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thetunersgroup
10-10-08, 10:20 PM
Hi All,

We've been watching the AUD vs Japanese Yen and AUD vs USD exchange rates pretty closely the last few weeks, and of course the drop in the Aussie dollar is having a huge affect on the prices that parts companies pay for parts from overseas manufacturers, which of course has a flow on effect for retail prices.

Our policy on pricing remains the same - we sell all our Works Bell, AEM and Forced Ignition products at or below the prices they sell for in the countries where those manufacturers are based.

We had a look around tonight at a few competitors sites overseas, and as far as we could see we still have the lowest prices on the Works Bell Rapfix II Quick Release of any retailer worldwide.


AUSSIE DOLLAR GRAPHS

But when you look at the exchange rate, the aussie dollar is not doing well.

Here is a graph of the Aussie dollar vs the Japanese Yen over the last 30 days ...

http://www.tunersgroup.com/images/gallery/gallery506.jpg

That graph shows how much an Australian dollar is worth against the Japanese Yen.

The opposite graph to that one is the graph of exchanging Yen for Australian dollars over the last 3 months ...

http://www.tunersgroup.com/images/gallery/gallery504.jpg

So if you are an Australian company, that graph shows how much more it costs to buy your products from Japanese manufacturers than it did 3 months ago.

The US dollar situation is very similar.

Here is the graph of how much an Australian dollar is worth against the US dollar ...

http://www.tunersgroup.com/images/gallery/gallery507.jpg

And then the opposite graph to that one is the graph of exchanging US Dollars for Australian dollars over the last 3 months ...

http://www.tunersgroup.com/images/gallery/gallery505.jpg

So if you are an Australian company, that graph shows how much more it costs to buy your products from US manufacturers than it did 3 months ago.


WHO'S TO BLAME FOR THIS ?

I'm pretty appalled by the slide in the Aussie dollar, but if you notice an increase in the price of all the parts we love to fit to our cars, don't think that Australian retailers are trying to gouge you on price - they're not.

Retail prices will simply increase in proportion with the change in exchange rates, because it costs retailers and importers more to buy those parts.

So for example, if an importer buys a product from a company in Japan that costs 10,000 Japanese yen from the manufacturer in Japan, then on July 22 that JPY 10,000 product cost Australian $95. On today's exchange rate, that JPY 10,000 product costs Australian $153.

The Australian government will try to tell everyone that this is because of "financial turmoil", but I don't buy that argument. Here's why ...


A QUICK HISTORY LESSON

For many years, Australian governments (from both parties) have had the attitude that the Australian innovation & manufacturing sectors were of no value.

John Howard famously said that Australia was better off importing everything from other countries.

So when Australian manufacturing businesses started to struggle, the Australian government did sweet FA about it.

As an automotive example, Australian companies used to be able to buy some of the finest stainless steel mandrel bends in the world and they were made by BHP in Newcastle, right here in Australia, so they were cheap. I remember the days of Australian mandrel bends and just laughing at how cheap they were.

http://www.andersonstainless.com/Mandrel%20Bends%2090%20Degree.jpg

A few years ago the BHP factory in Newcastle that made stainless mandrel bends closed.

The government didn't seem to care, and the "wisdom" was that Australia would just sell the raw materials to overseas companies who would make mandrel bends, which Australia would then import.

This is the whole ridiculous policy of basing our entire economy on selling things that we dig out of the ground. Before mining powered the Australian economy, it was wool. That's the origin of the saying "Australia was built on the sheep's back".

When wool prices crashed, Australia took a big hit - because all we had to fall back on was mining.

And the biggest reason that we don't have a ton of other industries is because the government has done sweet FA for years and years to encourage innovation in Australia.

And this is not a political statement against one party - following years of neglect and indifference to the manufacturing and innovation sectors by the Howard government, one of the first things the Rudd government did was to abolish a scheme that allowed innovative companies to quickly claim back research and innovation related costs.

What did they replace it with ? It has been replaced with a "study group" that will look at whether a similar scheme should replace it. In the meantime, Australian innovators are hung out to dry.


BY CONTRAST

By contrast, governments in countries like Ireland saw the digital age coming, and did everything they could to encourage innovative companies to base themselves in Ireland.

I lived in Ireland for a few years and saw it first hand - the entire place was buzzing.

Which country is the largest producer of software in the world ? It's not the US, and it's not India - it's Ireland.

And most importantly, Ireland's software industry can help cushion it from financial woes whereas Australia doesn't have a large software industry or any other large scale innovation industry that can help cushion us from drops in demand for raw materials. Australia digs stuff out of the ground - that's what we do.


BACK TO AUSTRALIA

The bottom line is that there is simply no incentive for companies to innovate in Australia, and no incentive for innovative companies overseas to move here and do their research and innovation in Australia.

Instead many Australian companies move overseas to countries where their innovation is supported.

We live in a digital age where information and innovation are king. Australia is stuck in the stone age in many ways, digging rocks out of the ground.

And the whole problem with basing your economy around digging stuff out of the ground, and neglecting research and innovation, is that if the people overseas suddenly decide they don't need as much of the stuff you dig out of the ground, then you don't have other industries which can make up the slack.

