I have just been asked to explain the 19% increase in the price of a KTM Macina Sport CX5+ from 2016 - 2017, by a member of the public.
I thought some of you might like to see the reply.
"There are some tiny differences in the spec, for instance the brakes are the new M8000 series XT ones, so there is a small amount of adjustment there.
The new frames do cost a bit more, there is a lot of work that goes into the new shape, so that does account for some of the increase.
However there is a large increase because of the exchange rate risks.
Back in June 2015 when the 2016 price was set, we were looking at converting the € price to £s on an exchange rate of £1.00 = €1.39
We delayed and delayed issuing the 2017 prices last summer, but it had already dropped to €1.20 to the £
It was also predicted to get worse, which has proven to be the case, the price is set for 12 months, so we had to plan in a safety margin.
So that's pretty much a 14% increase at cost price, just moving the bike into the UK.
In addition the € dropped quite a bit against the $ and the swiss frank where KTM buy a lot of their component parts from, so that meant KTM's cost price also went up.
So, yes the £700 increase is just over 19%... so actually I'm afraid less than it should be.
We've halved our margin on eBikes to allow us to keep the RRP from going up any more this season.
God only knows what will happen to the RRPs in 2018 if we trigger A50 and leave the single market as is currently planned.
The only saving grace for us is that we are not alone, pretty much everything in cycling is imported, so the price rises are effecting EVERYTHING.
Also, you've got to factor in the fact that all our business costs have gone up, fuel, couriers basically everything FLi pays out has gone up because of the decrease in the value of the £. So not only have we halved our margin to keep the price low, we've also found our expenses have gone up. So I think more price rises will be fed into the system at some point.
Its not good, we're making less money, working harder and you, the end consumer ends up paying a lot more for the same thing."