Superyacht exporters faced with uncertainty on both sides of the Atlantic
It is widely perceived that US exporters of superyachts and their products have suffered because of the strength of the dollar against the euro. But with the 'US fiscal cliff' looming it appears that manufacturers in Europe could experience a reversal of fortune.…
American exporters of superyacht products and services are continuing to face an uphill battle against their European counterparts, caused chiefly by the strength of a resurgent US dollar and the continual decline in the strength of the euro.
This is a problem that US-based motion control systems manufacturer Naiad Dynamics is all too aware of, as its director of global sales, Steven Vidakovic, explained:
“Naiad is working on projects that we sold at €1.45 with the rate now at €1.25. The falling value of the euro is making it difficult to compete with European companies.”
Vidakovic said that the company is now quoting lower prices on projects and hoping that the euro will rally whilst the work is undertaken. If this were to happen any projects signed now would be relatively profitable.
But whilst the strength of the dollar makes US export prices less attractive in the global marketplace, according to Charles Purdy, managing director of Smart Currency Exchange, European exporters are facing challenges of their own to remain competitive.
“Exporters in austerity-hit Europe are suffering under the weight of local recessions and significant tax rises, combined with high borrowing costs and a stressed banking sector unwilling to lend”, explained Purdy. “These conditions are the perfect mix of ingredients to weaken manufacturing, and in turn increase exporters’ reliance on a weak currency to maintain profit margins.”
Henk de Vries, commercial manager at Feadship de Vries, feels that the value of the euro has not bottomed-out against the dollar and that the US will emerge from economic stagnation stronger than Europe. This he said “would mean the euro got weaker still and that would be even worse news for [American exporters].”
One spectre on the horizon that could have implications for both American and European industry players is the new year’s predicted “US fiscal cliff’ – the result of which could be corporate tax hikes and reduced government expenditure, similar to the situation currently afflicting Europe. As Purdy warned, “this would potentially trigger a new US recession and force the US Federal Reserve to again intervene to devalue the dollar – reducing the currency benefits for businesses on the other side of the Atlantic in the process.”
Naiad Dynamics Profile | Naiad Dynamics Website
Feadship Profile | Feadship Website
Smart Currency Business Website
This is a problem that US-based motion control systems manufacturer Naiad Dynamics is all too aware of, as its director of global sales, Steven Vidakovic, explained:
“Naiad is working on projects that we sold at €1.45 with the rate now at €1.25. The falling value of the euro is making it difficult to compete with European companies.”
Vidakovic said that the company is now quoting lower prices on projects and hoping that the euro will rally whilst the work is undertaken. If this were to happen any projects signed now would be relatively profitable.
But whilst the strength of the dollar makes US export prices less attractive in the global marketplace, according to Charles Purdy, managing director of Smart Currency Exchange, European exporters are facing challenges of their own to remain competitive.
“Exporters in austerity-hit Europe are suffering under the weight of local recessions and significant tax rises, combined with high borrowing costs and a stressed banking sector unwilling to lend”, explained Purdy. “These conditions are the perfect mix of ingredients to weaken manufacturing, and in turn increase exporters’ reliance on a weak currency to maintain profit margins.”
Henk de Vries, commercial manager at Feadship de Vries, feels that the value of the euro has not bottomed-out against the dollar and that the US will emerge from economic stagnation stronger than Europe. This he said “would mean the euro got weaker still and that would be even worse news for [American exporters].”
One spectre on the horizon that could have implications for both American and European industry players is the new year’s predicted “US fiscal cliff’ – the result of which could be corporate tax hikes and reduced government expenditure, similar to the situation currently afflicting Europe. As Purdy warned, “this would potentially trigger a new US recession and force the US Federal Reserve to again intervene to devalue the dollar – reducing the currency benefits for businesses on the other side of the Atlantic in the process.”
Charles Purdy, speaking on behalf of Smart Currency Business, the corporate arm of the Smart Currency Exchange.
Related LinksNaiad Dynamics Profile | Naiad Dynamics Website
Feadship Profile | Feadship Website
Smart Currency Business Website
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