All we end up with are band aid solutions from our government.

And higher parts prices.

- Adam

DISCLAIMER: This information is not intended to be, and does not constitute, financial advice of any kind. The information contained in this post is informational only in nature, is provided for information purposes only, and should not be relied upon when making investment decisions. No liability is accepted of any kind.

A'PEXi
10-10-08, 11:16 PM
was wondering why RSA was based in ireland lol :P

Andy Wana
10-10-08, 11:40 PM
Adam, you hit the nail squarely on the head. Very true indeed.

rodent
11-10-08, 02:09 AM
Hrmmm you're kinda drawing a long bow to directly correlate the value of our dollar to our focus on commodities. I do see where you're coming from - the fact that our reliance on resource production and not much else leaves us at the mercy of the resource market and fluctuations. However that's probably one of the safest industries to depend on - there will always be a demand for steel and iron and coal and all that stuff we're good at producing. Just look at how stable the gold prices have been throughout all of this.

I daresay it is even more stable than being reliant on software production but I'd have to check the numbers to confirm.

What would affect the value of the AUD even greater is our fiscal policy - interest rates and stuff. My very simplistic year 12 economic logic is as follows - the higher our interest rates and the more confident we are in our economy, the more overseas investors are keen to leave their money with us, and that means the more AUD they'd be buying pushing its value up. Drop our rates like the RBA has done recently, and they lose confidence in our economy, sell their AUD and send its value down.

Being as small as we are we'd be amongst the first to feel it, but I think there's a few countries running on hopes and dreams at the moment and it's only a matter of time before they are hit too. Look at Iceland!

(The views expressed in this post may or may not reflect actual economic theory or reality :P)

mr33gts4
11-10-08, 03:13 AM
guys, you do realize the most efficient way to purchase at the moment is through the Australian market. The more money which leaks the economy, the lower the exchange rate is going to be and the more we will be paying for everything in the future!

So do the right thing, and support the industry which we all love =D

Cheers

jeffske
11-10-08, 11:40 AM
but what's reason for the dollar dropping so steeply? i was told that there is no real reason and that's why economists are scratching their heads...
i think when the rba cut interest rates the dollar tanked

thetunersgroup
11-10-08, 11:54 AM
guys, you do realize the most efficient way to purchase at the moment is through the Australian market. The more money which leaks the economy, the lower the exchange rate is going to be and the more we will be paying for everything in the future!

So do the right thing, and support the industry which we all love =D

Cheers

Yep, like I said above ...


Our policy on pricing remains the same - we sell all our Works Bell, AEM and Forced Ignition products at or below the prices they sell for in the countries where those manufacturers are based.

We had a look around tonight at a few competitors sites overseas, and as far as we could see we still have the lowest prices on the Works Bell Rapfix II Quick Release of any retailer worldwide.

So what we are doing is keeping exactly the same pricing policy we always have, and continuing to provide outstanding value to our customers on all the premium quality parts we sell.

I founded our company in 1999, 9 years ago, so we've been through big currency moves before, like when the Aussie dollar crashed in late '99/2000. Unlike many other parts companies, we keep a very close eye on exchange rates and have many years experience of how to deal with such conditions, so though currencies are fluctuating, it's business as usual here.

- Adam

thetunersgroup
11-10-08, 12:29 PM
I do see where you're coming from - the fact that our reliance on resource production and not much else leaves us at the mercy of the resource market and fluctuations.

Exactly.


However that's probably one of the safest industries to depend on - there will always be a demand for steel and iron and coal and all that stuff we're good at producing. Just look at how stable the gold prices have been throughout all of this.

Other metal prices have been hammered though ...

http://cmd-chart.blogspot.com/2006/05/gfms-base-metal-index-waves-analysis.html
reads ...

"GFMS base metal index is based on the official London Metal Exchange - LME - cash settlement price for primary aluminium, copper, lead, nickel, tin and zinc. The index is an average of the six prices with equal weighting given to each of the six metals. The index is based on January 4th 2000 = 100."

Here is a 6 month chart of the GFMS base metal index from http://www.kitcometals.com/charts/gfms_historical_large.html ...

http://www.weblinks247.com/indexes/gfms-6m-Large.gif

and here is a 12 month chart ...

http://www.weblinks247.com/indexes/gfms-1y-Large.gif

So much of our economy is based on digging stuff out of the ground, that when places like China decide they don't need as many resources, it can have a big effect in Australia ...

See http://business.smh.com.au/business/bhp-rio-face-drop-in-iron-ore-sales-20081010-4xzz.html

And when there is less demand for the Australian dollar, the price of the Aussie dollar drops.

I agree that there will always be demand for iron ore, coal etc, but the question is "how much demand ?" ...

And when so much of the Australian economy is built around one industry, it's a "putting all your eggs in one basket" scenario.


What would affect the value of the AUD even greater is our fiscal policy - interest rates and stuff. My very simplistic year 12 economic logic is as follows - the higher our interest rates and the more confident we are in our economy, the more overseas investors are keen to leave their money with us, and that means the more AUD they'd be buying pushing its value up. Drop our rates like the RBA has done recently, and they lose confidence in our economy, sell their AUD and send its value down.

