Price of bikes - some thoughts....

[tomato paste]

I haven't bothered to read your post. Just looked at the pretty graph and got the gist of your pointless tin foil hat argument.

The fact is the Cycle industry is still massively struggling to keep up with manufacturing demand, shipping and supply to retail.

the predicted graph looks a little like this

View attachment 67991

You are out of your element, Gary. Sweet penis graph though .

 

[tomato paste]

I believe that I understand your point, where is the evidence of a supply-demand curve? Is this just an academic construct suitable only for teaching at university? Or is it real. We have all seen what happened to the price of used bikes in the last year. And used cars are going up in price because the supply of new cars is down due to that semi-conductor factory that burned to the ground. We know for sure supply and demand are linked, but who knows what the actual "LAW" is? I doubt there is one like the sort of law you get in Physics or Engineering.

However the examples you draw on have different conditions. The toilet paper outage was not due to any reduction in supply, quite the opposite really. It was just panic buying, the retailers knew it and so did the manufacturers, as did most of the customers - but who wanted to be out of TP? That was no time to induce further chaos by increasing prices, although I'm sure some independents will have done so.

But the bike & components problem was both an increased demand from people suddenly spending more time at home and wanting to ride a bike, and reduced supply. The reduction is supply was two fold: one was a deliberate reduction in supply to avoid a forecast demand reduction due to Covid (boy, did they get that wrong!) and also outages caused by factory output reducing because people were ill or isolating.

Also, as @Gary intimated, bikes are complex items and with a complex and slow to react supply chain, toilet paper is none of those things.

Retail stocks of TP were back to normal pretty quickly, once folk had filled their bedrooms. But the bike and components situation is still poor. I broke my XT 12-speed mech today and the chain was not looking good either. At the trail centre there was a bike shop, so I asked for a Shimano XT 12-speed mech. I was told that they could not get any until January, but we have some SLX ones that have just come in. (Yes please!). Similar response about a 12-speed chain, he only had KMC, all sold out of the Shimano/SRAM ones. Same response from me. He solved my demand problem immediately with something that was good enough. I didn't wait to find out how much cheaper I could get my items on the internet. I wanted a solution now, not in two weeks or two months time, if that!

TP is just one of many examples. The overall point is that you are making a causal argument related to production that does not hold for most industries. At which point the usage of 'Well you know supply has been severely restricted...' doesn't provide meaningful analysis. When cars are sold out of the lot, generally prices don't increase, for either new or used cars. So what is the cause of price increases? It's complicated would be a valid response, or even better: 'I don't know, but I'll go investigate/research'. Then come back with some research or provide the details of your investigation! Falling back on 'Well you know supply...' or 'Well you know demand...' is just lazy conversation.

EDIT: please do note that even TP has a supply chain, and your understanding of what makes bikes componentry 'more complicated' is probably just confirmation bias. Here and here.

 

[RustyMTB]

I've spent a career in supply chain & would be amazed if toilet roll, (weird example but let's go with it) is any less complicated a supply chain than anything else, taking into account the totality of actual stuff required to deliver a finished product to consumers. That it's more readily available than say an XTR mech is neither here nor there. Any number of factors can be responsible for resilience within a supply chain, the assumption that it's just simplicity is nothing more than a perception based on not much at all. Certainly not experience of actually making things & delivering them to onward processors.

 

[Zimmerframe]

At which point the usage of 'Well you know supply has been severely restricted...' doesn't provide meaningful analysis. When cars are sold out of the lot, generally prices don't increase, for either new or used cars. So what is the cause of price increases?

I think you'll find that in the states there has been high demand for cars. This has caused substantial increases to new car prices with dealers asking huge margins sometimes over the normal price. Second hand prices have also escalated considerably in response to demand.

Meanwhile in Europe, as costs have increased companies are stopping production of lower profit models - the citroen C1 for example - to concentrate on more expensive models.

 

[tomato paste]

Just realized that demand for US car production has been falling steadily for 50 years.

 

[steve_sordy]

Isn't that because of overseas competition with lower prices and better specified, more reliable cars?

Sales of light vehicles (whatever that is) are erratic but the trend is up.

U.S. light vehicle sales 1976-2023 | Statista

US light vehicle sales neared 14 million in 2022, including light truck and car sales. Light vehicle sales by year in the US have fluctuated in recent years.

www.statista.com

 

[Zimmerframe]

Just realized that demand for US car production has been falling steadily for 50 years.

View attachment 68002

Yes. But as production was cut back due to lack of demand (covid). Then there was suddenly demand - you have more demand than supply and hence - Price increases !

 

[Gary]

There's only so much shit you can wipe away before it starts to get painful.

 

[Gary]

& would be amazed if toilet roll, (weird example but let's go with it) is any less complicated a supply chain than anything else

Yeah. pretty much exactly the same process as it takes for raw metals and plastics to end up as an XTR rear mech hanging off an S-worx Levo in Basingstoke.

