An Amusement & Diversion for The Genteel Cyclist. Daily.

Thursday, March 27, 2008

Bike prices are likely to climb for at least one boutique assembly line

Tim "Masi Guy" Jackson has never gotten back to me about test-driving one of the new Masi uprights. I'm not going to hold a grudge, because he obviously has bigger problems than the bawling of some backwoods chump with a lame-ass blog read by tens of thousands of highly influential and filthy rich cyclists. Judging from this lukewarm prognosis for the bike business, and his prediction that bike prices are likely to increase 10 - 20 percent in the next year.

The short version is this: The dollar is weaker than a Tyler Hamilton excuse, steel and rubber prices are going up, Chinese factory wages are climbing, and the US bike industry has artificially suppressed prices and margins to gain market share.

With my vast reservoirs of consumer expertise, let me just say this: Dudes, position your market against cars. Most Americans in big cities hate driving, parking, fueling, and insuring their workaday automobiles, and the cost of urban car ownership is now becoming prohibitive for many folks. This is a perfect time for them to trade down, if they understand that trading down is actually trading up-- at a significant savings.

I'm not saying they'll be knocking Tim's door down looking for a Masi Soulville. I wouldn't know, because I haven't been able to test ride one. But generally this: The bike industry will be just fine if they adjust the recipe to Tim's Kool Aid just a little bit, to play to the market's weaknesses as well as its strengths.

Consider: Bike sales were up across the industry by about 5 percent last year. Shimano set a new sales and revenue record. The economy, frankly, started to tank in June last year, and bike sales stayed strong.

Chin up, Tim.

8 comments:

Dobie said...

The last shop I worked for totally geared itself for the next revolution (pun intended) in cycling--the change over of commuters. They cater to all bikes, but lean little on the commuter end and definitely promote riding over driving in all cases (it was in my contract in fact, to ride 3-days a week to work). We continually saw people come to make the switch from 4 to 2. And to this day when I talk to the guys there, profits are nothing but up and every month is a record.

http://www.rideyourbike.com

Anonymous said...

behind bars has these in stock-

Matt said...

There were articles in the Wall Street Journal last year saying sporting good prices (including bicycles) would be affected by the global shortages in carbon fibre and titanium, which are being used by Airbus and Boeing in their newer airliners. The dollar has weakened significantly and will continue to do so, and you can see it in the price rises in Ortlieb gear directly. It wouldn't surprise me if the Rohloff hub prices are also rising because of currecny factors. With increased pressures on household budgets from food and energy pricing, discretionary spending is likely to continue to be suppressed. Against all that, the price of a pretty crappy car (say, $2,000) will get you a lovely bicycle. At the moment, the number of people who consider a bicycle a reasonable substitute for an automobile for any significant amount of travel is still pretty small, but it will increase. The industry would do well to position bicycles as a useful transportation device rather than an optional sporting good, and this is happening. In the meantime, if are after any foreign-made bike componenents or accessories (most of 'em), now might be the time to do it before the price rises really begin to bite.

justinaugust said...

Rivendell has announced that a lot of their imported parts are going to be going up in price as well, due to the weak performance of the dollar.

Tim Jackson- Masi Guy said...

Dude, if I wasn't so oversold on the bikes and didn't have about 45 requests for the bike as a test bike... I could hook a brother up... but I'm stretched so thin on inventory, it's silly. How does April of 2025 sound? ;-)

Yes, the news is not all bad. Commuters are going to become a bigger part of the bike business in the US. They've generally been seen as "kooks" for many years, but now they are seen as "customers"... finally.

I was a car-less commuter for nearly 6 years myself, so I have s oft spot for this market and hope to create bikes that appeal to people who believe in bikes as a way of life (as I do).

Power to the people! Bike people, that is.

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