"NEW YORK (CNN/Money) - In a move that could trim the trade gap with the United States, China revalued its currency higher against the dollar Thursday and said it would no longer have the yuan tied to a fixed rate against the U.S. currency.
The move, while small at this point, could be the first step to reduce competition for some U.S. companies from lower-priced Chinese imports. A stronger yuan could also increase the revenue U.S. exporters get from sales to the world’s largest country, one of the fastest growing consumer markets.
It also reduces the threat that Congress could impose threatened trade sanctions on China.
On the downside for American citizens, it could lead to increased prices for Chinese-made goods such as apparel and electronics. "
Currency exchanges are set by the market. Any fluctuation is impossible for a government to control. I studied foreign currencies as part of my MBA in Marketing and International Business at the U. of Chicago. The concensus was to bet against any government shoring up its currency as there has never been a succesful effort at doing this. It will fluctuate. Smart companies take out an insurance poicy in the form of futures at the current exchange rate. They are very cheap. If it goes in their favor they throw it away. If it goes against them they cash it in. problem solved.
We have no manufacturing in this country for goods in other fields. Our economy is based on inflated real estate and fast food sales. Where will this manufacturing of model RR equipment come from? All the equipment and technology has been shipped to China.
Perhaps this is the way it is in your country, but here in the U.S. manufacturers can produce just about anything they want at, any time, if there is enough money in it for them. It all boils down to the money.
One of the more important aspects of the higher priced Chinese goods will be price increases at your local WalMart. According to recent news reports, WalMart imports about 80% of the goods it sells directly from China. This is good news for U.S manufacturers as it makes their goods more competitive in U.S. markets.
The price increases for Chinese goods may not be significant enough to cause model railroad product manufacturers to take any action. Only time will tell.
Could be interesting to watch. Of course who knows how long it will take for any of this to affect the prices we see. I would think it would depend at least partly on how long existing contracts are in place for and whether or not the contract calls for dollars or yuan. So my expert conclusion is that prices can go up, or down or stay the same.
The problem for the modeling community is not that Chinese product will be more expensive, but rather that the quality of the Afgan, Palestinian, Iracquie, or what ever the next “cheap” labor location may be! One of the astronaughts commented on one of the space capsules to the effect that it had gone to the “lowest bidder”. Luckily the market place continues to weed out the “cheap junk” from those who don’t know how to inspect what we expect!
When I worked in the electronics field a number of years ago the sourcing of one of our meters was moved to China at the time of the civil unrest and Tienemen Square up risings ( the reason for the move was the civil unrest at the South Korean facility - frying pan into the fire?!) Political “re-education” meetings in the plant played havoc with both training and production for over a year. For our part in the debacle, we let the meters get out in the field without proper inspection and concequently high failure rates.
Let us beware of the “low cost labor” syndrome! Cheap is cheap!
Will
While I would like to see much more stuff manufactuered in the USA, there is a significant amount of model railroading stuff made here.
Accurail
A-Line
Athearn Blue Box
Bowser
Branchline Trains
Cannon & Company (?)
some Con-Cor
Detail Associates
Details West
Digitrax
Eel River Models
Evergreen Scale Models
Floquil
McHenry
Microscale
Pikestuff/Rix Products
Plano
Testors (paints)
Williams Brothers (?)
Of course we can expect higher prices. And it really doesn’t have as much to do with China’s currency valuation as it does with the cost of oil. And when, I might ask, was the last time we saw an across-the-board decrease in the price of model trains?
Yep, there was an item in Friday’s newspaper (22 July) that Chinese manufactured sneakers, jeans, and other products at Wal-mart and K-mart will definitely be going up in price.
What’s really sick about all this is that they will raise prices on items that are already in stock or are on ships bound for the U.S. that were made long before the Chinese government changed their monetary policy. Just like the price of gasoline goes up on stocks that are already in the underground tanks at gas stations every time there is a spike in crude prices.
All they have done so far is revalued it 2%. This is not significant. Your 100$ loco now costs $102. If the manufacturer gets a little more efficient he won’t even have to raise the price. The unknown is how much and how fast the Chinese gov’t will let it move in the future, if at all. But as history has shown with Japan, then Korea, the prices will eventually go up. That’s actually a good thing because it means the Chinese standard of living will go up and our goods become less expensive for them.
