The GBP to Euro and Euro to Yen exchange rate has been causing serious problems for British companies purchasing Japanese manufactured products over recent months. A large majority of office photocopier and multifunctional device brands are manufactured in Japan, including, Ricoh, Fuji Xerox, Sharp, Konica Minolta, Kyocera Mita, Panasonic, Toshiba and Canon. Taking Canon as an example, it can be shown how much these exchange rates can affect photocopier costs. Canon Europe headquarters purchase their machines, parts and toner in Yen from the manufacturers. The Euro to Yen exchange rate has become weaker and weaker over the past 6 months (http://www.tititudorancea.com/z/euro_to_jpy_exchange_rates_japanese_yen.htm), increasing purchasing prices by 30 percent. These products are then bought by Canon UK and, with the GBP being weak against the Euro (http://www.advfn.com/p.php?pid=forexquote&curcode1=GBP&curcode2=EUR), Canon have had to endure an increase in cost prices by another 30 percent. This means that before the products have even reached the suppliers they could have incurred a price increase of up to and beyond 60 percent. The negative Sterling to Euro and Euro to Yen exchange rate has forced photocopier manufacturers such as Canon and Ricoh to pass some of the price increases on to their UK suppliers and dealerships, leaving these businesses in a difficult situation.
Genuine parts?
The cost price increase includes all genuine parts and toner supplied by the photocopier manufacturers. This means businesses offering leasing of copiers are suddenly seeing substantially increased costs to replace toner and service these devices. Some companies might be tempted to use sub-standard parts and toner to try to keep costs down. Many of the parts and toners that are not genuine brands are manufactured outside Japan and so do not have the same problems of negative exchange rate trends. These products therefore remain cheap to purchase. However, most reputable and reliable photocopier companies would only ever use genuine parts and toner. Non-genuine parts and toner can not only make the manufacturer’s warranty invalid but are often of sub-standard quality meaning that the prints they create are of a poor standard and they may ruin the device or decrease its lifespan.
Difficult Times
The cost price increases leave photocopier companies in a difficult position. Although some of the increases have been absorbed by the big manufacturers, it still leaves the authorised dealers with limited options, none of which are very appealing. The first option would be to buy non-genuine parts and toner to keep costs down, which most good companies would not even consider doing. The second option would be to cut costs in other areas, such as reducing the number of servicing engineers, which would mean the customer would receive sub-standard servicing on their machine, with much slower response times. The last option which many businesses are being forced into, having no other options left, is to pass a percentage of the price increases over to their customers.
Increasing prices for customers is something that most businesses would try extremely hard to avoid. With the ever changing financial climate businesses are finding that this is exactly what they have to do, which, at a time when many businesses are struggling, losing more customers over the price increases could be disastrous.
What effects do you think this could have on our economy? Any other comments? Feel free to contact us with any thoughts or questions. Or visit http://www.canoncopiers.co.uk for more information.
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