marknorton Posted November 13, 2008 Share #1 Posted November 13, 2008 Advertisement (gone after registration) Announced on the news this morning that Germany is in recession, joining the US and the UK, among others. As these are Leica's 3 biggest markets, I'm wondering what that means for Leica's sales. Thoughts? Link to post Share on other sites More sharing options...
Advertisement Posted November 13, 2008 Posted November 13, 2008 Hi marknorton, Take a look here Germany in Recession. I'm sure you'll find what you were looking for!
phovsho Posted November 13, 2008 Share #2 Posted November 13, 2008 I think Leica is going to hurt. They are seeing opportunities in all their markets, not just the big three, taking a hit. At the same time they have very ambitious and expensive product development programme underway - R10 + autofocus lens, S2 etc. Their latest range of products are very, very expensive top of the line luxuries. All leicas are luxuries really, but the new M lens are luxuries amongst luxuries - I'm thinking 21/1.4, 24/1.4, 50/0.95 etc... Now the owner has deep pockets, but not super rich like the owner of Chelsea football club who just announced no new spending on players... So, I think Leica needs to make some tough choices in this market. That might include slowing down the roll out of new products, including the S2 and R10. Now is not the time for such heavy investment in risky products. That is my opinion. It is somewhat ironic that over the last few years, with the release of the M8, there was a shortage of leica lens. They missed a lot of sales as a consequence. Now, just as they ramp up investment in new products the market goes pear shaped on them. I know some folks are optimistic and think this is a USA problem and will be over with in 12 months. I don't think so. I think we are talking 3-5 years minimum and a global phenomenon. You heard it here first. Murray Link to post Share on other sites More sharing options...
jaapv Posted November 13, 2008 Share #3 Posted November 13, 2008 I don't know. Leica caters to the top echelon of consumers, and there are no data for that separate group. It is hard to predict how such big movements will affect a niche company. In one way it is easier for the small fry to weather the storm, particularly if the owner has deep pockets. Link to post Share on other sites More sharing options...
norbertnl Posted November 13, 2008 Share #4 Posted November 13, 2008 According to the official definition (minus during two quarters in a row) Germany is indeed in a recession. At the moment, however, we're still complaining on a high level as we Germans say: Klagen auf hohem Niveau. On the other hand I wouldn't be surprised if people changed their priorities at this moment, and use their money to pay for things that are more necessary. Best, Norbert Link to post Share on other sites More sharing options...
jaapv Posted November 13, 2008 Share #5 Posted November 13, 2008 Anyway, we are constantly being told that Leica's customers are solely doctors, lawyers and dentists. Those sectors are least hit by economic fluctuations...... Link to post Share on other sites More sharing options...
phc Posted November 13, 2008 Share #6 Posted November 13, 2008 It's often the luxury brands that survive best in these circumstances. There are still a lot of people in the world with a lot of money. I expect Leica are doing pretty well in China and Russia. Link to post Share on other sites More sharing options...
Leica(at)Palatinate Posted November 13, 2008 Share #7 Posted November 13, 2008 Advertisement (gone after registration) Many experts say that by Summer 2009 recession will turn into, well may be not a boom, but an upswing. Leica`s strategy is one on long terms (sometimes very long ...). Think positive, so does Leica. Hermann Link to post Share on other sites More sharing options...
SJP Posted November 13, 2008 Share #8 Posted November 13, 2008 Considering the negative slope on the value of my shares I have been thinking that it would have been much better to sink more cash into Leica stuff (esp. glassware). Management at home is not convinced however. Ah well... Checkup: AEX -0.45% DOW Jones +0.29% Link to post Share on other sites More sharing options...
greg s. Posted November 13, 2008 Share #9 Posted November 13, 2008 Quite true. So send me a CARE package, please. And don't forget to add a Leica (a R9, if you don't mind). Greg (from Cologne, Germany) Link to post Share on other sites More sharing options...
alw Posted November 13, 2008 Share #10 Posted November 13, 2008 Considering the negative slope on the value of my shares I have been thinking that it would have been much better to sink more cash into Leica stuff (esp. glassware). Management at home is not convinced however. Ah well... Checkup: AEX -0.45% DOW Jones +0.29% I invested in M4 today. Link to post Share on other sites More sharing options...
earleygallery Posted November 13, 2008 Share #11 Posted November 13, 2008 As mentioned above so called luxury brands generally perform well during a recession (there are always people with money and there are always winners and losers in an economic downturn). I would suspect that if anything sales of the digicams will suffer as people may choose lower priced alternatives. Its always the middle markets that are hit worst. Budget or value brands sales increase as most people cut back their spending. Link to post Share on other sites More sharing options...
