“Where are the rest of the Yamaha snowmobiles?” and speculating about our future.

[Tarzan]

CooperT is rightView attachment 139014

Maybe they will show this bastard on the sneek peek LOL! Yamaha my #*$&@ https://www.yamaha-motor.eu/no/produkter/snoscootere/crossover/mp-600-xe-transporter.aspx

 

[mikextx]

That one there, that's 100% Arctic Cat. I don't even know how that's legal to put Yamaha on it.

 

[20/80]

What? Are you just quoting raw materials? When you figure all direct and indirect costs you would be surprised.

Like I said you are hypnotized into thinking that way, these huge companies like Yamaha, Brp, Polaris, and many others don't buy their supplies at the local metal shop, they buy huge volumes of aluminum and bolts and nuts and many mold their own producing parts for pennies putting them together on a assembly line, these guy's set the price for metals, yes tooling costs, but is just a drop in the bucket for a big manufacturing company, if I wanted to have a side Winder instead of buying from a dealer I ordered every part and built one what do you think I would pay? do you think the price would be same as the sled sitting in the showroom at the dealer? it would probably be better built, most people base there opinions on prices on what they are paying for replacement parts, its costing the big manufacture pennies to produce you surely are not charged pennies for it, director indirect costs or not.

 

[earthling]

Like I said you are hypnotized into thinking that way, these huge companies like Yamaha, Brp, Polaris, and many others don't buy their supplies at the local metal shop, they buy huge volumes of aluminum and bolts and nuts and many mold their own producing parts for pennies putting them together on a assembly line, these guy's set the price for metals, yes tooling costs, but is just a drop in the bucket for a big manufacturing company, if I wanted to have a side Winder instead of buying from a dealer I ordered every part and built one what do you think I would pay? do you think the price would be same as the sled sitting in the showroom at the dealer? it would probably be better built, most people base there opinions on prices on what they are paying for replacement parts, its costing the big manufacture pennies to produce you surely are not charged pennies for it, director indirect costs or not.

Oh, my.. where to start, or maybe not at all. Metals are commodities, the price of which is set by the flux of supply and demand. None of the companies on your radar consume enough metal to make a dent in the overall metals market. I mean, how is this not obvious. A ship manufacturer would consume more metal annually than all 4 snowmobile manufacturers (and their extended summer sports divisions) consume in a decade. There is more metal in a high rise building, or in a large bridge than these companies consume a year combined. None of the these manufacturers are large enough to set the price of metals. Even if you throw in the Yamaha parent company and BRPs (Bombardier), the total of all of that would still not be a dent in the metals market. The combined total revenue of all of those companies, parent companies included, is 1/10th the revenue of just Volkswagen AG for instance. These companies are ALL mid sized companies who must purchase from a supply chain just like everyone else. The example I gave you for the mold costs are a real world example of how prices are set.

 

[20/80]

Oh, my.. where to start, or maybe not at all. Metals are commodities, the price of which is set by the flux of supply and demand. None of the companies on your radar consume enough metal to make a dent in the overall metals market. I mean, how is this not obvious. A ship manufacturer would consume more metal annually than all 4 snowmobile manufacturers (and their extended summer sports divisions) consume in a decade. There is more metal in a high rise building, or in a large bridge than these companies consume a year combined. None of the these manufacturers are large enough to set the price of metals. Even if you throw in the Yamaha parent company and BRPs (Bombardier), the total of all of that would still not be a dent in the metals market. The combined total revenue of all of those companies, parent companies included, is 1/10th the revenue of just Volkswagen AG for instance. These companies are ALL mid sized companies who must purchase from a supply chain just like everyone else. The example I gave you for the mold costs are a real world example of how prices are set.

LOL... yes metals are commodities, commodities are what you see on the stock market, the numbers you see are what they are being traded for not sold for, there is a difference, chances are aluminum and magnesium and pipe steel suppliers for the power sport industry are not even registered with any stock exchange that's why manufactures get the metals so cheaply especially when they buy in big volume, and I do believe power sport companies around the globe do put a dent in the metal market.

 

[WillowAce]

Hmm... so you think a sled with an MSRP of $17,500 costs the manufacturer a couple grand to build? There is no sense in discussing this further.

 

[20/80]

Hmm... so you think a sled with an MSRP of $17,500 costs the manufacturer a couple grand to build? There is no sense in discussing this further.

Yep.. I agree

 

[zr7cat]

Thanks OEM's for driving the #*$&@ out theses MSRP's.. Really starting to make buying used sleds hard. Guys selling their junk for sky high prices!!!!

 

[earthling]

LOL... yes metals are commodities, commodities are what you see on the stock market, the numbers you see are what they are being traded for not sold for, there is a difference, chances are aluminum and magnesium and pipe steel suppliers for the power sport industry are not even registered with any stock exchange that's why manufactures get the metals so cheaply especially when they buy in big volume, and I do believe power sport companies around the globe do put a dent in the metal market.

