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Old 17.01.2015, 19:26
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Will the prices change? [after removal of CHF peg to Euro]

So will we see 20% price reductions in used/new cars or no?

Had a nice chat this morning with a car sales man, gotta love em, he was winking at me saying no way prices are going down, I said "fine, I'll buy in France and save -30%". Seeing his face felt good
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Old 17.01.2015, 21:20
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Will the prices change?

In light of the recent CHF craziness I am wondering, from those who have been here a while and gone through this kind of thing before, can we expect any price changes?
I guess food and general daily costs will remain the same?
But what of other items?
In particular I was thinking of updating my computer....Which involves stuff constructed overseas.
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Old 17.01.2015, 21:31
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Re: Will the prices change?

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In light of the recent CHF craziness I am wondering, from those who have been here a while and gone through this kind of thing before, can we expect any price changes?
I guess food and general daily costs will remain the same?
But what of other items?
In particular I was thinking of updating my computer....Which involves stuff constructed overseas.
Assuming the exchange rate remains similar to what it is, it'll probably take around 3 to 6 months before we see any real benefits from a consumer level, and then only for imported goods.

Currently shops are still holding stock that's been paid for at the old rates, so don't expect any overnight thing to happen.

The truth is that, even though we're on paper richer, the costs in the swiss market are unlikely to change that much, if at all. A beer that costs 7 chufs now is still likely to cost 7 chufs 6 months down the road.
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Old 17.01.2015, 22:00
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Re: Will the prices change?

One point to note is Swiss Euro Zone exporters are now earning 20 percent less. I am sure that this will have a severe impact on how Swiss imports are manufactured and originate. Entirely made in Switzerland is already not possible in many areas.
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Old 17.01.2015, 22:42
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In light of the recent CHF craziness I am wondering, from those who have been here a while and gone through this kind of thing before, can we expect any price changes?
I guess food and general daily costs will remain the same?
But what of other items?
In particular I was thinking of updating my computer....Which involves stuff constructed overseas.

YES, Prices got down by 10 to 25 percent overnight. I am shocked. I clearly under-estimated the chaps

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One point to note is Swiss Euro Zone exporters are now earning 20 percent less. I am sure that this will have a severe impact on how Swiss imports are manufactured and originate. Entirely made in Switzerland is already not possible in many areas.

Yes, indeed. This means that the Germans will have to feel the impact. Swiss Business will have to look for cheaper suppliers

Last edited by 3Wishes; 18.01.2015 at 01:49. Reason: merging successive posts
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Old 17.01.2015, 23:05
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Re: Will the prices change?

I'm still waiting for the good ol' days of two-and-half chuffies to buy a sov.


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YES, Prices got down by 10 to 25 percent overnight. I am shocked. I clearly under-estimated the chaps
Now you tell me ..... after I've bought new skis and boots and a tele - all for 850.
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Old 18.01.2015, 08:24
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Re: Will the prices change?

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One point to note is Swiss Euro Zone exporters are now earning 20 percent less. I am sure that this will have a severe impact on how Swiss imports are manufactured and originate. Entirely made in Switzerland is already not possible in many areas.
On the brright side, any raw materials they might use - if coming from abroad - will be cheaper.....
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Old 18.01.2015, 09:32
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Re: Will the prices change?

Hi,

I think the fastest drop in prices you will see in cars and fuels.
In terms of cars, with all those direct import companies around they will impact market immediately, and fuels also react fast as turn over is pretty fast.
Rest will take more time in my opinion.
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Old 18.01.2015, 09:59
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Re: Will the prices change?

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On the brright side, any raw materials they might use - if coming from abroad - will be cheaper.....
Not necessarily, importers rarely pass on to the Swiss consumer import price deceases because of cartelling which characterises large segments of the internal Swiss market.
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Old 18.01.2015, 10:21
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Re: Will the prices change?

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On the brright side, any raw materials they might use - if coming from abroad - will be cheaper.....
Raw materials wil have little impact as they have little impact on the price of finished goods here.

Labour, location and technology have far more impact. The raw materials in a Chf 50k watch for instance are negligable. The work involved in turing some lump of metal into a delicate, finely designed and engineered cog wheel that knows when it is 29 Feb once every 4 years, costs far more !

If it were a mass article, such as tyres for vehicles, then raw material cost control is the key to survival.
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Old 18.01.2015, 10:28
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Re: Will the prices change?

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Labour, location and technology have far more impact. The raw materials in a Chf 50k watch for instance are negligable. The work involved in turing some lump of metal into a delicate, finely designed and engineered cog wheel that knows when it is 29 Feb once every 4 years, costs far more !
Solid gold watches on the cheaper end like Rolex Oyster Perpetual will not change in price but simply represent a greater margin for the manufacturer locally. The key though is that Swiss watch makers will find it harder to compete abroad since they'll maintain their prices there too.
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Old 18.01.2015, 10:47
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Re: Will the prices change?

