Can bike prices keep going up?

[Mikej]

Or even stay where they are? With everything else falling through the floor, gas included, do bike companies think they can survive with current pricing? In the winter? I mean, this economy may do in 1/2 of the LBS's out there, plus a number of small builders. Are you guys holding back from buying becase of the current situation w/ the stock market / economy? Or because bike stuff rivals automotive racing components in price?

[soulspinner]

Only until too few buy the stuff-then itll go down fast...

[Sandy]

I am retired. My house is paid for. No chidren at home. No debt. Had a large portion of my money in cash. Have several incomes. Sold some of what I had left.Sounds great. But whatever equities my wife and I own have decreased precipitously, markedly, and will probably continuue to do so. One major investment I have is decreasing in value almost every day.Had a significant amount of money in a money market. Found out that it has been seized by federal regulators and I can't touch it. Will get 31-32% of the money in October. Don't know when I will get more or how much I will get.

So let's look at the purchaser side- I KNOW that I am VERY FORTUNATE because I still have a decent amount of equity left (although lessened a great deal). I have no kids to put through college, am already retired, don't have any car payments, house payments, costs of raising a family, will not be buying a new house,....Yet I know that I would not go out and get a new bike. Certrainly not an expensive one. It is a feeling/perception I have about the economy and my own personal financial change. It does not instill confidence. My expection is it will get worse. I feel pessimism. With that type of personal feeling, I would feel uncomfortable in making a large bike purchase with all the negativity in the economy and no apparent viable solution in place. My equity has diminished, will continue to do such, I feel, and hence at this time, I am trying to literally save what I have left. Hence, no bikes for me.

Now consider most others- Families to feed, college tuitions to pay or prepare for, house payments on a home with shrinking value, equities/retirement monies probably continually decreasing, distinct possiblity of being laid off from work because of the poor business environment,...... A remarkable scarey economy. A depression? That does not instill confidence or enthusiasm to purchase big ticket itiems, plain and simple. Many couples are having immense problems in paying their mortgage and are seeing great decreases in the equity of their house. Forget a bike. Just be able to pay the bills would be a major accomplishment.

From the shops perspective- Business is probably down as more and more people are trying to keep what they have. Money is extremely tight and most bike shops will probably have increased difficulty in obtaining credit as there is so little trust and confidence in the credit markets, even among banks. Hence credit is not only difficult to get, but whatever is available is only available to companies with stellar credit history and at signifiantly higher rates. It will be more difficult for bike shops to keep a large inventory and expansion will be severely limited. Hence, unless there is some remarkable change, I would assume less bike purchases, less dollars to bike shops, and genuine presssure on some to remain open.

A bike shop owner get hit from two sides- His or her business demands, and his or her personal demands. Bike shop owners normally have a shop because they love cycling, not because of a superior profit structure in their business. I hope that most of them survive if in fact the solutions to the economy's problems take a long time to be realized.


Sandy

[Smiley]

I spoke to my LBS shop contacts and the new 09 stuff is so expensive he says they will not need to discount the 08 stuff at all since that close out stuff ( which is pretty much the same stuff with a different color) will look really good pricewise as compared to the 09 stuff.

[znfdl]

This is one reason why I like Ti frames. If I want a new look, I just get the frame repainted......

[Sandy]

I spoke to my LBS shop contacts and the new 09 stuff is so expensive he says they will not need to discount the 08 stuff at all since that close out stuff ( which is pretty much the same stuff with a different color) will look really good pricewise as compared to the 09 stuff.

Maybe yes. Maybe no. They still have to sell it. Once they do, they must also replace their inventory at higher prices, compared to what they paid for the older inventory. On the purchae side- If you spent $50,000 on inventory and sold all of it, and must replace it by paying $55,000 for it, you will have to come up with $5,000 additional money or you can't buy as much. That means that you may using a larger portion of your profits to make new purchases.


Sandy

[William]

Well,

A possible bright side for the LBS's might be in the low to mid level lines....increasing oil prices might help move some poeple to buy a bike to reduce the cost of buying gasloline. One can hope anyway.



William

[Sandy]

This is one reason why I like Ti frames. If I want a new look, I just get the frame repainted......

If you want a new look, get yourself painted. :rolleyes: :)


Picasso

[Joellogicman]

Or even stay where they are? With everything else falling through the floor, gas included, do bike companies think they can survive with current pricing? In the winter? I mean, this economy may do in 1/2 of the LBS's out there, plus a number of small builders. Are you guys holding back from buying becase of the current situation w/ the stock market / economy? Or because bike stuff rivals automotive racing components in price?

