Posted: Wed 16th Apr 1:21pm Post subject: Bike Prices Predicted To Sky Rocket In 2009
A number of contributing factors mean that the cost of bikes is set to rise dramatically over the coming year. The following article is from the Bicycle Industry Association of New Zealand's newsletter and is reproduced with their permission:
Steel went up 65% last year and has gone up 35% this year and continues to increase daily. Prices have gone up from $US3,000 a tonne to $US6,000 a tonne and is still increasing. In some instances steel suppliers are now dictating cash up front before they will supply at these higher prices to ensure that they get paid and will not quote prices of steel until the day before delivery. That is how uncertain the whole situation is. These price increases also apply to other bike parts such as alloy, rubber, plastics, etc. In addition, there is also a shortage of steel.
Labour rates in China went up about 15% on 1 January and the costs of labour went up another 5-6% today being April 1st This includes direct and indirect costs of labour. It is predicted that production could go back to Taiwan in the future.
In Beijing 3 major steel mills (and many more industries) have to close a month before the Olympic Games and will be closed during the Olympics which will fuel more shortages. It is not just the bicycle industry affected but all industries. Since January in Southern China over 3,000 factories have closed this year far and this includes electronics and other products.
Currency: What has happened is that RMB has appreciated by 10% to the US$ so the price will go up accordingly. The Yen was also 110 to the US$ a short time ago and has been down to 98 yen. So Japanese prices in US dollar terms are going up as well and there will be increases on bikes in New Zealand probably of between 5 – 40% depending on the bike.
One bike factory two years ago broke even and last year made 1 million US dollars, however, this financial year they lost 1.2 million US dollars, so over the 3 years they have lost $200,000 US overall. Nobody props up these private businesses so they have to make a profit. There are many other factories in Asia in the bike industry that have not made any money in the last year. Will China still be the workshop of the world by the end of the decade?
Joined: May 30, 2003 Posts: 3,554 Location: the alexs, the land that time forgot
Posted: Wed 16th Apr 1:45pm Post subject:
Spokes wrote:
I concur with this. I have heard it from many other companys.
meh
its all over, all our surppliers are telling us that prices are going up and in some cases over 100%, would be nice if we could pass it on like you guys
best to get a westpac 110% mortgage out now and buy 10 complete bikes, 35 sets of chainrings and cassettes and 100 HG93 chains assuming that 1 bike lasts 3 years, with a new drivetrain every 10 months or so and a new chain every half year(ish). then i should be sweet for the next 30 years.
or assume "recreational plasticity" ie morph your hobby according to environmental conditions.
i might get more into surfing, whereas most of you would make fantastic synchronised swimmers
Joined: Sep 04, 2002 Posts: 20,660 Location: Riding the Entertainment Mastodon
Posted: Wed 16th Apr 2:06pm Post subject:
Butch wrote:
Yay, more doom and gloom.
Speculation about the future is something that anyone can appear ot be an expert on, because it can't be falsified in the present, and when the future comes everybody will have forgotten about the predictions and be worried about something new.
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