Rumors?

In article <[email hidden]>,

Thomps said:

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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On Sun, 27 Jun 2004 21:16:22 -0500, "Thomps" <[email hidden]> wrote
in message <[email hidden]>:

Quoted message said:

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

Just Zis Guy said:

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)

--

you know? said:

On Sun, 27 Jun 2004 21:16:22 -0500, "Thomps" <[email hidden]> wrote
in message <[email hidden]>:

Quoted message said:

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 [email hidden]
Dasi Jen, Taoyuan Hsien, Taiwan, ROC
Please replace mousepotato with asiancastings
---------------------------------------------

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.

Quoted message said:

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

Quoted message said:

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

"Mike Jacoubowsky" <[email hidden]> wrote in message news:<[email hidden]>...

Quoted message said:

Quoted message said:

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

Quoted message said:

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....

(bfd) said:

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

In article <[email hidden]>, luigi12081
@cox.net says...

Quoted message said:

(bfd) said:

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).

Quoted message said:

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" <[email hidden]> wrote in message
news:[email hidden]...

Quoted message said:

"Mike Jacoubowsky" <[email hidden]> wrote in message

news:<[email hidden]>...

Quoted message said:

Quoted message said:

Quoted message said:

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

Quoted message said:

Quoted message said:

Quoted message said:

components?
Are they true?
I'd like to buy new, and am wondering whether to wait until this

winter,

Quoted message said:

Quoted message said:

or

Quoted message said:

if I'd be wiser to act sooner.

Thanks all,

The bicycle industry is desperately *trying* to increase prices, since

most

Quoted message said:

Quoted message said:

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,

Quoted message said:

Quoted message said:

for the first time, been ticking upward significantly. Most of this is

due

Quoted message said:

Quoted message said:

to increased demands from China, which is beginning to make itself known

as

Quoted message said:

Quoted message said:

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

Quoted message said:

Quoted message said:

will be offset as production is still far cheaper there than elsewhere,

so

Quoted message said:

Quoted message said:

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

Quoted message said:

Quoted message said:

have a need for one now, you'll get to make use of it for several months

of

Quoted message said:

Quoted message said:

great summer riding. That adds significant value to the don't-wait side

of

Quoted message said:

Quoted message said:

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....

On Thu, 01 Jul 2004 06:51:37 GMT, "Mike Jacoubowsky/Chain Reaction

Bicycles said:

Quoted message said:

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

In article <[email hidden]>,

(Pbwalther) said:

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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On Thu, 01 Jul 2004 06:51:37 GMT, "Mike Jacoubowsky/Chain Reaction

Bicycles said:

Quoted message said:

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.

<snip>

Is because that the Philippines looks to the US as an example. Due to
the political affiliation with the US, its very much like a poor US
state in some regards, not like the rest of Asia.
Michael J. Klein [email hidden]
Dasi Jen, Taoyuan Hsien, Taiwan, ROC
Please replace mousepotato with asiancastings
---------------------------------------------