Nikon announced price increase in Japan

Nikon announced a new price increase in Japan for Nikkor lenses and Speedlight flashes. The full list of impacted products can be found here (PDF file). The new pricing will be active on March 1st, 2016. The reason for the new pricing is the increased cost of raw materials.

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  • Gregory Roane

    Huh. No price disparity between the AF-S 50mm f/1.8G and the Special Ed version anymore.

  • ZoetMB

    Fine. They’re supposedly increasing prices because of the increased cost of raw materials. But how come there’s no price reduction because of incredibly low fuel prices – less than a quarter of what they were at their peak. The inflation-adjusted peak price for oil was almost $150 a barrel in 2008 – it’s RISEN to $35 today.

    And how come there’s no price reduction on the products that would have once been manufactured with fairly high-priced labor in Japan and are now manufactured in China, Thailand or elsewhere where labor costs are low?

    It’s really not a good idea to raise prices, especially consumer prices (as opposed to pro equipment) in a declining market. Gives consumers even more of a reason to just use their smartphones or other lower cost solutions.

    Just guessing, but I believe this has absolutely nothing to do with the price of raw materials. It has simply to do with Nikon “making its numbers” and the only solution they see is to raise prices. But if you raise prices 5% and lose 5% of your business as a result, you’re just back to where you started AND you’ve reduced the chance that your customer base is going to buy additional lenses or other hardware.

    As Thom Hogan points out all the time, Nikon needs to do re-engineering so that their cameras can be built with far fewer parts.

    • Blrfl

      Ever considered that a weaker-than-it-was-a-year-ago yen might have something to do with it?

      • ZoetMB

        You’d have to do a very complex analysis measuring the positive/negative in currency translation in terms of revenue from each market as well as the positive/negative in terms of raw materials costs from each market they purchase raw materials from. Also consider the fact that most companies pay to hedge against currency translation risk. Remember that Nikon has not just raised prices in Japan – they’ve also raised prices in the UK. I suspect more markets are to come.

        A weak yen works both ways – in essence, U.S. sales are already a price increase due to the strong dollar.

        • RodneyKilo

          Don’t think it would need to be that complex.
          Compare revenue per unit in local currency for every type of unit last year and this year (taking into account any pricing differences).

    • T.I.M

      mirror less cameras have way fewer parts compared to DSLR

    • Thom Hogan

      Many of those lenses, and perhaps all the glass, is made in Japan. Even at lower prices for oil, Japan is still paying more for power than pre-quake when all the nuclear reactors were running. To my knowledge, Nikon never passed those costs on.

      Note that these aren’t cameras, they’re lenses. A whole different set of things apply to lenses than cameras. Harder to make a lens less parts intensive than it currently is (at least without sacrificing quality/performance).

      I’ll take Nikon at their word here.

      However, as you note, raising prices isn’t going to help them make their numbers. Curiously, this news release came at the same time as BCN’s annual Japan market market share numbers. For lenses, Nikon went from a 23.2% market share in Japan in 2009 downhill pretty much every year to a 15.2% market share in 2015. They’re already feeling the pressure of lower sales at home.

      However, I can’t resist getting my usual “where are the DX lenses” dig in: especially in Japan, smaller/lighter is desirable. Nikon pushed the opposite direction and lost market share at home.

      • Yirmin

        One problem with your theory is that they claim they are raising in response to increased cost of ray materials. Japan has no real natural resources that are going to be found in those lenses… The plastics are made from petroleum products which are all imported the glass is made from a combination of sand and chemical, the expensive part is the chemicals and they are imported (I know because I used to work at a company that exported tons of chemicals to Japan for making all types of glass) and a we bit of copper for the electronics inside which is all imported… The price of all those raw materials has only gone down, none of it is going up.

        And generally speaking companies don’t put electricity down as a raw material… I see this as they are just trying to squeeze out more profit, nothing more except the inability to just be honest about it.

        • Thom Hogan

          The yen has also declined against a lot of currencies, so while the dollar-denominated price of a commodity might have gone down, it could still be a higher price in Japan. My understanding is that Nikon has been putting this price increase off for several years. So if you’re looking at short term price changes, you’re probably not seeing it on the same scale Nikon is.

          I’m going to take Nikon’s position on this. They were trying for several years now to keep their profit margins by cutting things all throughout the company rather than changing pricing during a sales decline. I think they’ve discovered they cut to the bone.

          As for “squeezing out more profit,” to a large degree that’s what a business is supposed to do. It’s how they stay in business in the future (e.g. generating cash for investment in future products).

          • Yirmin

            I have no problem with a company trying to make as much money as they can… But I don’t appreciate it when they try to blow smoke up my a$$ and tell me a BS story. Yes the Yen to the Dollar has declined over the past 5 years by about 70%, but then commodites used for lenses have decline much more… So for me its a question of integrity and if that’s is their story I’m call BS on it.

