Leica Camera Sales Down 38%

[Agent M10]

Advertisement (gone after registration)

Article on latest Leica camera sales here

[kenneth]

With the present financial climate in Europe it is hardly surprising. But I guess life will go on.

[Thomas Edwards]

...perhaps it may be time for leica to consider emulating zeiss' approach a few years ago in establishing a us assembly plant to remain cost competitive...2nd world cost structure in a 1st world market that i would imagine would be leica's largest...

[bill]

This is hardly surprising given:

 

1. The climate of confusion and uncertainty created by SKL - his dance of the seven veils over the future product roadmap was a nightmare.

 

2. The intense speculation around (and the number of people holding back waiting for) new product announcement(s) at Photokina.

 

3. The downturn in discretionary spend triggered by the American sub-prime fiasco.

 

The more interesting number is the increase in R&D spend.

 

Remember that it is not a publicly quoted company anymore. It no longer has to think short-term, chasing annual returns for shareholders. Herr Dr. Kaufmann has the luxury of taking a longer term view.

 

Regards,

 

Bill

[andybarton]

The R&D spend is the really exciting part, as is the "Sits Vac" list

[kenneth]

I think major changes will happen within Leica's product range. I would not be surprised to see it dump compact digital as it has to share it's profits with Panasonic. I think it will consolidate it's range and focus on what it does best, i.e. M cameras and lenses. Although not popular with some more traditional customers, Leica will extend it's luxury market image and I think we will see a huge increase in limited editions which are obviously a good money spinner. I wouldn't be at all surprised to see, say a limited addition Madonna M Leica to court the female market and maybe an Eric Clapton signature MP, the list is endless and is only limited by ones own imagination . Also we might see the company re visit it's history and start manufacture of some of it's early long gone and much loved models as it has all the patterns and the manufacturing know how and a workforce that it will not want to loose if it can help it. R&D will, I think be the smallest growth area in Leica. Marketing and the development of iconic status will be it's most attractive route and it may well bring expertise in from, say, the luxury end wristwatch market to pilot it's future growth in that area. They would then open Leica boutiques in all the major capital cities staffed by their own staff and start a sponsorship sponsoring major sporting and cultural events.

 

In fact, in 8 years time we will not recognise the Leica we know

[PeterP]

Advertisement (gone after registration)

I'm sure even Porsche sales are sluggish right now .

[Guest Whitewillow321]

I suspect that people who can afford to buy the M8 aren't worried about the economic downturn. The really rich will continue to buy their Ferraris, Guccis and Diors and all the Noctilux goodies. The compact camera crowd might tighten their belts though.

 

Also, with Photokina and a new Leica product line around the corner, who wouldn't keep their wallets zipped until after next month's camera convention? Why buy a 2-3 year old camera model when the new stuff is rolling off the assembly line next month?

[andybarton]

Kenneth

 

They tried the limited edition route and rebuilding very old models under revious ownership. The almost went bamkrupt. How many people would buy a "Brad Pitt" M? Not enough to keep the company going. The R&D dept has grown by 1,000 in the last year.

 

Selling rebadged Panasonics costs them almost nothing

[kenneth]

Kenneth

 

They tried the limited edition route and rebuilding very old models under revious ownership. The almost went bamkrupt. How many people would buy a "Brad Pitt" M? Not enough to keep the company going. The R&D dept has grown by 1,000 in the last year.

 

Selling rebadged Panasonics costs them almost nothing

 

We shall see, and I have to say, I am not really bothered, only an academic after a lifetime in marketing tickled my interest. So long as I can get my M6 fettled as and when, I have as much camera equipment as I am likely to need or want in this lifetime

[Saloti]

In order to fully understand the situation (=desaster) in Solm, we

should take a glace at absolute figures (quote from official interim

announcement, available on Leica website) :

First quarter of fiscal year 2008/2009

Leica Camera Group closed the first quarter with sales of € 26,999,000 (previous year:

€ 43,560,000). The strong decline is due to reduced sales of the M system and of digital

compact cameras, resulting from delays in the introduction of new products.

As compared to the prior year period the Group result for the first quarter has decreased by

€ 8,018,000 to a Group net loss of € 3,850,000 (previous year: Group net income of

€ 4,168,000). This decrease results from the decrease in sales, as well as from increased

research and development expenditure, which in the first quarter of the fiscal year amounted to

€ 4,668,000 (previous year: € 3,451,000).