Sure - interest rates always play a role, but my point is simply that each industry is like a pillar holding up a country, like the pillars on a building.

And Australia simply doesn't have enough pillars ... instead we rely on one big pillar - mining, a second pillar which is primary production of wheat, grain, meat exports etc, and a third pillar which is tourism.

So when the rest of the world looks at Australia, they say "hmmm ... so Australia relies on mining which is affected by decreased demand in China & India, and farming which is affected by the drought", and they draw their conclusions about us based on that.

What is important is what can pull Australia out of trouble - and with dropping demand for "stuff we dig out of the ground", mining can't do that job for Australia at the moment.

If we had a larger part of our economy based on innovation and high end, highly specialised manufacturing, those industries could take up the slack. We have plenty of smart people in Australia who could run such industries and companies, but many of them are working overseas instead.

And the end result of that is that instead of Australian inventions and innovations staying in Australia and Australia reaping the financial benefits of such innovations, the profits end up overseas ... and we have to buy those products from overseas. So instead of being exporters of such products, we end up as importers of such products.

BY contrast, the US still has many industries which can pull the US economy out of trouble long term, but IMHO the US industries that will do that won't be the US mining industry - it'll be their modern, innovative industries.


(The views expressed in this post may or may not reflect actual economic theory or reality :P)

Ditto haha :)

DISCLAIMER: This information is not intended to be, and does not constitute, financial advice of any kind. The information contained in this post is informational only in nature, is provided for information purposes only, and should not be relied upon when making investment decisions. No liability is accepted of any kind.

- Adam

thetunersgroup
11-10-08, 12:44 PM
Adam, you hit the nail squarely on the head. Very true indeed.

Cheers Andy :)

- Adam

thetunersgroup
11-10-08, 12:55 PM
was wondering why RSA was based in ireland lol :P

So are a ton of other software companies. Apple Europe is based in Ireland too. I bought an upgrade for Mac OS X a while ago from a shop in Sydney - on the box it says "Made in Ireland" and the manual says "Printed in Ireland".

The Irish government was really smart about they set it all up. Instead of getting all these companies to move to Dublin (Ireland's capital city), instead they used a series of regional development boards, and got the big overseas companies to set up shop in regional towns and built business parks all over the countryside.

Where I lived in regional Ireland, we had the Dell European factory & headquarters just down the road and were surrounded by a ton of huge software and innovation companies.

Of course this also meant that people who lived in regional towns in Ireland could get solid jobs with these companies, so it virtually eliminated unemployment, and ensured that the benefits of the "Celtic Tiger" boom were shared across the whole country, instead of only benefitting people in Dublin.

There was a huge billboard in Limerick which advertised for people to work for Dell - demand was so high for staff that Dell had to advertise for staff on roadside billboards.

- Adam

Frogger
11-10-08, 09:17 PM
If there is enough demand for a locally produced good, there is no reason why it needs to be 'propped up' by the government. I don't understand why the mandrel bending BHP factory would have had to close if it saw this level of demand.

At the end of the day, Australia is a small market. Look at Mitsubishi's local plant that recently shut up shop. I honestly can't see why an overseas company would invest so heavily in tooling here so they can turn over something in such insignificant volumes. And we're far from being a geographical hub for exports.

The final nail in the coffin for the Australian manufacturing industry may come in the form of the carbon emissions tax.

thetunersgroup
11-10-08, 09:59 PM
If there is enough demand for a locally produced good, there is no reason why it needs to be 'propped up' by the government. I don't understand why the mandrel bending BHP factory would have had to close if it saw this level of demand.

At the end of the day, Australia is a small market. Look at Mitsubishi's local plant that recently shut up shop. I honestly can't see why an overseas company would invest so heavily in tooling here so they can turn over something in such insignificant volumes. And we're far from being a geographical hub for exports.

The final nail in the coffin for the Australian manufacturing industry may come in the form of the carbon emissions tax.

Yep I agree with you.

Innovative companies simply get a better deal from governments overseas. They pay lower taxes in countries like Ireland, and in many countries the governments give grants and interest free loans, and / or land for factories.

Those countries know that long term they will reap the benefits in taxes, employment levels, and a general boost to their economy.

Unfortunately in Australia "long term vision" by government normally means "until the next election". They simply focus on getting re-elected and nothing more.

In terms of the mandrel bend factory in Newcastle, no doubt local labour costs was a lot to do with it, but the end result is that we now just export the raw materials overseas, and then have to import all our stainless mandrel bends.

And now that the Aussie dollar is in bad shape, we have to pay even more for those imported stainless mandrel bends than we did before.

If they were still made in Australia, then with a low aussie dollar we'd have massive demand for them to be exported all over the world - that's the real tragedy in this.

- Adam

scathing
11-10-08, 10:24 PM
I've heard the same things, over and over again. A lot of the stuff we develop, whether its private or through the CSIRO etc, ends up going overseas because the Australian government couldn't give a rat's arse.

Did you know that Australia helped develop the first electronic computer? CSIRAC (http://www.abc.net.au/quantum/stories/s59607.htm) was the fourth computer (as we now know them) in the world, and the guys who developed it were at the forefront of their fledgeling industry.