First, not all bikes and component groups are sky rocketing. Ti and carbon fibre are the main culprits. Ti and carbon have been in high demand for military and aviation projects. Maybe this will die down some with the slowing ecomony and possibly some global sanity about solving differences. I think the former is more likely than the latter.

Second, teel and aluminium bikes are still good deals. Components meant for commuting or general recreational riding are not nearly so expensive as those with competition in mind. In fact, increased competition in these once relatively ignored markets by the big companies have yielded some pretty decent deals out there.

Finally, those of us can give up cars as I have find that even with stagnant salaries, spiking food and commodity costs, and spiraling 401(k) and IRAs, there is still sufficient money to buy better bikes and components without breaking the budget.

[johnnymossville]

This is one reason why I like Ti frames. If I want a new look, I just get the frame repainted......


Exactly what I've been thinking lately. Steel and Ti frames are great in that way. You can never underestimate the power of a new paint job! :)

[R2D2]

First, not all bikes and component groups are sky rocketing. Ti and carbon fibre are the main culprits. Ti and carbon have been in high demand for military and aviation projects. Maybe this will die down some with the slowing ecomony and possibly some global sanity about solving differences. I think the former is more likely than the latter.



You forgot tires...........
They are really going up from what I've seen.

[Lifelover]

Exactly what I've been thinking lately. Steel and Ti frames are great in that way. You can never underestimate the power of a new paint job! :)

Aluminum and CF can be repainted as well.

[Charles M]

Nothing related to mid and upper level products in bicycle production has become far cheaper...


None of the raw materials are a lot cheaper and, regardless of what you may think, Bicycle prices (samoe models) for most companies have, in most cases, not increased as much as raw materials have.

Neither are the labor pools cheaper. China's labor costs have not dropped (and probably will not) as their work force and society advances, expects and demands more. Labor in the US isn't cheap and Labor in Europe has climbed...



The fact that there have been "bubbles" in other sectors and crazy increases in commodities doesn't have much to do with bikes...

[Ti Designs]

I watched the debate last night, I almost fell off my chair when Obama said the american public was going to have to make sacrifices, and "stop driving big gas guzzlers". He wants to take something from the american public which they think is their right - it's every american's right to drive something so large it can be seen from space and gets 8 MPG going down hill. Look it up, it falls under "all men are created equal", and the guy next door has an Escalade with 22" chrome wheels and the towing package. Someone should tell Obama that taking things away from the american people is a sure way to lose and election...

So what's my point? The bike market is very much the same, once you give people something you can't just take it back. When I started in the bike industry Schwinn had the World Sport, a steel bike with down tube shifters at around $200. At some point aluminum started taking over the market, but the inexpensive bikes remained steel. Then STI came along and slowly the price of an entry level bike came up to reflect that everybody needs an aluminum frame with STI. Now the same thing is going on with carbon fiber. I like the Specialized Allez from past years, good frames, good values, good bikes. But now carbon fiber is the gotta have it material, so the emphasis switches to their tarmac. They now have twice as many tarmac models and a third of the Allez offerings. And the price has gone up.

[soulspinner]

Well,

A possible bright side for the LBS's might be in the low to mid level lines....increasing oil prices might help move some poeple to buy a bike to reduce the cost of buying gasloline. One can hope anyway.



William

My closest LBS has indeed already seen commuter sales go up a lot.

[Mikej]

I spoke to my LBS shop contacts and the new 09 stuff is so expensive he says they will not need to discount the 08 stuff at all since that close out stuff ( which is pretty much the same stuff with a different color) will look really good pricewise as compared to the 09 stuff.

The 7800 DA 10 is a bargain . Never thought of it like that.

[SoCalSteve]

The 7800 DA 10 is a bargain . Never thought of it like that.

I have a Dura Ace 7800 10 Group at a bargain price for sale...

Just sayin'

Steve

[johnnymossville]

Aluminum and CF can be repainted as well.

Of course they can, I've painted my Cannondale a few times, but I'm kinda leary of stripping down my carbon fiber frame and starting over. I guess it can be done, but definitely not as easily as the others.

[Tobias]

This is one reason why I like Ti frames. If I want a new look, I just get the frame repainted......Yes, and if the economy gets bad enough we won't care much about looks. ;) Just having a nice solid bike to ride will be a joy for me. Besides, since Ti won't rust we can put off repainting for decades without hurting the frame.

[Ken Robb]

Now the bike industry is a lot like the auto industry in the 1950's: small mostly cosmetic changes every year for planned obsolescence to encourage people to replace their old cars every few years. Of course if you didn't live in a dry climate the cars rusted out in 5 years anyway.

In the 1990's motorcycle manufacturers came out with new models every year and usually the only change was "BNG"---Bold New Graphics".

