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Car dealers: Dollar rate and car price - what gives?
ulemsee
#1 Posted : Monday, August 24, 2020 1:03:26 PM
Rank: New-farer


Joined: 4/14/2014
Posts: 60
Location: Nairoville
The USD has been performing dismally lately. This comes at a time when I have just decided to start shipping in cars for resale locally. I notice however, that the current rate has significantly reduced profits and I am wondering whether car prices are likely to shoot up in the coming month or whether market forces will keep car prices the same, resulting in reduced profits for car sellers.

For purposes of demonstration, A probox going for $4,000 should earn me about 48k profit when bought at a rate of 110.75 (banks have to eat too). The same Probox at the same price, would earn me 71k when bought at a rate of 105 to the USD, all other factors remaining constant.

So, are car sellers likely to transfer the increased cost of the dollar to buyers ama soko imaheribika sasa?
Some people see the glass half full. Others see it half empty.
I see a glass that's twice as big as it needs to be.
― George Carlin
NewMoney
#2 Posted : Tuesday, August 25, 2020 4:53:18 AM
Rank: Member


Joined: 3/1/2019
Posts: 159
Location: Nairobi
ulemsee wrote:
The USD has been performing dismally lately. This comes at a time when I have just decided to start shipping in cars for resale locally. I notice however, that the current rate has significantly reduced profits and I am wondering whether car prices are likely to shoot up in the coming month or whether market forces will keep car prices the same, resulting in reduced profits for car sellers.

For purposes of demonstration, A probox going for $4,000 should earn me about 48k profit when bought at a rate of 110.75 (banks have to eat too). The same Probox at the same price, would earn me 71k when bought at a rate of 105 to the USD, all other factors remaining constant.

So, are car sellers likely to transfer the increased cost of the dollar to buyers ama soko imaheribika sasa?


The price will definitely start to go up in the next few months as old stock is cleared.

Also, if you are going to be buying a lot of dollars then you need to get a bank that will enable you to get favourable rates. e.g today at stanchart you can buy USD for 108.6 and sell at 107.5, very favourable rates if you ask me
ulemsee
#3 Posted : Tuesday, August 25, 2020 7:21:30 PM
Rank: New-farer


Joined: 4/14/2014
Posts: 60
Location: Nairoville
Oh yes, I noticed that Absa is greedy. Stanchart has more reasonable rates.

It'd be a good thing if prices go up - at least my fears of making a marginal profit will be addressed then.
Some people see the glass half full. Others see it half empty.
I see a glass that's twice as big as it needs to be.
― George Carlin
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