            • Thom Hogan

              Okay, so you’re saying that the materials used in lenses declined by 70% or more in the same five year period. I don’t find any evidence for that. For example, the raw metals index price did not fall by anything near that amount in five years. More like 30%.

              So I’m going to call you on this: show your work. Give us pricing examples of the actual materials you think are involved here for the five year period back to 2011.

              You’re also making an assumption about volume, too. But I’ll let that one go for the moment.

            • PhilK

              I think the truth is somewhere in between the far poles. Nikon may have had some costs go up, but they seem to raise prices like clockwork no matter *what* is going on from either the raw manufacturing cost standpoint, currency fluctuations, business conditions in general, etc.

              Personally I think their manufacturing is probably somewhat inefficient and their designs not as well rationalized for production as their larger (cough Canon cough) competitors. Maybe they have logistics problems as well.

            • Thom Hogan

              I don’t really disagree.

              Most people know what I think. Basically, Nikon put themselves in a terrible position the way they tackled being a global company. They’re not at all global.

              How’s that intersect with pricing? Well, for one, they can’t move inventory to where it is selling away from where it isn’t. In essence, they’re extremely inefficient, which puts pressure all the way back to corporate in terms of their pricing strategies.

              But they also have a very strange and irrational product line, too. For some reason, we still have AIS lenses in the lineup, yet we don’t have necessary DX and Nikon 1 lenses in the lineup. This too puts pricing pressure back on the company, as they’re keeping things in production that aren’t really selling in quantity and missing on things that would probably sell through more easily.

              Nikon has all the appearances of what they are: a large bureaucratic entity that developed in a low volume professional and business-to-business tool arena, but is trying to make that work in a high volume consumer arena. What they got away with in the rapid run-up of digital camera volume they simply can’t get away with any more, yet they try.

              The real problem, though, isn’t whether their lens prices track with their costs, it’s that the people they’re selling these lenses to don’t have increasing disposable income and have noticed that they’re getting less and worse support at those higher prices. The combination is brutal, and Nikon’s customers are going to continue to push back on price increases because of that.

            • Yirmin

              Crude dropped from 100 to 30… That’s 70% drop and crude is the basic component of most every plastic you can think of it also the basis on which energy in Japan that isn’t from nukes would be from… copper went from $4.40 a pound to $2 a pound a drop even greater than 70% but then I only said declined 70% or more… which is completely accurate… What else do you think your going to find inside a lens or flash other than the glass made from sand and bit of potash. You think commodity prices haven’t dropped then prove it otherwise just go piss off in your own ignorance.

            • Thom Hogan

              In other words, you don’t have a specific answer to my question. You showed your work, and it was “well some stuff dropped and I think it might have been stuff used by Nikon, so I’m right.”

              And by the way, a drop of 2.4 on 4 is not >70%, it’s 60%.

              Given the lack of specificity and accuracy of your answer, I don’t think you’ve proven your argument. Not even close.

            • Yirmin

              Actually it is 45% drop on the copper price… But try for one brief moment to use your brain. What is the percent of copper you are even going to find in any of those accessories…. A tiny fraction of them is made of copper the majority is plastic or glass… Plastic is going to be completely based on crude prices and glass is going to be very close because the main component of making glass is energy which is going to be correlated to crude prices if you are in Japan because the bulk of their energy comes from imports. Are you so stupid you can’t understand that?

            • Thom Hogan

              You’re starting to sound like Trump. Insults aren’t actually a good debating technique.

              Your assumption here has been that some raw commodity prices have fallen so much that Nikon is overcharging with this price increase. You haven’t really identified which commodities those are that are (nor has Nikon).

              However, besides making overstated arguments like the copper one, you fail to account for plenty of things in your “analysis.” First, Nikon buys parts from other small companies in Japan, not just commodities. Just like Toyota does for autos, there is a community of parts suppliers around the camera industry, and many of them are considerably small and under all kinds of monetary pressure recently.

              By your naive argument, an iPhone should have dropped considerably in price. Same with autos and just about everything else. Yet they didn’t, and you’re singling out Nikon as being dishonest.

              Sorry, but I just don’t buy your arguments.

            • Yirmin

              Go reread your posts you keep harping that the cause of the increase is justified by increases in the raw materials…. There is none. So now you start yammering that its because parts from suppliers have increased…. Well those parts aren’t raw materials so make up your mind… Or better yet just admit Nikon is just trying to raise profits. As I said I don’t give a damn if they want to raise profits, they could double prices if they wanted and I wouldn’t hate them for it… But I don’t like it when they lie about why they are doing it. Have some honesty because if they lie about this then you can’t trust anything they say.