However, for political reasons (Alan Turing, the man credited with coming up with the idea of a computer, was British) the first operational computer was turned on in Britain but it wouldn't have been possible without the input of Australians.

Fair enough no-one back then knew how integral computers would be to...well...everything today but do you know what the Australian government did about it? They basically just gave it all to the British and Americans. Like Adam said, the attitude was that we should let the "motherland" deal with something so sophisticated, and we should stick to primary industries like standing around in paddocks or digging holes in the ground.

Mr Happ
12-10-08, 02:17 PM
Lots of simplistic analysis here.

On Ireland and its robust economy (first EU nation to go into recession) :

http://www.independent.co.uk/news/business/news/ireland-enters-.htmlssion-942831.html

of course Ireland went down this path - because they have bugger all other options.

On Oz :

Services make up 72% of the Australian GDP. Mining and Agriculture is about 10%.

The investment fund asset pool is circa 900 Billion - the 4th largest in the world.

Its a question of how best to employ Australias human resources, and at the moment i think the mix is fairly right.

PS. the discussion on this mandrel bend factory is plain silly. How would its export program have been doing in the years above $0.90?? shit house. The mining sector is always looking for more people, and these ex factory workers would be far better off - as would the country be if they went to that sector.

There seems to be an opinion that we are just digging stuff out of the ground because its easy and we dont have any better ideas. Its a matter of playing the hand you get dealt, and we were quite lucky in that regard.

thetunersgroup
12-10-08, 11:57 PM
Lots of simplistic analysis here.

I like to keep things simple :)


On Ireland and its robust economy (first EU nation to go into recession) :

http://www.independent.co.uk/news/business/news/ireland-enters-.htmlssion-942831.html

of course Ireland went down this path - because they have bugger all other options.

And that's exactly my argument - it's all about not putting all your eggs in one basket. IMHO the wider the range of sources of income an economy has, the better equipped it is to handle hard times or a drop in prices or demand in one sector.

I merely mentioned Ireland as a country which used innovation to boost it's economy. I never said that Australia should become a software producer and kill off all our other industries.


On Oz :

Services make up 72% of the Australian GDP. Mining and Agriculture is about 10%.

Yeah but what I'm talking about is exports - things that bring new money into Australia from overseas, not money just circulating within our economy within Australia.

In terms of exported services, the only way that is sustainable is if they are high end, innovative services. Our labour costs are high in Australia, which is why so many of our service industries can be (and are being) outsourced to places like India where labour costs are lower.

Again though, the key whether you are talking about exported products or exported services is innovation - and Australian governments (both past and present), simply don't get it when it comes to the importance of innovation.


Its a question of how best to employ Australias human resources, and at the moment i think the mix is fairly right.

Well everyone's entitled to their own opinion :) My point is simply that if the Australian government fostered innovation like some other countries do, then productivity would soar, exports from Australia (both products and services) would soar, overseas customers would have to buy Australian dollars to buy our products and services, and that could only have a positive effect on the Australian dollar


PS. the discussion on this mandrel bend factory is plain silly. How would its export program have been doing in the years above $0.90?? shit house.

Yes, sales would have been lower when the Aussie dollar was strong, but currencies go both up and down, so what is important is the average dollar value, not it's extremes. That applies to every exported product on the planet.

But at the same time, if we still made those mandrel bends in Australia, we'd be selling a ton of them right now - right when we need export sales to help the Aussie dollar. Instead we have to import mandrel bends with a horrible exchange rate making them even more expensive.

Go and talk to any Australian companies who make headers or exhaust systems or anything else from stainless tubing (like staircase railings, architectural stainless bits, marine bits etc) and ask them how silly they think it is that instead of being able to buy mandrel bends locally, we now export the raw materials and have to buy bends that used to be made here from overseas - that's what's silly.

If you are an Australian company buying mandrel bends from Japan, a box of mandrel bends that cost you AU$95 from Japan in July will now cost you around $150.


The mining sector is always looking for more people, and these ex factory workers would be far better off - as would the country be if they went to that sector.

I don't agree with you at all there. That is just putting even more eggs into the one basket. By doing that even more Australians would rely on mining to make a living - and there would be even more people who's jobs would be at risk as raw materials prices drop, and countries like China say they want to delay shipments.


There seems to be an opinion that we are just digging stuff out of the ground because its easy and we dont have any better ideas. Its a matter of playing the hand you get dealt, and we were quite lucky in that regard.

Yes we are a lucky country, but IMHO we can't rely on mining as much as we do.

The issue isn't that Australians don't have any better ideas - we have a ton of smart innovative people in Australia - the problem is getting funding and government support to turn smart ideas into revenue.

As I wrote above ...


Posted by thetunersgroup

When wool prices crashed, Australia took a big hit - because all we had to fall back on was mining.

And the biggest reason that we don't have a ton of other industries is because the government has done sweet FA for years and years to encourage innovation in Australia.

And this is not a political statement against one party - following years of neglect and indifference to the manufacturing and innovation sectors by the Howard government, one of the first things the Rudd government did was to abolish a scheme that allowed innovative companies to quickly claim back research and innovation related costs.

