Rumors?

Thomps

To those of you in the know, or even those who enjoy speculating:

Why do I keep hearing/reading about imminent price hikes on
bikes and/or components? Are they true? I'd like to buy new,
and am wondering whether to wait until this winter, or if
I'd be wiser to act sooner.

Thanks all,

Thomps

Tom Keats

In article <10duvrhku3vbb8f@corp.supernews.com>,
"Thomps" <mthompso1@isd.net> writes:
> To those of you in the know, or even those who enjoy
> speculating:
>
> Why do I keep hearing/reading about imminent price hikes
> on bikes and/or components? Are they true?

http://www.singletrackworld.com/article.php?sid=1300

A Google search on 'bicycle price increases steel shortage'
would turn up other info sources, including bikebiz.com.

cheers, Tom

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Just Zis Guy

On Sun, 27 Jun 2004 21:16:22 -0500, "Thomps" <mthompso1@isd.net> wrote
in message <10duvrhku3vbb8f@corp.supernews.com>:

>Why do I keep hearing/reading about imminent price hikes on
>bikes and/or components?

Because it's likely true? Just guessing. There is a
steel shortage in Taiwan - they've even taken to
stealing drain covers.

As to whether to defer purchase, I reckon bikes are cheaper
now than they have ever been. Even if they go up a bit
they'll still be cheap in real terms.

My tourer cost £1500 in 1985. For the same money now I could
buy a somewhat better specified bike from Chas. Roberts,
say. That's the same cash money, not adjusted for inflation.
What car could you buy today for the 1985 price of a
standard Ford?

So buy when it suits your budget. But if you can, get one
that's in stock, or you might have a long wait :-)

Guy
--
May contain traces of irony. Contents liable to settle after
posting. http://www.chapmancentral.co.uk

88% of helmet statistics are made up, 65% of them at
Washington University

Nora Lenderby

"Just Zis Guy" writes:

> My tourer cost £1500 in 1985. For the same money
> now I could buy a somewhat better specified bike
> from Chas. Roberts, say. That's the same cash money,
> not adjusted for inflation.

My husband bought a Dawes Super Galaxy in the mid eighties for £350. His Claud Butler Italia with Campagnolo gears, purchased just a couple of years previously, was £259. We still have the receipts. A friend of the family had a fancy Mercian with all the trimmings. We were aghast that it cost him £500.

Perhaps your old tourer was gold plated!

N. Lenderby (Mrs)

Michael J . Kle

On Mon, 28 Jun 2004 10:57:50 +0100, "Just zis Guy, you know?"
<outlook.bugs@microsoft.com> wrote:

>On Sun, 27 Jun 2004 21:16:22 -0500, "Thomps"
><mthompso1@isd.net> wrote in message
><10duvrhku3vbb8f@corp.supernews.com>:
>
>>Why do I keep hearing/reading about imminent price hikes
>>on bikes and/or components?
>
>Because it's likely true? Just guessing. There is a
>steel shortage in Taiwan - they've even taken to
>stealing drain covers.

I'm in the outsourcing business, and I haven't seen anyone
doing that in Taiwan. However, in China, I did see a foundry
scrap heap and guys were cutting up old steam heat
radiators, car parts, sheet metal cabinets, etc., anything
and everything - melting them for castings.

Here, I put a pic I took of that scrap heap on my site so
you can see
it:

http://www.asiancastings.com/images/scrap_heap.jpg

Steel was going up some time ago. But recently I have not
had any suppliers give me a raw materials cost increase.

Michael J. Klein mklein@mousepotato.com Dasi Jen, Taoyuan
Hsien, Taiwan, ROC Please replace mousepotato with
asiancastings
---------------------------------------------

Pbwalther

I rather doubt that an increase in metal prices would
noticeably affect the price of a bicycle. Steel is sold by
the ton and I checked the price for carbon steel and it
goes at less then $300 per ton. Now that isn't cromolley
but a bike frame weighs what? 4 lbs? So you have about $.60
in the price of steel in a bike. Even if the price of steel
goes up 10 fold, that is only going to add about $6 to the
price of the bike.

If the price of bikes goes up, it will be other things that
are acting then the price of metals.