            • Thom Hogan

              The original Japanese can be taken to mean anything that Nikon buys from suppliers. It is not limited to commodities. Indeed, you were the one that brought up commodities, not Nikon.

            • CERO

              technically, almost every currency of the world, has lost value against the USD.

    • whisky

      part of it may be materials, resources, etc. probably was a good time to pile in other overhead too.

      if you really want to target entities for inflating consumer cost, focus on the cost of handling $$$ by commercial credit and banks.

    • Lin Zhao

      No they are not supposed to only increased price because of increasing cost. The price is determine by both the demand and the cost. Their marketing decides there’s enough demand to drive a price increase.

    • John Albino

      Welcome to the future where business reacts to declining sales by increasing selling prices to maintain profit growth. An article in the Wall Street Journal the other day described how Coca Cola (and other soft-drink companies) are experiencing dramatically lower sales due to health (and other) concerns (such as changing consumer drinking patterns) by raising prices to maintain margins.

      Other similar articles, taken in the aggregate, indicate similar trends — rather than trying to goose sales in mature (and often declining) markets by lowing prices to encourage more purchases, the business model increases prices instead so the fewer “suckers” left will help them maintain margins (and profits). 🙂

      I’m a pure capitalist, and I admire their guts (and results, *if* they work) — too bad pro photographers don’t take a lesson from them. 🙂

      • Mike

        Fuji just raised their film prices too. They say sales are less than 1% of 2000 levels. Kodak and Ilford film sales remain profitable. Coca Cola was smart though. They diversified into all sorts of other beverages years ago. Smoothies to water. Where Coke the product may be declining, their healthier drinks will prosper. Heck, a bottle of their Dasani water is still more expensive than the same volume of gasoline. The bottle costs more than the contents I’m sure.

  • T.I.M

    Higher retail prices because the raw materials values increase ?
    The only one that does increase a lot is the lithium (use in batteries).
    Lenses and flash do not contain lithium.
    The oil (plastics materials) is record low.
    I think Nikon is increasing prices because it need more profit (and I agree with that).
    Better profits make healthy manufacturers, better for the customers.

    • Thom Hogan

      Flourine and other more costly materials are being used now. Nano coating isn’t cheap.

      • T.I.M

        Flourine ?
        I used to have a girlfriend named Flourine !

      • Eno

        I can’t figure how is Sigma producing similar or better optics at much lower prices, in the same country with the same per costs materials.

        • Mike

          Sigma has dramatically less overhead. NPS is not for free for example. It’s built into the price of pro gear (what qualifies for NPS anyway). And they have regional offices and sales and tech support around the world. Sigma, on the other hand, doesn’t have pro tech support and has 3rd party distributors regionally. Sigma has a longer warranty which is fine and dandy but Nikon will turn your gear around in a week, Sigma distributors may not even get a part in 2 weeks let alone turn around. Like anything else, you pay with your time or your wallet. Sigma is great, but they are lower priced for a reason. Plus, with their inconsistent reputation prior to the Art series generation, they are forced to buy the market for a while. I’m sure they would love to charge what a Zeiss does.

          • Eno

            Anyway, it’s their problem and they will have to deal with even fewer sales. I’m content that there are very good third party alternatives.

      • PhilK

        Then why no price increases for the longer lenses?

        • Thom Hogan

          They were already repriced.

          • PhilK

            Hmm, recently I presume? I realize some models were recently refreshed.

    • whisky

      rare earths?

      • T.I.M

        Earth is not rare anymore, we found earth-like planets almost daily…

        • whisky

          we think we may have found. not the same.

  • Ritvar Krum

    Nikon keeps making money with lenses (thus feel confident to increase prices), but losing with bodies (all those “refurbs” even for 2015. models)… and that is reasonable – but Sony must have not been in school when this were teached.

    • T.I.M

      Nikon is making the most money on flashes and accessories.
      On a $500 lens, they may make only $50 profit !
      Now, on a $500 hood for a 400mm f/2.8, they probably make $450 profit !

      • Thom Hogan

        Well, I’m not privy to their internal numbers, but I’d tend to guess exactly the opposite of you two.

        Why do I say that? Because the cameras sell out completely and there are only a handful of models. Very maximized volume there.

        Lenses, on the other hand, we 60+ of at any given time and all but a handful sell at under 100k units over a multi-year period. Inefficient.

        Accessories are even worse. Typically Nikon launches them late to the camera they’re for, under produces them, and they go out of stock. Moreover, they get undercut by third parties, so they’re not induced to restock them.

        I’ve written it before: Nikon needs to reconsider what the Nikon DSLR ecosystem is and how that works. Like Apple, they should have core products (DSLRs) that are supplemented by some near-core accessories (a tight, well considered set of lenses), and then encourage third parties to fill in all the gaps through a licensed program.