What did they replace it with ? It has been replaced with a "study group" that will look at whether a similar scheme should replace it. In the meantime, Australian innovators are hung out to dry.

That situation is an absolute disgrace, and speaks volumes about the Australian government's attitude to Australian innovation.


IN CONCLUSION

At the end of the day, you and I obviously have different viewpoints, and there is nothing wrong with that - it encourages discussion and constructive argument.

My point is simply that neither Australia nor any other country can afford to sit back on it's laurels and rely on it's natural resources for jobs and income. We can't keep putting all our eggs in one basket.

We simply need to be smarter than that, and to develop new industries and innovate as much as we can.

- Adam

DISCLAIMER: This information is not intended to be, and does not constitute, financial advice of any kind. The information contained in this post is informational only in nature, is provided for information purposes only, and should not be relied upon when making investment decisions. No liability is accepted of any kind.

thetunersgroup
13-10-08, 12:03 AM
I've heard the same things, over and over again. A lot of the stuff we develop, whether its private or through the CSIRO etc, ends up going overseas because the Australian government couldn't give a rat's arse.

Did you know that Australia helped develop the first electronic computer? CSIRAC (http://www.abc.net.au/quantum/stories/s59607.htm) was the fourth computer (as we now know them) in the world, and the guys who developed it were at the forefront of their fledgeling industry.

However, for political reasons (Alan Turing, the man credited with coming up with the idea of a computer, was British) the first operational computer was turned on in Britain but it wouldn't have been possible without the input of Australians.

Fair enough no-one back then knew how integral computers would be to...well...everything today but do you know what the Australian government did about it? They basically just gave it all to the British and Americans. Like Adam said, the attitude was that we should let the "motherland" deal with something so sophisticated, and we should stick to primary industries like standing around in paddocks or digging holes in the ground.

Great post scathing !

- Adam

thetunersgroup
25-10-08, 09:36 PM
Here is a graph of the Aussie dollar vs the Japanese Yen over the last 30 days ...

http://www.tunersgroup.com/images/gallery/gallery506.jpg

That graph shows how much an Australian dollar is worth against the Japanese Yen.

The opposite graph to that one is the graph of exchanging Yen for Australian dollars over the last 3 months ...

http://www.tunersgroup.com/images/gallery/gallery504.jpg

So if you are an Australian company, that graph shows how much more it costs to buy your products from Japanese manufacturers than it did 3 months ago.

I'm pretty appalled by the slide in the Aussie dollar, but if you notice an increase in the price of all the parts we love to fit to our cars, don't think that Australian retailers are trying to gouge you on price - they're not.

Retail prices will simply increase in proportion with the change in exchange rates, because it costs retailers and importers more to buy those parts.

The Aussie Dollar got hammered against the Japanese Yen again this week ...

According to http://www.x-rates.com/d/JPY/AUD/data120.html here's the numbers of what 1 Aussie dollar was worth this week ...

2008-10-20 Monday, October 20 70.9024 JPY
2008-10-21 Tuesday, October 21 68.4231 JPY
2008-10-22 Wednesday, October 22 66.0625 JPY
2008-10-23 Thursday, October 23 64.9722 JPY
2008-10-24 Friday, October 24 58.3505 JPY

1 Australian Dollar is now worth 58.38 Japanese Yen !

That drop from Thursday's price to Friday's price is shocking !! It's a drop of 6.62 yen in just one day ! That's a drop of 10.1 % in one day !

Take a look at the 30 day graph (attached)

The 120 day graph is also attached.

And here is the graph of of exchanging Yen for Australian dollars over the last 3 months ...

http://www.x-rates.com/d/AUD/JPY/graph120.html

So if you are an Australian company, that graph shows how much more it costs to buy your products from Japanese manufacturers than it did 3 months ago.

- Adam

DISCLAIMER: This information is not intended to be, and does not constitute, financial advice of any kind. The information contained in this post is informational only in nature, is provided for information purposes only, and should not be relied upon when making investment decisions. No liability is accepted of any kind.

Sicarius123
25-10-08, 10:51 PM
guys, you do realize the most efficient way to purchase at the moment is through the Australian market. The more money which leaks the economy, the lower the exchange rate is going to be and the more we will be paying for everything in the future!

So do the right thing, and support the industry which we all love =D

Cheers
Do the right thing? When I purchased my T51R kit the "Australian HKS Distributor" BD4's wanted $7000 more than I paid, when I purchased my PWR radiator, an Australian product, PWR wanted $500 more than it was worth to get the product from America, I could get a product made in Queensland cheaper from Brisbane to Texas to Canberra than from Brisbane to Canberra.

I highly respect what Works Bell is doing in keeping their Australian pricing fair in a global economy, but most Australian distributors are not doing this, and in turn I feel zero obligation to support them. Besides the fact I don't have a bottomless wallet to do so.

philz
25-10-08, 11:13 PM
^ Too true

And some importers are bringing up their already in stock prices up!

ie/ I've been looking at a set of used SSR wheels which were priced $1500 ready to ship 4 months ago, they still haven't been sold but now they are priced at $1700... wtf?

thetunersgroup
26-10-08, 05:12 AM
I highly respect what Works Bell is doing in keeping their Australian pricing fair in a global economy, but most Australian distributors are not doing this ...