 

[RustyMTB]

Yeah. pretty much exactly the same process as it takes for raw metals and plastics to end up as an XTR rear mech hanging off an S-worx Levo in Basingstoke.

View attachment 68004

You really should consider giving up smoking, it's making you stupid in public.

 

[tomato paste]

The fact is the Cycle industry is still massively struggling to keep up with manufacturing demand, shipping and supply to retail.

View attachment 67991

To be as clear as possible, this may very well be the case. But, those conditions are not necessarily cause for a change in prices.

The point is that the linkage between price and supply conditions is not so direct nor as simple as 'supply bruh', and more generally, the factor causally related is market power.

 

[Gary]

those conditions are not necessarily cause for a change in prices.

Of course they are. Any setback whether that be materials avaialability, labour shortages and any price increase along your supply/manufacturing/distribution chain is costing companies more money.

nor as simple as 'supply bruh'

and No one said it was Bru'

Goanae jist stop whingin like a couple ay spoilt weins?
It doesn't actually matter what you or Rusty think.

 

[tomato paste]

Of course they are. Any setback whether that be materials avaialability, labour shortages and any price increase along your supply/manufacturing/distribution chain is costing companies more money.


and No one said it was Bru'

Goanae jist stop whingin like a couple ay spoilt weins?
It doesn't actually matter what you or Rusty think.

Lots of goods and services face constraints imposed by COVID, and not all prices are increasing like bike prices. Everyone is supporting a narrative created by someone, which may have truthful components. But be mindful that every time you hear stuff like this repeated, there is usually much more going on under the surface, and taking more your money without contest or protest is a part of that verbal positioning.

 

[Gary]

* sigh *

Of course there is much more going on below the surface in the cycle industry. There always has been and always will be.

You're way off the mark thinking everyone in the chain is conspiring to get rich from the price increases you're stamping your feet about.

probably go back to googling toilet paper facts. You were starting to get the hang of that

 

[tomato paste]

* sigh *

Of course there is much more going on below the surface in the cycle industry. There always has been and always will be.

You're way off the mark thinking everyone in the chain is conspiring to get rich from the price increases you're stamping your feet about.

probably go back to googling toilet paper facts. You were starting to get the hang of that

This is not a statement about the cycling industry. We need people who are aware and capable of sound political economic analysis. Statements and discussions centered on "supply bruh" do not reflect the reality in which we live. This 'neoclassical econ' narrative is deeply unhealthy for almost everyone here. Everyone here can do better, and should!

 

[Gary]

Oh do behave.
You're a complete noob to any aspect of cycling who only two years back knew absolutely nothing about bikes at all so please stop trying to herald yourself as some sort of expert analyst for the entire industry.

You keep harping on about narratives. No one actually cares. Especially a bunch of lazy Ebikers. Its just very easy and convenient to whinge about the cost of things online. Hence so many dull threads about it on here.
Thank you for adding humour to this one.

 

[tomato paste]

Hey where's my bike purchase recommendation? You're weeks late on that. ?

 

[NotAveJoe]

You guys are so cute.

 

[lightning]

I can get you a sweet deal on a pre-owned G500 with fresh engines for only £27m. ;-)

G500? It's tempting, but l would take the Falcon 7X for its lower running costs.

 

[Redbikejohn]

Well talk about light blue touch paper and stand back! ?
To add my 2p worth. Price of individual components can't be used as a gauge to price of the whole. There has been plenty of articles where cars/bikes have been costed from parts and its horrendous.

 

[apac]

EXTRACTION - trash the planet
PRODUCTION - trash the planet
DISTRIBUTION - trash the planet
CONSUMPTION - (fun) Until Designed obsolescence OR perceived obsolescence
DISPOSAL - trash the planet

 

[lightning]

USE - SAVE THE PLANET ?

At least with bikes, if it gets people out of their cars

 

[Swissrider]

Interesting thread but many seem to ignore the basics of the bike industry or virtually any industry (the fashion industry is an exception which almost defies logic or economics).

Fortunately for us there is neither a monopoly or cartel fixing bike prices. It’s the market. If a bike company charges more than its rivals for a similar spec bike it won’t sell enough to be sustainable unless their product is clearly superior by design and execution - a situation which is usually temporary until competitors catch up. These bikes are difficult to value as one might need to pay 20% more for a 5% improvement. For some, this premium is well with paying, for others not. On the other hand, if a company cuts margins to the bone and/or fails to invest in development, their bikes might sell in the short term, but if the company doesn’t make enough profit, it will eventually go bust. The sweet spot between not going bust and making excess profit creates a sustainable price and not surprisingly decent bikes of similar spec cost about the same and it’s certainty not worth moaning about this level of price. It is what it is. After my house, car and motorbike, my EMTB is the most expensive item I own and it’s hard to put a price on the pleasure I’ve had over the last three years and 4000k on it!

 

[Gary]

t least with bikes, if it gets people out of their cars

Aye. And into VW T5s ?

 

[lightning]

Brand new T6.1's around here

"They've had their COVID grants"