Over time these motorized vehicles did become demonstrably better performers and nobody could really claim that their 10 year-old Civic vehicle performed as well as a new one. But the difference between a 10 year old Legend and any new bike you can name is, for me, marginal.

I am amazed by the number of really good bikes available around $1000 where trickle down technology has really paid off for consumers. I would expect an increase in the percentage of new bike sales in this lower price range and a decrease in the sales of top-end models as customers analyze cost/value and realize that the point of severely diminishing returns certainly kicks in before $1800.

I have no doubt that lots of high-end bikes are bought by folks who just want to look like pros. How else can we account for adults wearing "team kit" for teams they have never even met? With the current economy will they still borrow money for a pro-level bike? Will they settle for a middle of the line model that will really serve them just as well practically speaking? Will they not buy anything either because they can't afford anything at all or because they don't want to look like they can't afford a pro bike? Or would a mid-level bike indicate to on-lookers that they aren't really Cat 1 riders? Stay tuned.

As a personal note: when I rode my beautiful Legend w/10 spd. Dura Ace and carbon cranks I almost always wore spandex and bike jersies and I would try harder to hang with other riders than when I rode my lugged steel Rambouillet in hiking shorts and tee shirts. See, even I get some motivation from appearance-----but I'm still old and slow. :)

[Ahneida Ride]

As we create more and more frns (fed reserve non notes) outa
thin air (and the incredible preserve collects interest on them!)
prices will continue to go ballistic.

Too many frn chasing too few resources. My Legend doubled in 7 years.
Expect the situation to exacerbate. In 14 years from now, a Legend
will be 28K. Eventually, the system will implode. Recent events is just a
taste.

The advantages of frn-acation. Don't blame Ben. We have fiat money
controlled and manipulated by bankers for bankers. A few profit immensely,
the rest can't even afford a Serotta anymore.

[fiamme red]

I watched the debate last night, I almost fell off my chair when Obama said the american public was going to have to make sacrifices, and "stop driving big gas guzzlers". He wants to take something from the american public which they think is their right - it's every american's right to drive something so large it can be seen from space and gets 8 MPG going down hill. Look it up, it falls under "all men are created equal", and the guy next door has an Escalade with 22" chrome wheels and the towing package. Someone should tell Obama that taking things away from the american people is a sure way to lose and election...But note that he didn't tell people to "drive less." Now that would be the sure way to lose the election.

[benb]

In the 1990's motorcycle manufacturers came out with new models every year and usually the only change was "BNG"---Bold New Graphics".


Not really true though I agree with the rest of your statement.

Cars have made odd progress, not much on economy, but they were able to gain weight, safety, and performance with their efficiency gains.

Nearly all motorcycles have changed drastically.

On sportbikes power to weight ratio has at least doubled since the mid 1990s, brakes, suspension, frame technologies, and tires have seen huge improvements. Fuel injection has replaced carbs.

Cruisers have not seen massive increases in performance (especially power to weight) but they have seen big increases in reliability, braking, and suspension performance. And they've seen the same user-friendly advances in fuel injection.

All motorcycles have seen a huge increase in build quality as well..

IMO both cars and especially motorcycles have improved far more drastically since the mid 1990s then bicycles have.

[djg]

I have no doubt that lots of high-end bikes are bought by folks who just want to look like pros. How else can we account for adults wearing "team kit" for teams they have never even met? With the current economy will they still borrow money for a pro-level bike?

Ouch. Maybe they're just fans?

The only time I wear a full team kit is when it's really the kit of my own (local, amateur) team. I've met 'em. I'm signed up and all. Raced for them this past Sunday, to the best of my recollection. OTOH, I also have an old CSC jersey, because I liked some of the riders (and actually have met a few of last year's crop, although I don't really know any of them at all) and, frankly, because I got a really, really good deal on a nice Assos jersey when I got it. OTOH, I never imagine that I look like a pro, certainly not to anybody who knows what a pro looks like. I'm a stocky middle-aged hack and there's no outfit available to make me look like a pro bike racer. I'm ok with it.

Not borrowing money for a pro-level bike or any other, however -- I don't borrow money for discretionary spending on consumer goods, except in the sense that I use a credit card for convenience (and miles), knowing that I'll pay the bill promptly when it comes to avoid onerous interest and fees.

The LBS looks less crowded than it did recently, and I'm not sure it's just the weather. I have to think that many folks will curb their spending, whether it's for "pro" gear or mid-range kit.

[Pete Serotta]

Rubber goods (tires and tubes) have gone up...> SPECIALIZED just hit their dealers in the last 6 weeks.... Get what you need now for it will surprise you - the new sale price.


You forgot tires...........
They are really going up from what I've seen.