Mike Jacoubowsk

> To those of you in the know, or even those who enjoy speculating:
>
> Why do I keep hearing/reading about imminent price hikes
> on bikes and/or components? Are they true? I'd like to buy
> new, and am wondering whether to wait until this winter,
or
> if I'd be wiser to act sooner.
>
> Thanks all,

The bicycle industry is desperately *trying* to increase
prices, since most of it's awash in red ink. That's nothing
new, and prices have been held down by an oversupply
situation. However, wholesale prices from OEMs have, for the
first time, been ticking upward significantly. Most of this
is due to increased demands from China, which is beginning
to make itself known as a very large (and rapidly-growing)
consumer of raw materials. Some feel that the demand from
China will have far-reaching inflationary effects throughout
most industries. However, much of the increased costs from
China will be offset as production is still far cheaper
there than elsewhere, so as more of it moves from higher-
priced locales to China, prices are kept down (despite the
fact that Chinese-manufactured goods are going up).

But none of this is all that relevant to someone wanting
a new bike. If you have a need for one now, you'll get
to make use of it for several months of great summer
riding. That adds significant value to the don't-wait
side of the equation!

--Mike-- Chain Reaction Bicycles
www.ChainReactionBicycles.com

Bfd

"Mike Jacoubowsky" <mikej1@ix.netcom.com> wrote in message news:<3k8Ec.4342$5g3.4047@newssvr27.news.prodigy.com>...
> > To those of you in the know, or even those who enjoy
> > speculating:
> >
> > Why do I keep hearing/reading about imminent price hikes
> > on bikes and/or components? Are they true? I'd like to
> > buy new, and am wondering whether to wait until this
> > winter,
> or
> > if I'd be wiser to act sooner.
> >
> > Thanks all,
>
> The bicycle industry is desperately *trying* to increase
> prices, since most of it's awash in red ink. That's
> nothing new, and prices have been held down by an
> oversupply situation. However, wholesale prices from OEMs
> have, for the first time, been ticking upward
> significantly. Most of this is due to increased demands
> from China, which is beginning to make itself known as a
> very large (and rapidly-growing) consumer of raw
> materials. Some feel that the demand from China will have
> far-reaching inflationary effects throughout most
> industries. However, much of the increased costs from
> China will be offset as production is still far cheaper
> there than elsewhere, so as more of it moves from higher-
> priced locales to China, prices are kept down (despite the
> fact that Chinese-manufactured goods are going up).
>
> But none of this is all that relevant to someone wanting a
> new bike. If you have a need for one now, you'll get to
> make use of it for several months of great summer riding.
> That adds significant value to the don't-wait side of the
> equation!
>
Mike Thanks for the insight. I agree that if you want a new
bike NOW, get it, don't wait! However, if the Chinese are
increasing their costs, how soon will it be before these
same mfrs will move their production facilities over to
other "lower-cost" countries like maybe the Philippines or
Vietnam or even Cambodia....

Luigi De Guzman

On 29 Jun 2004 09:57:33 -0700, bfd853@yahoo.com (bfd) wrote:

>Thanks for the insight. I agree that if you want a new bike
>NOW, get it, don't wait! However, if the Chinese are
>increasing their costs, how soon will it be before these
>same mfrs will move their production facilities over to
>other "lower-cost" countries like maybe the Philippines or
>Vietnam or even Cambodia....

What's increasing is raw materials costs, particularly
steel, and from what I gather, that seems to be more or less
global as Chinese consumption rises.

Labor costs in China are still fairly low; don't let the
propaganda fool you--the interior of the country is
still largely undeveloped, and the flood of peasants
migrating into the coastal cities makes for a buyers'
market in laborers.

Of course, as a Filipino, I'd love to see more action move
into the ASEAN area and particularly into the Philippines.
I'd be interested to see how costs stack up; I suspect the
Chinese have other advantages other than their low labor
costs that make manufacturing cheaper there--at least for
metalbashing industries.