Hi Sicarius,

Thanks for your kind comments about our pricing on Works Bell products.

The Australian prices on Works Bell gear are set by us at The Tuners Group here in Sydney.

We calculate our Australian ex-tax retail prices for Works Bell gear by a very simple formula - they are the same as the retail prices that Works Bell's products retail for in Japan :)

In some cases and depending on exchange rates we are below Japanese retail prices.

We simply convert the Japanese Yen retail price in Japan into Australian dollars.

So when the Japanese Yen goes up in value, our Works Bell retail prices in Australia increase, but only by the percentage the Yen increases by. Our Australian retail prices are still the same as Japanese retail.


WHY I GOT INTO THE PARTS BUSINESS

After building my first two project cars, I got sick and tired of being gouged by some Australian distributors on price for parts I wanted to buy for my own cars.

So in the mid 90's I started importing parts for my own cars to avoid some truly huge markups by some Australian distributors (back then a lot of parts were retail priced in Australia at DOUBLE or more the price they retailed for overseas).

Back then there was not really much of an internet at all, so it was hard work and involved a lot of faxes, phone calls and research.

I then got on a plane, went overseas, and just tracked down manufacturers of various parts which I wanted to import. A number of manufacturers in the US were quite shocked at the markups in Australia.

Friends saw the parts I was able to track down, so the experience I gained in importing parts for my own cars and helping friends find parts overseas led to me setting up our company.

My first trip to the SEMA show in Las Vegas was in '99 (back when not many people in Australia had even heard of the SEMA show). I first met the guys from HRE Wheels in '99. And my experience of importing then led to retail sales by The Tuners Group.

We were one of the VERY first to import carbon fibre bodywork into Australia - at the time most people had never seen carbon fibre car parts in the flesh, so as you can imagine, most people were just blown away by it. In the early and mid 90's carbon fibre parts were like some kind of alien technology haha ! There had never been anything that light and strong before. I remember in the US a demo where no one believed how strong carbon fibre was, so they would set up a carbon fibre panel and get people to throw a baseball at it and try to break it. People were amazed that it wouldn't dent or break.

At the end of the day, I simply don't believe that Australian customers should be forced to pay hugely higher prices for many automotive products than they retail for overseas.

So you will never see The Tuners Group selling imported products at hugely inflated prices in Australia - I didn't like being on the receiving end of hugely inflated Australian prices when I was a retail customer, so we simply won't do that to our customers.

- Adam

kousoku
27-10-08, 07:29 AM
Adam,

you sound like a complete crackpot. Mining is a large part of our export base, however, as stated earlier the resources only make up 10% of Australia's GDP, that is not a heavy reliance on a certain industry. Now to say that Australia's dollar has depreciated over the past 4 weeks because of a sustained long term inability to invest in innovation is a crock of shit.

Which investors do you think woke up one morning having ignored what is a BS fact anyway, and then decided to have a massive sell off of Australian dollars? None, is the correct answers because investors, unlike your argument and yourself are rational, and the reasons why we have experienced such a massive depreciation in the AUD against most if not all major currencies is because of the record rate drop by the RBA. This rate drop, once again was not caused by someone wrongly thinking about Australia's lack of innovation....


Australia, is at the forefront of innovation in the Minning/resource industry. We are world leaders in technology for this industry and we remain that way because of our natural endowments and because of our competitive advantage in this industry. -> Had Ireland, the example you use, had natural endowments similar to Australia do you think they would ignore the resource industry?

Andy Wana
27-10-08, 08:56 AM
Mate, if investors are rational ... we wouldn't have the recent panic attacks at the stockmarkets.
I do agree with you that the RBA interest cut had an impact on our dollar though.
Made it less attractive to foreign investors, thus the drop in value.

Adam is right to an extent too, Australia's economy needs to be more reliant on the local manufacturing/innovation scene too.
We may be leading in certain technologies, but we are almost hopeless when it comes to the local consumer goods.
How many of the stuffs you buy daily are actually designed/made in Australia?
What do we have to offer to the global scene? Ugg boots? Sheepskin rugs?

thetunersgroup
27-10-08, 10:27 AM
Adam,
you sound like a complete crackpot.


LOL.


Mining is a large part of our export base, however, as stated earlier the resources only make up 10% of Australia's GDP, that is not a heavy reliance on a certain industry.

The statistic I am getting at is not how much of Australia's GDP mining accounts for, but how much of our export earnings it represents.

Forget about money rolling around inside Australia for a second - what we're talking about here is exports.

I found this statistic at ...
http://www.nationsencyclopedia.com/economies/Asia-and-the-Pacific/Australia.html ...


Australia's mining sector is important to both Australia and the world. The mineral sector is the largest primary sector in the economy, accounting for 6.5 percent of the GDP but for more than 60 percent of export earnings.

With the greatest respect, having one single industry that accounts for 60 percent of a country's export earnings is absolutely a heavy reliance on one industry.