stevelap Posted November 13, 2008 Share #12 Posted November 13, 2008 Luxury brands may well fare better than most in a recession, but on the other hand the S2 is being targeted, at least in part, at professional photographers, who might be more susceptible... Link to post Share on other sites More sharing options...
earleygallery Posted November 13, 2008 Share #13 Posted November 13, 2008 Indeed the S2 is a pro camera. I really don't know how the pro market is likely to be affected - I read recently that smart companies increase their advertising in a poor market, as the natural reaction is to cut back on spending. No doubt as businesses fail some of those will be photographers, but in terms of % of the market and % of the Leica user/potential user market within that, I'm guessing its pretty small. If the S2 proves as good as it looks I'm sure it will win a lot of converts from other brands as pro's/studios replace/upgrade their equipment. Link to post Share on other sites More sharing options...
Aperture 2 Posted November 13, 2008 Share #14 Posted November 13, 2008 I just ordered a black MP as back-up for my M8, just in case the crisis put pressure on Leica to stop making some of their products like the film-based cameras. So in my case the recession was a reason to "complete" my system to be safe from unforeseen production changes... exactly the opposite than postponing purchases due to the crisis. Link to post Share on other sites More sharing options...
stevelap Posted November 13, 2008 Share #15 Posted November 13, 2008 Indeed the S2 is a pro camera. I really don't know how the pro market is likely to be affected - I read recently that smart companies increase their advertising in a poor market, as the natural reaction is to cut back on spending. No doubt as businesses fail some of those will be photographers, but in terms of % of the market and % of the Leica user/potential user market within that, I'm guessing its pretty small. If the S2 proves as good as it looks I'm sure it will win a lot of converts from other brands as pro's/studios replace/upgrade their equipment. Could well be....and I certainly hope so. All of the high-end camera manufacturers may be about to face some serious competition from the just announced RED Scarlet/Epic though. Link to post Share on other sites More sharing options...
sdai Posted November 13, 2008 Share #16 Posted November 13, 2008 My guess is that Leica's sales volume (excluding the compacts) are so small that they probably won't be bothered if there are 100 cameras moving per month or not at all. Like many have pointed out, I don't think Leica is going to be hit hard like many others would be plus, the camera business is more like a pet project of Dr. Kaufmann. I've no doubt that he has piled up enough cash before he jumped in for a joyride. Link to post Share on other sites More sharing options...
Photon42 Posted November 13, 2008 Share #17 Posted November 13, 2008 Considering the negative slope on the value of my shares I have been thinking that it would have been much better to sink more cash into Leica stuff (esp. glassware). Management at home is not convinced however. Ah well... Checkup: AEX -0.45% DOW Jones +0.29% think of a management incentive programme Link to post Share on other sites More sharing options...
StS Posted November 13, 2008 Share #18 Posted November 13, 2008 The first company I worked for was so small they never covered the full market. On the other hand it's market was so small, it was not attractive for the major players having similar products. This made this company pretty crisis proof. If you excuse my humour - someone has to provide the world with cameras, when Nikon and Canon go bust Link to post Share on other sites More sharing options...
delander † Posted November 13, 2008 Share #19 Posted November 13, 2008 My guess is that Leica's sales volume (excluding the compacts) are so small that they probably won't be bothered if there are 100 cameras moving per month or not at all. Like many have pointed out, I don't think Leica is going to be hit hard like many others would be plus, the camera business is more like a pet project of Dr. Kaufmann. I've no doubt that he has piled up enough cash before he jumped in for a joyride. And the dealers how will they fare? I think Leica will be extremely bothered. if they weren't they would not have introduced an M8.2 with 'reserved features not available through the upgrade programme' in an effort to boost flagging sales. Although people here seem to think that Leica can just sell to recession immune millionaires I dont think that is the case. There are knock on effects everywhere. Jeff Link to post Share on other sites More sharing options...
mooky Posted November 13, 2008 Share #20 Posted November 13, 2008 If the investment in Leica has been mostly with money from Kaufman's pockets I would think that the effect would be on him and not Leica per say. Since the company is in a re-building stage, perhaps only unsold finished product would be shown against the bottom line as employees have been or have to be paid for their efforts. Dealers would seem to be the ones who will bear the greatest losses just because they will not move merchandise. It seems then that Leica can still finish the re-building because it hasn't been directly dependent on merchandise profits - at least for now. It would also seem that could change quickly as well towards the development of new products - so there may be delays (bummer) in the R10 and maybe the S2. Certainly, from a pure business model, it's not the ideal arrangement or time for building profits or sales. For Leica, it must something of a 'danged if you do, danged if you don't'. Link to post Share on other sites More sharing options...
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