacturing then I think GBP's value has little to do with the place of manufacturing, it is more of a minimum working standard issue (the Chinese are willing to accept much lower pay and much higher working hours, hence low cost).


I am skeptical that there will be significant repatriation of manufacturing since it take time to establish manufacturing facilities and no-one knows what the trading conditions will be like when products start to roll off the production line.
Reply 9
Once again the Establishment blaming everything on brexit to make people feel guilty about the vote, sorry globalists you lost get the fk over it.
Original post by Maker
I am skeptical that there will be significant repatriation of manufacturing since it take time to establish manufacturing facilities and no-one knows what the trading conditions will be like when products start to roll off the production line.


Nobody is expecting manufacturing to be based back in the UK from China, the BBC article did not raise this issue as there is no issue to raise in terms of place of manufacturing for the model train industry.

We are talking about a factor of 10:1 in terms of wage level between the UK and China. 15% drop in GBP will not make anybody consider moving their manufacturing from China to UK. As I said, this is more of a working standard issue, not exchange rate.

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