My argument is probably oversimplified, but if you actually add value and make something to export from the stuff you dig out of the ground, instead of just exporting the raw materials you dig out of the ground, you have stuff that is of greater value to export.

And you are then less reliant on the prices of the raw materials you dig out of the ground or the market prices of the goods produced by one particular industry.

Instead we dig up the relatively low value raw materials, send it overseas where companies overseas turn it into more valuable products like stainless steel mandrel bends as an example, then we buy that higher value product - the stainless steel mandrel bends - back from overseas, with money leaving Australia and flowing overseas to buy it.

And most importantly, we have to send more money overseas to buy those stainless steel mandrel bends than the amount we received for exporting the raw materials needed to make it.

And every time an Australian company needs to order for example some stainless steel (or any product which we have the know how to make in Australia but don't), the Australian company have to buy Japanese Yen or Chinese Yuan or Indian Rupee.

Australia used to make some of the finest quality stainless mandrel bends in the world at a factory in Newcastle (NSW). Now we have to import them - at MUCH higher prices than before because the Aussie peso is worth sweet FA.

I'm obviously a strong believer in innovation and high quality manufacturing, and IMHO Australia would be far better off if we actually made valuable products in Australia instead of shipping raw materials overseas and letting other countries get all the benefits and profits when we buy the higher value products (made from Australian raw materials) back from overseas.

Correct me if I'm wrong, but most of the world sees Australia as reliant on:

1. Stuff we dig out of the ground (also known as mining)
2. Stuff we grow or raise (aka farming)
3. Showing people around Australia (aka tourism) :)



Now to say that Australia's dollar has depreciated over the past 4 weeks because of a sustained long term inability to invest in innovation is a crock of shit.

What I mean is simply that if you have a wider range of exports, you have more industries that can help pull you out of trouble, instead of being at the mercy of things like commodity prices.

When you export more stuff, the overseas buyers of that stuff have to buy Australian dollars to buy your stuff (or you sell in another currency and then buy Aussie dollars yourself when you land the cash back in Australia), and people buying Australian dollars could only have a positive effect on the value of the Aussie dollar.



Which investors do you think woke up one morning having ignored what is a BS fact anyway, and then decided to have a massive sell off of Australian dollars? None, is the correct answers

http://money.ninemsn.com.au/article.aspx?id=653741 reads ...


Aussie dollar suffers biggest sell-off
27/10/2008 7:06:23 AM

The Australian dollar has suffered its biggest sell-off since it was floated in 1983.



None, is the correct answers because investors, unlike your argument and yourself are rational ...

I'm not rational ? ;) LOL

Investors are rational ?!

With the greatest respect, what we have seen in many markets the last few weeks has been driven by two factors - fear and panic. I wouldn't call either of those things signs of "investors" acting rationally.

The fact is that a lot of people ARE selling Australian dollars.

And there's no need to make this argument personal kousoku. While I may not agree with your arguments, can we please all at least have enough respect for other's opinions to argue constructively without reverting to personal insults ?



... and the reasons why we have experienced such a massive depreciation in the AUD against most if not all major currencies is because of the record rate drop by the RBA. This rate drop, once again was not caused by someone wrongly thinking about Australia's lack of innovation....

Yeah I realise that the rate drop has a lot to do with the recent exchange rate drop, but a lot of what I am saying has a much longer term view than that.

The fact remains that Australia has an absolutely disgraceful track record of investing in innovation, and the Australian government going back years and years has done NOTHING to encourage investment in innovation in Australia.

Every day millions of dollars flow out of Australia to buy things made overseas that we could easily produce ourselves in Australia, if only the government actualy did something to encourage investment in innovation in Australia.

As I wrote earlier in this thread ...


Posted by thetunersgroup

When wool prices crashed, Australia took a big hit - because all we had to fall back on was mining.

And the biggest reason that we don't have a ton of other industries is because the government has done sweet FA for years and years to encourage innovation in Australia.

And this is not a political statement against one party - following years of neglect and indifference to the manufacturing and innovation sectors by the Howard government, one of the first things the Rudd government did was to abolish a scheme that allowed innovative companies to quickly claim back research and innovation related costs.

What did they replace it with ? It has been replaced with a "study group" that will look at whether a similar scheme should replace it. In the meantime, Australian innovators are hung out to dry.

That situation is an absolute disgrace, and speaks volumes about the Australian government's attitude to Australian innovation.





Australia, is at the forefront of innovation in the Minning/resource industry. We are world leaders in technology for this industry and we remain that way because of our natural endowments and because of our competitive advantage in this industry.

Great, so we're experts in ONE industry.

My point is simply that Australia could simply be world leaders in many more industries. And IMHO, the more export pillars we have supporting our economy, the better our whole country (and our exchange rate) would be.

- Adam


DISCLAIMER: This information is not intended to be, and does not constitute, financial advice of any kind. The information contained in this post is informational only in nature, is provided for information purposes only, and should not be relied upon when making investment decisions. No liability is accepted of any kind.