-Luigi

www.livejournal.com/users/ouij photos, rants, raves

David Kerber

In article <nf83e0lkkkumac8m8p804tumrn6p284q6b@4ax.com>,
luigi12081 @cox.net says...
> On 29 Jun 2004 09:57:33 -0700, bfd853@yahoo.com
> (bfd) wrote:
>
> >Thanks for the insight. I agree that if you want a new
> >bike NOW, get it, don't wait! However, if the Chinese are
> >increasing their costs, how soon will it be before these
> >same mfrs will move their production facilities over to
> >other "lower-cost" countries like maybe the Philippines
> >or Vietnam or even Cambodia....
>
> What's increasing is raw materials costs, particularly
> steel, and from what I gather, that seems to be more or
> less global as Chinese consumption rises.
>
> Labor costs in China are still fairly low; don't let the
> propaganda fool you--the interior of the country is still
> largely undeveloped, and the flood of peasants migrating
> into the coastal cities makes for a buyers' market in
> laborers.
>
> Of course, as a Filipino, I'd love to see more action move
> into the ASEAN area and particularly into the Philippines.
> I'd be interested to see how costs stack up; I suspect the
> Chinese have other advantages other than their low labor
> costs that make manufacturing cheaper there--at least for
> metalbashing industries.

Ease of transportation of raw materials (coal, iron ore,
etc) from the mines to the factories probably being a major
one. The terrorist activities in certain parts of the
Philippines doesn't help their prospects either, I'm sure.

--
Remove the ns_ from if replying by e-mail (but keep posts in
the newsgroups if possible).

Mike Jacoubowsk

> Thanks for the insight. I agree that if you want a new
> bike NOW, get it, don't wait! However, if the Chinese are
> increasing their costs, how soon will it be before these
> same mfrs will move their production facilities over to
> other "lower-cost" countries like maybe the Philippines or
> Vietnam or even Cambodia....

It's inevitable that production will continue to shift
towards emerging 3rd-world countries as a means to save
money. However, the Philippines might not be as likely as
many others, since they've become relatively stagnant in
their "emergence." One would have thought that the
Philippines would have evolved into a major manufacturing
center long ago, given their relative proximity to countries
that have long felt the effects of improving (and expensive)
living standards. Probably just shows my ignorance of the
Asian economic situation.

Perhaps the appeal of China is that it's SO vast that it
would appear to offer almost limitless potential as a
manufacturing center. Further, if you can work with the
present government, the thought might be that things can
only get better down the road (or at least not a situation
where you're concerned that a sudden revolution might come
about, leaving your investment worthless as the government
takes it over).

--Mike Jacoubowsky Chain Reaction Bicycles
www.ChainReaction.com IMBA, BikesBelong, NBDA member

"bfd" <bfd853@yahoo.com> wrote in message
news:9411a749.0406290857.43a6080c@posting.google.com...
> "Mike Jacoubowsky" <mikej1@ix.netcom.com> wrote in message
news:<3k8Ec.4342$5g3.4047@newssvr27.news.prodigy.com>...
> > > To those of you in the know, or even those who enjoy
> > > speculating:
> > >
> > > Why do I keep hearing/reading about imminent price
> > > hikes on bikes
and/or
> > > components? Are they true? I'd like to buy new, and am
> > > wondering whether to wait until this
winter,
> > or
> > > if I'd be wiser to act sooner.
> > >
> > > Thanks all,
> >
> > The bicycle industry is desperately *trying* to increase
> > prices, since
most
> > of it's awash in red ink. That's nothing new, and prices
> > have been held down by an oversupply situation. However,
> > wholesale prices from OEMs
have,
> > for the first time, been ticking upward significantly.
> > Most of this is
due
> > to increased demands from China, which is beginning to
> > make itself known
as
> > a very large (and rapidly-growing) consumer of raw
> > materials. Some feel that the demand from China will
> > have far-reaching inflationary effects throughout most
> > industries. However, much of the increased costs from
China
> > will be offset as production is still far cheaper there
> > than elsewhere,
so
> > as more of it moves from higher-priced locales to China,
> > prices are kept down (despite the fact that Chinese-
> > manufactured goods are going up).
> >
> > But none of this is all that relevant to someone wanting
> > a new bike. If
you
> > have a need for one now, you'll get to make use of it
> > for several months
of
> > great summer riding. That adds significant value to the
> > don't-wait side
of
> > the equation!
> >
> Mike Thanks for the insight. I agree that if you want a
> new bike NOW, get it, don't wait! However, if the Chinese
> are increasing their costs, how soon will it be before
> these same mfrs will move their production facilities over
> to other "lower-cost" countries like maybe the Philippines
> or Vietnam or even Cambodia....