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Solid gold watches on the cheaper end like Rolex Oyster Perpetual will not change in price but simply represent a greater margin for the manufacturer locally. The key though is that Swiss watch makers will find it harder to compete abroad since they'll maintain their prices there too.
That's the price of the finished object; we were talking about raw material costs !

In CHF, the price will not change, it will change relative to other currencies.

As i already said raw material costs are negligable, so how does this increase the margin for the manufactuer ? It's not the gold in a watch that makes such a big diference, it's the work and skill to make it that costs
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Old 18.01.2015, 11:24
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Re: Will the prices change?

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Solid gold watches on the cheaper end like Rolex Oyster Perpetual will not change in price but simply represent a greater margin for the manufacturer locally. The key though is that Swiss watch makers will find it harder to compete abroad since they'll maintain their prices there too.
i suppose we will just have to sit back and 'Swatch the euro fail'.
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Old 18.01.2015, 11:48
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Re: Will the prices change?

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One point to note is Swiss Euro Zone exporters are now earning 20 percent less. I am sure that this will have a severe impact on how Swiss imports are manufactured and originate. Entirely made in Switzerland is already not possible in many areas.
That's a big assumption. Swiss product prices abroad will adjust up to a point, and obviously elasticities vary wildly. Consider also that goods are paid with 60-day invoices etc, so things do have a significant lag all around.


Also about the "stock" that domestic retailers keep. Let's say that you go to the Fust now and they have for sale a TV that's 500CHF here and 400EUR in DE. Now, they might paid with the previous rate when they stocked it, but their competition is up to a point the DE price as well. So if they don't adjust accordingly there are going to be people that will order from the EU. Taking an EU VAT out and adding the measly 8% of CH, with the 15% gain from the exchange rate is a very nice offering to the swiss consumer right now. So even domestic retailers dealing with imported stuff will need to take some losses or lose some marketshare. The good thing is they have the whole year to get them back, since prices falling down eventually will probably drive more people to the stores later.

Of course it's a double-edged knife the price-falling thing. On the one hand, people say that they will consume more because everything is suddenly cheaper. On the other hand people might start waiting it out more and more expecting prices going even lower in the future. And then the cornerstone of capitalism (consume now, because tomorrow it'll cost you more) is gone. And that's why deflation is a bad thing.



Anyway, this whole thing is way to complex. There are so many stages in supply and value chains, that predicting moves and timelines for consumers is very difficult. People don't even know what's going to happen in the forex rate. Just keep on living and stop panicking/overthinking everything. If someone has big purchases planned, and now they're cheaper go for it now. If not continue as normal. That's what I'm doing anyway...
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Old 18.01.2015, 12:15
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Re: Will the prices change?

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That's a big assumption. Swiss product prices abroad will adjust up to a point, and obviously elasticities vary wildly. Consider also that goods are paid with 60-day invoices etc, so things do have a significant lag all around.
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Not an assumption, it is happening now. Simple as that.
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Old 18.01.2015, 15:55
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Re: Will the prices change?

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Not necessarily, importers rarely pass on to the Swiss consumer import price deceases because of cartelling which characterises large segments of the internal Swiss market.



Much depends on the locations. Retailers in places like Basel and Schaffhausen are practically forced to reduce their prices, while retailers in places like Luzern and Bern and Glarus etc are not so much under pressure
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Old 19.01.2015, 09:22
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Re: Will the prices change?

Electronics might be quick to drop in price. I was eyeing a Dell PC monitor . Best price in CH was 322 CHF. Then it dropped 30 chuffs over last weekend.

But it's even cheaper if bought from amazon.de, even with shipping, customs and VAT.
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Old 19.01.2015, 12:07
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Re: Will the prices change?

Adjustments happening already.

I heard an ad in the radio today of a furniture house that said 15% rebate on all furniture imported from the Eurozone. This won't be the only one, and by that pressure all other furniture lower, including domestically produced stuff - this will take a bit longer, but happen it will.

Similar will happen across the board in big(ger) ticket items, particularly in cars and electronics. The reduction in new car prices will soon work its way down the second hand chain too.
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Old 19.01.2015, 12:12
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Re: Will the prices change?

I am looking for a shift in computer component prices..
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Old 19.01.2015, 12:14
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Re: Will the prices change?

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As i already said raw material costs are negligable,
No. There's 150g of gold in a solid gold Rolex Day-Date, watch and bracelet. Gold is about $41 a gram at the moment meaning there's $6150 of gold in a Day-Date if it were 24k gold - the gold is worth $4612 as it's 18k.

The watch costs around $30 000 to purchase, meaning raw materials are 15% of the cost of the watch (more, because the mechanism is normally bought in and not made by Rolex).
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