(@me pours large mug of coffee, adopts pompous professorial tone or maybe that was incredulous satirical tone..)

If the average sled weighs 600 pounds and we assign all of that weight to just metals and multiply that times the total number of sleds produced in a year by all manufacturers (120,000 by generous estimates), the total weight in metals consumed is 72000000 pounds (72M pounds) or 36,000 Tons (36K Tons).

The global annual production of Steel last year was 1.6B (billion) Tons
The global annual production of Aluminum is 30M (million) Tons
The global annual product of Magnesium was 850K (thousand) Tons

So the total annual production of snowmobiles is .002% of the steel production OR .12% of the aluminum production OR 4% of the magnesium production if the entire sled was made completely out of each metal. They aren't and the by weight the amount of say magnesium in the sled is probably less than 2% of the total weight of the sled so 600*.02 or .08% of the total magnesium produced. The number is probably a lot lower than that at less than 1% but then I am just guessing at the percentage, the rest of the numbers above are fact. Anyhow, snowmobile manufacturing and even the total metal consumed by the combined manufacturers (inclusive of SxS and ATVs) you talk about isn't going to put a significant dent in the world metals market.

BTW Commodities are the way that prices are set, what is it that you think people are trading? Commodities Futures are contracts to purchase the future production of a resource (like metal or oil). You are in effect buying the goods (metal or oil) and take into account warehousing and rise or fall of availability. If you buy Oil commodities you (the buyer) actually contractually OWN that resource as a portion of the production housed in a registered warehouse and are making a bet that in x months (contract term) the price will go up, and your contract will be purchased at the spot price. When a company like Yamaha buys metal they buy it at the Commodity Spot price which is the then 'on the spot' price inclusive of warehousing and transportation at that specific point in time. Typically this will be ABOVE the Futures price. Either way the commodities price is the current or future price of the raw material. In reality, Yamaha probably rarely purchases the raw material, they purchased produced goods built by a subcontractor at the level of Yamaha Motors anyhow. The only time that you can break out of this is if you can make a multi-year purchase agreement for the raw materials. Even then, the supplier is going to look at you and the market and decide whether the bird in hand (Yamaha) is worth two in the bush (the market) and make a risk driven decision. With commodities you predict that demand is going to go up or down (mostly up) and would be EXTREMELY reticent to sign a multi-year deal and the price you would set for such a deal would probably be the middle ground of todays pricing, and a three year price on the open market, in other words, above todays spot price BECAUSE you KNOW that you can sell the contract to someone on the open market at a futures driven price.

Much like the commodity price on gold doesn't mean you pay for a ring by its weight, you have to pay for the production of that gold into a ring which by definition costs more than just the raw weight (commodity price of the gold). If you are telling me that you can buy gold (or any metal) at less than its commodity price for raw materials I will personally buy every ounce you can source as would anyone else because guess what, the world is buying at the commodities price. You do understand that what you buy on the stock market whether its commodities or shares is actual ownership...right... RIGHT?

A fun fact, there are 10000 shipping containers lost at sea every year, those shipping containers weigh about 8000 pounds each, that's 80M pounds of steel (empty container) lost at sea every year or the equivalent of the total consumed metals in the snowmobile industry (again, assuming that the entire sled is made of metal in this case steel).

Coffee done, I now return you to your normal daily soap opera (the snowmobile industry). Tom, last word from me on the subject.. back to purely sled talk....

 

[WillowAce]

Lol, that was too much information. Shall we open the can of worms involving buyers speculation, futures purchase, and actually paying more for a commodity at times than I do at the local hardware store?

 

[super1c]

Guys your giving me a headache. What is this post about?

 

[20/80]

Guys your giving me a headache. What is this post about?

Justifying why you are paying so much for a new sled, Earthling just posted up one heck of a explanation,... not sure if his numbers are accurate but I will give him the benefit of the doubt..lol I would say Earthling is a pretty smart dude, I better stop before he starts pouring Rum into his large coffee mug.

 

[murdered141]

Justifying why you are paying so much for a new sled, Earthling just posted up one heck of a explanation,... not sure if his numbers are accurate but I will give him the benefit of the doubt..lol I would say Earthling is a pretty smart dude, I better stop before he starts pouring Rum into his large coffee mug.

I thought that was the rum talking

 

[Big_Phil]

LOL, $1500 to build a sled. Ridiculous. Almost as ridiculous as saying a GM truck costs $3500 and a dealer only needs to sell 1 truck every 2 months.

Honestly tho, you think sleds have a bad markup, have you looked at the price of Side by Side ATVs? 25 grand for something that legit looks like it costs $3500 to build.

 

[earthling]

I thought that was the rum talking

Captain..