Automotive Importing Industry

Vehicle Importing

 

FX HEDGING FOR VEHICLE IMPORTERS AND EXPORTERS
Marketsforu democratises foreign currency hedging through technology.
Like any business, importing and exporting motor vehicles is not immune to currency rate FX) fluctuations. This is evident by the recent statistics showing that in a post-Brexit environment 71% of businesses now see currency volatility as the single biggest threat to their business.
Challenge
Currently, no easy and cost-effective solution exists for car dealers to protect your foreign currency cash flows stemming from buying and selling cars from the UK, Japan and the rest of the world. Solutions offered by FX brokers and banks, fit for institutional customers, are not fit for purpose for your car dealing business.
Currency Hedger’s unique new Digital Treasury Manager enables car dealers to manage your international business more efficiently.
Example of how hedging helps a car importer
In Feb 2018 you have agreed a deal to import cars from Japan worth ¥250m, which you have to pay in June. Here’s how you can protect your margins via hedging:

SPOT FX

Importing cars worth: ¥ 250,000,000

In Feb 2018 the EUR/JPY exchange rate is 135.45. The cost in EUR is €1,822,157

 

By mid June the EUR has weakened to 127.35. The cost has now spiked to €1,963,094

 

Your loss is €140,936

 

FX OPTION

Cost of Option Feb 2018: €42,817

Guarantees FX rate at least: 135.45

 

The EUR has gotten weaker so your revenue from your costs from your car imports has been protected

 

Your gain is €98,119

 

Cost-Effective Solution

Your Car Dealing Business

Currency Hedger’s unique new Digital Treasury Manager enables car dealers to manage your international business more efficiently.

  • Date: October 28, 2018
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