Originally Posted by
cafzali
The pricing of goods is an example of supply and demand, one of the chief laws of economics. Any product or service provider will maximize their margins and charge what the market will bear. In the case of a niche item like bike tires, there simply aren't enough manufacturers that are competing on price to make the prices lower. Why are they doing that? Because they've got a captive market that will pay $60 for a tire that will last 2-3K.
Your point about how they're made currently, while valid, leaves out the point that if people weren't willing to pay the going rate for a bike tire, makers would have been forced years ago to come up with a less expensive manufacturing process. No company does that until they're forced to by the market, which is why U.S. cars were junk until we had competition that forced improvements.
There are more than a dozen manufacturers of bicycle tires. Which is a fair number (about a quarter, give or take, as many as car tire manufacturers), considering how much less the demand is for bicycle tires. So they do not have a captive market. Bicycle tires are more labor intensive because the demand doesn't warrant the development of fully automated facilities (which would be prohibitively expensive given the number of sizes and relatively low demand for each of those sizes). Increased expense in manufacture is a major component of the cost.
Many companies have automated without being forced to by the market. The reasons are simple. When the demand exists to warrant the additional manufacturing capacity that automation provides to offset its cost it gets done. AND/OR, when the cost of automation is low enough to allow easy recouping of the conversion costs solely by eliminating expensive manual labor. Bicycle tires don't really fall into either category.
BTW, who is riding 'expensive' tires that they are only getting 3K on? Racing style tires maybe, but IME, I get 6K+ for $40 tires (gatorskins, marathons) and 3-4K for panaracers ($20)