Enjoy
Paul
Yep, higher prices are on the way. This is called “free enterprise, supply and demand, etc.”. I have a hard time blaming the yen or any other foreign currency for high prices though. We need to take a look at ourselves for the cost of things. Manufacturers will charge as much as the consumer is willing to pay. We as consumers set the price of things in the end. I know manufacturers need a profit, I know the seller needs a profit, and I have no problem with it, but as long as we are willing to pay, they are willing to charge. Think about it is all I ask. Thanks, Ken
The real reason for the skyrocketing prices is the decreace in actual model building. Yes most sructures still come in kit form. But let’t honestly assess here. When was the last time a major new rollingstock or locomotive product was in Kit form? The only one that comes to mind is Branchline trains. You may be saying Hey now wait a minute James, those branchline sleepers are $80.00 a crack. That may be true. But the fact that they have everything, right down to the flush handles on the toilets and Paper on the rolls contribute to that price becuase of all the extra tooling thats required vs what would be found if it were made more like a classic Athearn Pullman. I estimate that if you had to buy those sleepers ready to run, they would easily be $200.00
To further illistrate my point, lets compare apples with apples.
For many years, Athearn and Accurail made kits of very similar products. I. E. 40 and 50 Foot box cars. Hoppers Covered Hoppers. Reffers. Flat cars and the like with comparitvely simliar detail level and skill level. For the longest time the pricing on those items between the two companies has remaind somewhat similar in the 5 to 10 Dollar range. It seems now that Horizon has abandoned kits altogether the same kit that cost $7.50 now cost 19.95. Just because as a market it seems we would rather pay Jose at the Athearn factory to put our car together than do it ourselvs. Accurail which for the most part has stayed with kits. (And appear committed to them with their RTR being somewhat a fringe affair) have stayed at the $5.00 to $10.00 range. I have every walthers catalog bact to 1995. In it I have seen that while Accurail has steadily raised prices. Those prices have remained constant with inflation, rather than a concession to greed.
I feel of we can organise an effective boycott against ready to run locomotives and rollingstock, (Which every RTR piece I have ever bought have been completely unsatisfactory) and demand kits, that we can once again enjoy their
Demand has shown that, for better or worse, many folk WANT RTR.
(and DCC, and sound, and better detail/paint)
It’s not going away.
Nor do I want it to. The hobby will not survive if we tried to re-establshed the older, poorly detailed/painted/non-DCC/non-sound models of yesteryear. It wouldn’t be “flashy” enough to attact new folk into the hobby, IMHO.
Even the new Atlas Trainman line doesn’t go that far (in either quality or price).
If you think ALL RTR is unsat, you must not have any of the newer Atlas models - those are superb (and worth every penny). To super-detail a loco or rolling stock to that level would cost you more money in parts (fact: I can send you the parts list needed to detail an Athearn BB GP38-2 to Rock Island standards - it makes the model as expensive as the P2K. That’s why I only have one Athearn BB and two P2Ks !!!).
But as almost ALL of these high quality locos and rolling stock models are currently being made in China, they will be going up in price. So will the Trainman line.
Just a little now, but in the long run they may exceed what I think the detailed RTRs are worth. [:(]
Lucky for me, I already have almost all the locos and rolling stock I need.
But beyond MRRing, I worry about the economic survival of a country that has less and less production.
Maytag (and the Rock Island trademarks) may soon be bought by China. They have plently of our money to buy it !!! When American production capability is either overseas or owned by foreign countries, we may be in big trouble …
AgainI ask, show us your facts and figures that indicate this. The only thing we have apparent is that the manufacturers are targeting the hobbyists with deep pockets, at the expense of the average modeler. The very fact that there are extremely limited runs of items demonstrates that sales are being aimed at only a very small fraction of the 250,000-500,000 modelers that currently exist.
The hobby would survive much better and far longer if it returned to more reasonable pricing and, at least in part, brought back good kits. The tiny fraction of persons that are being drawn into the hobby because they think high-end items are “flashy” are too few to be meaningful in any way. On the other hand, the high current MSRPs are driving many persons out of the hobby or away from even considering it. If the hobby is to continue even for the next decade or two, the way the marketing of products is handled must change or model railroading will very shortly go the way of collectible brass.
Mine is based on talking (in person or in forum) with new members (and older members) of the hobby.
Just read thru any thread about getting into DCC, or waiting for, pre-ordering, or getting one of the new models !!!
If the hobby fails, it will be because folk looking at it think its BORING, not because of the CURRENT prices - you must be out of touch as to the $$$$ many people spend on hobbies, now-a-days. My concern is a future DRASTIC increase in ALL China imports (both MRR stuff and other consumer goods).
Going back to the old Athean BBs (looked at the prices on THEM lately ??) as the best the hobby has to offer is the best way to kill the hobby forever, IMHO. While some lower price brands are needed for some newbees, more advanced models will always be needed to have excitement in the hobby.
The other way for the hobby to fail is for folk to have no experience with the RRs other than at road crossings. If (when?) AMTRAK ends long-distance runs, watch for a drop in the hobby after a few years.