Andy Wana
27-10-08, 10:59 AM
Correct me if I'm wrong, but most of the world sees Australia as reliant on:

1. Stuff we dig out of the ground (also known as mining)
2. Stuff we grow or raise (aka farming)
3. Showing people around Australia (aka tourism) :)



Little wonder people think of Australia as the land down under where Kangaroos and koalas are free to roam on the streets .. and where everyone dresses like Crocodile Dundee/ Steve Irwin.

Stalemete
27-10-08, 01:55 PM
Having personally worked for CSIRO, ive seen the Australian government throw away countless designs & research ideas that would have brought our economy hundreds of millions of dollars.
Laugh all you want, but budget cuts and internal restructuring strangle and kill countless ground breaking projects every year.

You know what happens to those that manage to get through that?
good example:
A portable remote operating theatre setup, including all the imaging, lighting & recording hardware for later training.
Basically allows a city doctor to liase & guide a nurse through operating on a rural patient.

This finished product was fully developed & being trialed in several hospitals around Australia with fantastically promising results.
It even gained enough notariety in the medical field that the state of California requested that 30 units be built & sent to them.

You know what we did?
Once the Australian government saw money they back flipped, for less than the price of a single unit the plans & all patents to the project were sold to a research firm in the US.

This happens to almost every suscessful idea produced by CSIRO.
Smile mindedness & greed.

Stalemete
27-10-08, 01:57 PM
sorry that was so long, but these people piss me off.

Andy Wana
27-10-08, 02:37 PM
sorry that was so long, but these people piss me off.

Nope. That was what some of the people here needed to hear.
Greed, short term thinking and a way to make a quick buck are rampant in Australia.
Cutting edge technology, innovativeness, design and engineering always take a backseat.

thetunersgroup
27-10-08, 04:22 PM
You know what we did?
Once the Australian government saw money they back flipped, for less than the price of a single unit the plans & all patents to the project were sold to a research firm in the US.

This happens to almost every suscessful idea produced by CSIRO.
Smile mindedness & greed.

Great post Stalemete !

I lived in Ireland for a few years and saw a lot of their regional development innovation programs working like clockwork.

They offer all kinds of incentives over there for approved innovation projects including in certain innovation programs:
- funding grants that do not need to be repaid
- a full suite of advisors at no cost
- cash to hire staff and fit out buildings
- additional loans if innovators need them, and
- tax rates of roughly 10% for innovative companies once they turn their innovations into money making companies.

This page details the typical activities of Irish regional development boards. Bear in mind that these are regional boards, typically in country areas, yet they are at the cutting edge of supporting true innovation ...

http://www.shannon-dev.ie/AboutUs/MainActivities-ABriefSummary/

Some highlights from that page ...


Shannon Free Zone

Shannon Free Zone is renowned as a competitive location for international manufacturing and traded services. Over the past number of years, an increasing number of international services companies have also found that its fiscal benefits have impacted positively on their cost-effectiveness.

The Zone, which is internationally recognised as one of the largest cluster locations of overseas investment in Ireland, offers a particularly attractive location from which to carry on manufacturing, traded services, international logistics and distribution, financial services and customer support activities. Highly competitive operating costs, top quality people and an attractive incentives package, combine to make Shannon one of the most compelling investment locations in Europe.

A new development at the Shannon Free Zone, Westpark Shannon, is a unique thirty-eight acre Business Park concept aimed at attracting and catering to the next generation of high technology, IT and knowledge-based businesses. Over the next ten years, this €200m investment will provide state-of-the-art accommodation extending to one million square feet for a broad variety of mobile investment projects including research and development and high quality technology operations. Westpark Shannon is a private sector company initiative in partnership with Shannon Development ...

Knowledge Networks

Shannon Development created the Shannon Development Knowledge Network which comprises five world-class technology locations, to support the development and growth of technology-driven enterprise in the Shannon Region. The parks in Limerick, Kerry, Tipperary, Birr and Ennis, the newest addition which is at development stage are state-of-the-art technology driven locations where businesses can avail of a wide range of assistance. All locations have close links with local third level colleges and offer a range of programmes and initiatives including mentoring, incubation space, networking opportunities and advice on business planning and funding.

InnovationWorks

Each location has an InnovationWorks facility which offers an integrated system for incubating and growing high-potential, indigenous companies. InnovationWorks provides new business with a range of support services, including direct high-speed fibre optic telecommunications, giving InnovationWorks companies rapid access to the global marketplace. InnovationWorks facilities are housed within smart buildings, individually designed around the needs of growing knowledge-age businesses. Clients have use of conference and meeting rooms as well as other resident business resources.

Property Development

Property Development mobilises Shannon Development's portfolio of industrial infrastructure and the network of local offices throughout the Shannon Region, securing new development initiatives through local action and the creative use of property assets ...

Key initiatives include the development of Kerry Technology Park in Tralee, Tipperary Technology Park in Thurles, Birr Technology Centre and the Information Age Park Ennis.

The use of Property assets facilitates the Company being mainly self-financing from a revenue and capital perspective.

You can read on at http://www.shannon-dev.ie/AboutUs/MainActivities-ABriefSummary/

It's a model Australia could learn a lot from if we stopped putting all our eggs in the mining, farming and tourism baskets.

- Adam