 

Leica has lost nearly 40% of the sales in one quarter. This is a

catastrophy. Well, we know that they are in bad shape, but 40% is sincerely more

than I expected.

 

Compact segment : I guess that they do have problems facing extremely short

innovation cycles.

 

M-system: Has been discussed 1000 times in the forum. The price increase end of

2007 must have cost them tremendous sales figures, their recent sales promotion

came/comes late, very late. The effect could be minor, because everybody waits

for news on the M-system at Photokina.

 

R-system: I expect sales close to "zero", with regard to expected new products at

Photokina.

 

Let us pray that Leica will launch/announce the right new products....

 

[rosuna]

I strongly disagree with Kenneth.

 

Leica is investing large amounts in R&D and manufacturing equipment. They are revising their line of products and expanding it, by including new camera systems and other segments (video, projectors... ).

 

The M system is alive and well. They only need to introduce updates and complete the line. The problem is with the reflex line of cameras and lenses.

[Saloti]

I strongly disagree with Kenneth.

 

Leica is investing large amounts in R&D and manufacturing equipment. They are revising their line of products and expanding it, by including new camera systems and other segments (video, projectors... ).

 

The M system is alive and well. They only need to introduce updates and complete the line. The problem is with the reflex line of cameras and lenses.

 

You might disagree with Kenneth. Unfortunately Leica (!!) names M-system as one

major reason for sales decreases. Now, do you disagree with Leica as well ?

[stunsworth]

Given that Leica were making M8s as fast as they could after the camera's release, I'd expect sales to fall back once the initial rush of orders had been satisfied.

[rosuna]

You might disagree with Kenneth. Unfortunately Leica (!!) names M-system as one

major reason for sales decreases. Now, do you disagree with Leica as well ?

 

I don't disagree with the facts, but with the opinions about what should be the direction to take.

[andybarton]

You might disagree with Kenneth. Unfortunately Leica (!!) names M-system as one

major reason for sales decreases. Now, do you disagree with Leica as well ?

 

this is due to a ridiculously botched announcement in the Spring, causing confusion and leading to postponed sales. Clarity will come in Sept.

 

Given that Leica Camera is a private company, these results mean nothing if the owner is prepared to continue investing, and there is no sign of that stopping.

 

Photokina is going to be very exciting, I reckon, and sales to people who have been waiting will increase

[Saloti]

I strongly disagree with Kenneth.

 

Leica is investing large amounts in R&D and manufacturing equipment. They are revising their line of products and expanding it, by including new camera systems and other segments (video, projectors... ).

 

The M system is alive and well. They only need to introduce updates and complete the line. The problem is with the reflex line of cameras and lenses.

 

Andy, I am the first to hope & pray that you are right.................

[Guest darkstar2004]

Sales are down indeed, but it doesn't necessairily mean its the end of Leica. After all, with the economic situation we all face, everybody's sales are down! The rich and mega rich will not be affected and alot of those gentle folk are Leica lovers too.

 

Wisner and Canham are still alive and kicking; I can't see Leica dying when much smaller camera builders are still muddling along. JMHO...

 

I want Leica to survive and thrive but PLEASE GAWD, not the Herpes (Hermes) schtick again!!! Not a Madoodoo MP!!!

 

Hmmm... General motors has its own financing (GMAC) for auto buyers; maybe Leica should look in to doing that for Leica buyers.

 

Not many imagemakers can fork over $7990US for an M7 or MP and a 50/1.4ASPH all on their own. Perhaps Leica could benefit from helping out actual photographers instead of catering to The Rich And Fabulous.

 

Just a thought...

[marknorton]

...perhaps it may be time for leica to consider emulating zeiss' approach a few years ago in establishing a us assembly plant to remain cost competitive...2nd world cost structure in a 1st world market that i would imagine would be leica's largest...

 

LOL, Mercedes-Benz established an assembly plant for the M-class in Alabama and it was a disaster. BMW did the same for the Z3 sports car in South Carolina and it was a disaster too. Daimler merged with Chrysler and, guess what, it was a disaster.

 

I don't think a US Leica plant makes any sense at all...

[Advertisement]

Hallo,

Look here: Interesting Leica gear

[marknorton]

The R&D sept has grown by 1,000 in the last year.

 

Andy, where on Earth do you get that gem of information from? They only employ 1,000 people in total, or thereabouts...