Bicycle makers offer some clues about inflation

[HenryA]

https://www.wsj.com/articles/is-infl...=WTRN#cxrecs_s

Sorry its behind a paywall but worth trying to find a way around.

A little fair use snippet:

“For a glimpse at why inflationary pressures aren’t likely to ease anytime soon, consider the bicycle.

Bike prices in the U.S. and Europe rose sharply at the start of the pandemic because of booming consumer spending and snarl-ups in global supply chains that meant long delays and higher costs for manufacturers.

Now, manufacturers are working on building bikes for 2022 in a continuing environment of economic uncertainty—with more questions added recently by the emergence of the Omicron variant of the coronavirus. Today’s rampant demand and strangled supply are already pushing next year’s prices higher.”

[prototoast]

If you're blocked by the Paywall, try this link: https://www.wsj.com/articles/is-infl...hare_permalink

[skitlets]

Shipping a container full of parts from China costs him around $20,000, Mr. Thorpe says. It used to cost $4,000.

!!!!

[pasadena]

shipping containers are up to $25k per
another problem is they are diverting ships full of empty containers to the US, where they can grab that cash. Other countries have to wait...

auto industry is changing up to purposely undersupply demand. Post chip-shortage, it's not going to change. They will keep the prices up.

[reuben]

Originally Posted by skitlets

Shipping a container full of parts from China costs him around $20,000, Mr. Thorpe says. It used to cost $4,000.

!!!!

Container costs have come down a bit, but there's still a long way to go to get back to normal.

[Clean39T]

Supply < demand for elastic goods /= inflation.

Manufacturers/sellers are raising prices on the expectation that demand will be there at the higher price. If it isn’t, prices will fall (and no one will call that deflation).

Bicycles are not an inelastic bauble for most. Prices rise, demand falls or substitution happens. Prices then fall, or stock sits on shelves. The market is simply testing the willingness of people to spend above their means.

[buddybikes]

Originally Posted by pasadena

shipping containers are up to $25k per
another problem is they are diverting ships full of empty containers to the US, where they can grab that cash. Other countries have to wait...

auto industry is changing up to purposely undersupply demand. Post chip-shortage, it's not going to change. They will keep the prices up.

Hopefully competition will change that unless there is some deal making behind scenes. Think average time people own cars will go up and repair shops kept busy.

[dustyrider]

In this world of marginal gains and incremental improvements, do prices ever decrease? Just once I’d like to read a press release on a new bike that talks about how they lowered the consumer price point with some innovation…just once.

[bronk]

Originally Posted by dustyrider

In this world of marginal gains and incremental improvements, do prices ever decrease? Just once I’d like to read a press release on a new bike that talks about how they lowered the consumer price point with some innovation…just once.

I think those price decreases are there but not obvious. For example, what would electronic shifting cost 30 years ago or carbon fiber 50 years ago? In real dollars, both would be crazy expensive because the innovation had not occurred to make them affordable for the masses.

[joevers]

Originally Posted by dustyrider

In this world of marginal gains and incremental improvements, do prices ever decrease? Just once I’d like to read a press release on a new bike that talks about how they lowered the consumer price point with some innovation…just once.

Sram Rival AXS is like 600$ for shifters, brakes, and a derailleur. Zipp and Enve have wheels at $1500 now, and you can get really nice off brand ones for under a grand. R7000 is in basically every way better than Dura Ace just 2 generations ago, and comes in hydro, and with better gearing, and offers a small-hand version. For maybe not even half the price.

Dura Ace/Red/top end wheels don't get cheaper, but that's not the point.

My MTB that retailed for $3k had Shimano hydro brakes, Sram Eagle, tubeless wheels/tires, and a really high end air fork. And the frame weighs about 1100g. It works just as well if not better than a top end XC bike from a decade before, which would have cost at least double.

[rnhood]

The higher prices are likely here to stay, and even continue to climb, as long as we keep pulling our billfolds out with insatiable buying habits. A lot of buying is good for our economy though.

[prototoast]

Originally Posted by dustyrider

In this world of marginal gains and incremental improvements, do prices ever decrease? Just once I’d like to read a press release on a new bike that talks about how they lowered the consumer price point with some innovation…just once.

The high end of bikes will probably keep creeping higher, but at the low end, prices have held pretty steady and are really good.

10 years ago, a CAAD 10 with 10 speed 105 had an MSRP of $1500 (a little over $1800 adjusted for inflation). Today, a CAAD Optimo with 11 speed 105 has an MSRP of $1500.

Same nominal price, lower real price, 1 more cog and internal routing. Seems pretty good to me.

[lavi]

Originally Posted by Clean39T

The market is simply testing the willingness of people to spend above their means.

Thread drift....

This is the stuff that drives me crazy!

I'm a fiscal conservative. A person should not attempt to spend more than what they have...and not more! It should be a law!

However, our society is pretty much the exact opposite. Spend as much as possible. Then, go bankrupt and do it all over again asap.

People are sometimes not my favorite.

Companies, charging what they can/gentle price gouging, are out to make money on the backs of idiot consumers and our lax financial laws.

[fa63]

Bankruptcy is not something that people just toy with. That is mostly for corporations with good lawyers.

I am a "fiscal conservative" too for what it is worth, though that means different things to different people.

Originally Posted by lavi

However, our society is pretty much the exact opposite. Spend as much as possible. Then, go bankrupt and do it all over again asap.

[Dead Man]

Originally Posted by lavi

However, our society is pretty much the exact opposite. Spend as much as possible. Then, go bankrupt and do it all over again asap.

is this possible? i hear people make statements like this, and i always wonder.... doesnt bankruptcy **** your credit up? who would issue a line o credit on someone with a history of discharging debt?