Chalo said:Jay Beattie said:What I take away from the press release is that Pacific Cycles will
continue with its low-end bikes through high volume dealers, and
Cannondale will continue in its current niche selling higher quality
bikes through LBS.
I think we can expect a major expansion of Cannondale's recent
practice of having some of its frames manufactured overseas. An
aluminum Cannondale used to be a qualitatively different thing than an
aluminum Trek, Giant, Redline, etc. That's probably going to
change.
Not according to the full news release, and even if they do move more
production to Asia, that would be in keeping with all of the
manufacturers including Trek, at least its low end products.
Quoted message said:It didn't make sense for them to do it to Mongoose, GT, or worst of
all, Schwinn. But they did. I think their track record speaks louder
than their press release about where this is all going.
Schwinn was never a premium brand. It was always a plumbing pipe,
boat anchor brand that sold through its own stores until the company
was driven in to the ground by feuding family members and competition
ffrom overseas -- and then sold three (or four) times out of various
bankruptcies. We may have all sorts of warm and fuzzy feelings about
Paramounts, but those were the wall ornaments at the local Schwinn
shop and not typical of the usual Schwinn production. I think that
the current Asian Schwinns put out by Pacific are better than any
Varsity I ever rode. And Dorel says in its press release that it is
going to fluff up the GT brand and make that part of its top tier LBS
offerings.
Quoted message said:If Dorel/Pacific think it is better for the bottom line to keep the
Cannondale brand exclusive to the LBS market, then they will. If they
think it will be more profitable for the brand to be retailed through
nationwide sporting goods chain stores, they'll do that. And have no
doubt-- if they think there's more money in selling $150 "Cannondales"
at Wally World, they will do that.
True, business is business -- but why would someone want to compete at
the lowest end of the market with narrowest margins? That does not
make sense. Dorel already has brands in that market, and it looks to
be following the usual course of purchasing a premium brand in an
effort to increase its margins. This is a very common way to go.
Ford owns Jag, Volvo and Land Rover and maintains those brands.
Harman owns Mark Levinson and maintains that brand. There are many
other examples.
Quoted message said:
What I would not count on in any case is for the new owners to
continue to uphold the few quality distinctions Cannondale has managed
to retain-- or USA frame production, for that matter.
You may be right, but with the current state of the dollar, it may not
make sense to move production of Al frames overseas immediately. It
is the rare American manufacturer that has kept production here, and I
don't think there is any guaranty that even the most traditionally
Amereican of manufacturers will keep its production here, sad to
say.-- Jay Beattie.