Luigi De Guzman

On Thu, 01 Jul 2004 06:51:37 GMT, "Mike Jacoubowsky/Chain Reaction
Bicycles" <MikeJ@ChainReaction.com> wrote:

>> Thanks for the insight. I agree that if you want a new
>> bike NOW, get it, don't wait! However, if the Chinese are
>> increasing their costs, how soon will it be before these
>> same mfrs will move their production facilities over to
>> other "lower-cost" countries like maybe the Philippines
>> or Vietnam or even Cambodia....
>
>It's inevitable that production will continue to shift
>towards emerging 3rd-world countries as a means to save
>money. However, the Philippines might not be as likely as
>many others, since they've become relatively stagnant in
>their "emergence." One would have thought that the
>Philippines would have evolved into a major manufacturing
>center long ago, given their relative proximity to
>countries that have long felt the effects of improving (and
>expensive) living standards. Probably just shows my
>ignorance of the Asian economic situation.

At the risk of going far, far off-topic here:

Proximity or exposure to higher standards of living has
little to do with the underlying structural problems in the
country. This would be akin to arguing that Watts'
proximity to Hollywood should have made it a very affluent
district by now.

The Philippines lags behind other ASEAN economies because
of, among other things:

1) Bad governance: Doing business there is notoriously
difficult for overseas firms; they are in particular
hamepered by constitutional provisions against the
foreign ownership of land.

2) An entrenched landed elite. The landed elite class also
happens to control most of domestic industrial
activity; they're rolling in so much money from their
rents that there is basically zero incentive for them
to compete globally.

As regards this, my father always likes to tell the story of
San Miguel Beer--once the premier beer in Asia, shipped and
available everywhere, especially where U.S. forces went. In
Hong Kong in the seventies, said Dad, everybody drank "Sanee
Mig" as they said in the local pidgin. Now, San Miguel has
lost regional market share to other players: Tiger, Singha,
Tsingtao--and to global ones, like Carlsberg. The
corporation, publically-listed but closely-held by the
Cojuanco family, didn't and doesnt' do much about the
situation, since they seem to be satisfied only with
domestic Philippine consumption.

3) Poor political stability, at least when compared to its
other ASEAN member-states. Unconsolidated democracy, in
this respect, is far more of a liability to an emerging
economy than autocratic developmental-statism. It's very
difficult to argue with Singapore and Malaysia's parallel
success over the past 40 years, despite or even because
of strong authoritarian rule. A simmering insurgency in
Mindanao and a sporadically-active armed Communist
movement discourage foreign investors--never mind that
the worst of the fighting is concentrated in few
districts.

In sum, the Philippines is twenty to thirty years behind
Singapore, Indonesia, Malaysia and Thailand. In the 1960s,
the Philippine economy was by far the most developed and
most productive of the original ASEAN members. Twenty years
of abusive and corrupt rule under Ferdinand Marcos drained
the public treasury and bankrupted the economy. For the
Filipino and the historian, there's a bitter irony in this:
Marcos had first come to power pledging to break the power
of the traditional politicians (the sons of that same landed
elite that had, in their turn, collaborated with Spain,
America, and Japan), and mobilize the country for
development as part of a "New Society." The difference was
that, unlike Lee Kwan-Yew's enlightened and largely benign
developmental statism in Singapore, Marcos' kleptocracy
actually set the country back.

I'd love to see things change for the better in my lifetime,
and the lifteime of my cousins. But for many of us, the only
option is really emigration.

-Luigi

Tom Keats

In article <20040628091532.13624.00000647@mb-m12.aol.com>,
pbwalther@aol.com (Pbwalther) writes:
> I rather doubt that an increase in metal prices would
> noticeably affect the price of a bicycle.

Same here. But I consider the possibility that shortages of
raw materials can lead to shortages of finished product --
effectively increasing demand over supply, thereby driving
up prices. But I might be wrong, or overly simplistic. I'm
certainly no economist. I prefer to leave such figuring up
to the academia nuts :-)

cheers, Tom

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