  • TheRasmus

    From the beginning of 2016 the price of Nikkor 50mm f/1.8G raised up to 230euro here in Bulgaria. It costed 175euro a month ago. More than 30% increate Oo

    • I think the price increase I reported was for the entire EU.

    • Ritvar Krum

      here in Latvia (same level of eanstern european shithole as Bulgaria) 50 1.8G raised like 5 euros – from 175 to 180+.. that is pitty, cuz in december I bought a two minty used 50 1.8G for 120 euro…. if now prices would be 230ero – I could sell them close to 200… oh well – lest wait a few months.

  • Stew Hanniford

    Don’t know how they look themselves in the mirror when they say stuff like that. The global rout and slack demand have caused almost all raw materials to plummet. Shame on anyone who believes them. On top of that a lens is mostly a hollow tube. There some glass which is dirt cheap, and a tube made out of metal. Not much too it. It is the manufacturing costs that make them expensive and if those had increased I would have half believed them. But material costs? Bahhhhhhhh! Too funny.

    • PhilK

      Well I don’t think it is *quite* that simple but you are correct that many raw material prices, and fuel, have been dropping in price precipitously in recent years. (Thom does have a point about costs in Japan generally, eg energy, but see below)

      Personally I view these continuous Nikon price-increase rationales they give with skepticism because it seems like it makes no difference what the currency or raw materials or economic situation is, Nikon finds some rationale to explain why they just raise the prices again and again and again.

      Someone should do a chronological spreadsheet with their direct competitors like Canon (who makes far more of their equipment in Japan, rather than cheaper foreign manufacturing locations, BTW) and so on, and see if Nikon’s pricing increases are in line with their competitors. I’m willing to bet that they are not.

  • JXVo

    It seems the 50 1.8G and 35 1.8G fare the worst on a % basis. Not exactly a lot of glass in these so the increases have definitely been massaged according to factors other than just the ‘material cost’ criterion, which may not even be valid during a commodity slump. I hate the spin. Just be honest. The increases are much more modest than those imposed in Europe.

  • PhilK

    I have to wonder if Nikon thinks that at the moment, with their “PR capital” rising due to the D500/D5 announcement, that they can shuffle in some price increases with less customer backlash.

    Tho it’s not like Nikon doesn’t seem to increase prices like clockwork no matter what the currency, raw-materials, labor or economic situation is at that moment.

    I would be willing to bet that some of their designs/manufacturing could use a bit of rationalization. Seeing some of the teardowns of their lenses, I think they are behind even the 3rd-party makers in some respects when it comes to efficient design.

    For example: most AF lenses now seem to be using a single electronics board at the back of the lens, around the rear element section. Whereas Nikon is scattering chips and boards all around the body of the lenses, along with a bunch of flex-circuits and even wires. Looking at lensrentals teardown of both the Canon and Nikon 35/1.4 lenses, it appears that the Nikon LSIs are so large (at least in that case, and also the 24-70 non-VR) that they could not be fit at the back of the lens. That’s an example of something they should do something about, as it would greatly simplify their lens construction, ease of repair, and presumably, cost to manufacture in the first place.

  • stormwatch

    Nikon is being really funny these days…

    • whisky

      yup, it was an omen. they looked up, saw a ladder, and decided to raise their prices. 🙂

      • stormwatch

        This steady rhytm of autogoals can bring them only before the Jacobs Ladder.

  • RodneyKilo

    Raising prices despite dwindling sales is a short term approach adopted by management seeking to prop up their own position for the short term at the expense of long term corporate viability and shareholder return.

    If your comp for this year is based on numbers for this year, you care about your bonus for this year. And if you can stretch it a year beyond that, fine. Your horizon is not longer, because your boss’s horizon is not longer.

    Shareholders (owners) invested in a company that they may want to be around for another few decades? Sure, whatever.

  • nicolaie

    Well, they’ve already raised the prices by as much as 30% in Romania, so screw Nikon. They’re just scared by their falling sales and they thought they’d make their overpriced lenses even more expensive to compensate. Some Sigma lenses are better and less than half the price. The 85 1.4G and 35 1.4G are now more than twice the price of the Sigma 85 1.4 and 35 1.4, laughable. For the price of the nikkor 85 f/1.4G I can almost get 2x 35 f/1.4 and a 85 f/1.4 Sigma !

  • “The reason for the new pricing is greed.”

  • John Hernlund

    I live in Japan and I have to say that the actual retail price increases have been more extreme in many cases than the price increases listed in the official document by Nikon. I have seen price increases over 30% in some cases where Nikon only imposes 10% on the list. This is an unfortunate move that puts pressure on their remaining loyal customers, many are already thinking about moving to Canon, as numerous others have already done. Perhaps it shows a ham-fisted style of business management, which is typical in Japan (for example, read about the collapse of Sanyo).

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