[Joellogicman]

Rubber goods (tires and tubes) have gone up...> SPECIALIZED just hit their dealers in the last 6 weeks.... Get what you need now for it will surprise you - the new sale price.

I have an account with Schwalbe and bought up a number of spares. Tires will last a long time when stored correctly.

[deechee]

I think the bike industry survives. I'm not talking about people like us; I'm talking a person who's barely able to ride a bike wearing a 100$ helmet.

Anyway, I was really surprised at how much even the profile-designs stuff went up in price from '08 to '09. I also noticed Giro prices are up across the board, including models like the Atmos which have been around for a while.

[Pete Serotta]

and he is 100+ percent reliable.......per me at least. :)

I have a Dura Ace 7800 10 Group at a bargain price for sale...

Just sayin'

Steve

[cmg]

gas prices are only going to be down long enough to get McCain elected, after that they'll go back up to $3.89 a gallon and above. sorry, don't beleive the resent credit crunch has had an effect on gasoline prices, but the desire to elect a president that will let them drill in once restricted areas is.

[Pete Serotta]

think McCain needs a miracle before NOV besides cheaper gas. The debate last night did not sling shot him ahead and he was giving houses away then ;) ;)


gas prices are only going to be down long enough to get McCain elected, after that they'll go back up to $3.89 a gallon and above. sorry, don't beleive the resent credit crunch has had an effect on gasoline prices, but the desire to elect a president that will let them drill in once restricted areas is.

[alancw3]

i see hard times on the horizon for boutique bike builders and for that matter any high end bike builder or component maker. imho!

[soulspinner]

Look at the exchange rate. Looked at the Baum site and he pulled pricing as the Aussie dollar is down to 67 cents,20 days ago it was in the low 80s. Canadian dollar under 90 cents. Lotsa ways to stretch yer buck...hang on :bike:

[Ahneida Ride]

The Icelandic Icepuck went from 50 Icepucks to the frn to 107 Icepucks
to the frn.

Think we got it bad ? ;)

Fractional reserve banking produces 10 frns in liabilities for ever 1 frn
in deposits. A 10 to 1 default ratio.

[palincss]

I watched the debate last night, I almost fell off my chair when Obama said the american public was going to have to make sacrifices, and "stop driving big gas guzzlers". He wants to take something from the american public which they think is their right - it's every american's right to drive something so large it can be seen from space and gets 8 MPG going down hill. Look it up, it falls under "all men are created equal", and the guy next door has an Escalade with 22" chrome wheels and the towing package. Someone should tell Obama that taking things away from the american people is a sure way to lose and election...

Perhaps you haven't noticed, but since gas hit four bucks a gallon, sales of big gas guzzlers have tanked and the bottom's fallen out of their resale value. This is something the American public and the car makers already know.

[steelrider]

Forget about new bike prices. What about the value of used bikes! They have fallen like a lead balloon. I have a bunch of stuff that I am keeping on ice until the market improves.

[Ken Robb]

Forget about new bike prices. What about the value of used bikes! They have fallen like a lead balloon. I have a bunch of stuff that I am keeping on ice until the market improves.

Or what freezes over? :rolleyes:

[Karin Kirk]

Or what freezes over? :rolleyes:

Iceland, perhaps?

[ti_boi]

Actually you need to ask yourself what the market looks like....and the market for expensive bikes....vs....functional bikes....might look very different than a few years ago....we are going through a major shift in where jobs are and what they are able to pay.

[paulandmonster]

im going to buy new top of line colnago campy throughout ill go with extreme c not needing extra stiffness as im 155 lbs. ill probably get parts from overseas their cheaper and its winter so i can wait the extra weeks if its thats long. my car will be paid off soon so maybe some more bike stuff and insurance. as far as economy and next president as much as it drives me nuts not much i can do about so i dont sweat it. i dont own a house dont really want to. no kids and im getting to old for that so my life is simple. im not going to ride a lesser bike because of cost ill just have to wait longer till i get it. its funny as far as team kits i know alot of teams riders etc. personally and the only kits i wear are the ones they give me and even then i feel wierd. it wasnt until recently that id even wear a trophy jersey ie yellow which was a gift but for some odd reason still cant wear the rainbow unless undercoat.

[William]

Perhaps you haven't noticed, but since gas hit four bucks a gallon, sales of big gas guzzlers have tanked and the bottom's fallen out of their resale value. This is something the American public and the car makers already know.

;)


.

[mikki]

This is one reason why I like Ti frames. If I want a new look, I just get the frame repainted......


My ti and carbon frame is less than a year old so I am still enthralled with it, but it is such a great idea that all I will need to do is having my Holland painted (Joe Bell of course) if that "bike lust" strikes me down the line.

[johnnymossville]

;)


.


Man, Al Gore has really blown up since then hasn't he?