Clydesdales/Athenas (200+ lb / 91+ kg) - Price increase?

In several of the forums, people have been mentioning every-so-often a price increase that is coming. I realize that due to the price of gas, everything is going up, but does anyone have any 'hard' source for this increase (NPR economist, NYT financial column, etc.)? I'm looking at getting a new LHT in the next month or so, and would like to be ahead of any price jump, but I don't want to get it until we are financially able to do so comfortably.
Thoughts?

Thanks,
D

No hard "source" on my end, other than an understanding of Economic Theory and a falling dollar leading to an increased importation cost on components manufactured overseas (Schimano, Bike frames from Taiwan, China, Korea, etc). A falling dollar is better for an export market than an import market.

http://www.surlybikes.com/2008_07_01_blog_archive.html#2370980550388424227

Not sure when it goes into effect, but I would guess it won't be much longer if it hasn't already.

IF you scroll down a bit there is a neat story about the blogger hauling a chair home on the rear deck of his ride. Pretty entertaining.

In several of the forums, people have been mentioning every-so-often a price increase that is coming. I realize that due to the price of gas, everything is going up, but does anyone have any 'hard' source for this increase (NPR economist, NYT financial column, etc.)? I'm looking at getting a new LHT in the next month or so, and would like to be ahead of any price jump, but I don't want to get it until we are financially able to do so comfortably.
Thoughts?

Thanks,
D

Typically prices change at the model year change, but there has been a lot of pressure on prices this year. Here is the basic economics, the US dollar has dropped in value versus just about every other currency around. Many frames are made in Taiwan, they make good quality frames for a reasonable cost, a frame cost US$150 last year, costs the US importer $162.35. Shimano makes a lot of components in Singapore, the Singapore $ has also risen aganst the US$ a dérailleur, that cost $40 last year to make in Singapore would cost $44.19 now. Thanks to the fact that a a barrel of oil is about 27% higher then it was last year, and that container ships use oil, so the cost of shipping a container of parts and frames, is also much higher then it was a year ago.

Very few bicycle manufacturers are in business for their health, so when prices go up, they have a difficult choice to make, either they raise the price, or use a lower level of components for the next model year. This isn't new, it's been in the process for about 5 years now.

What will be interesting is what will happen in Canada this year, will the same model in Canada be much cheaper or have better components then the US one, considering that the Canadian dollar has also risen against the US dollar.

Besides the exchange rate, there's the fact that manufacturing runs on oil, as does the transportation to get the goods to you.

Steel is up roughly 70% since december, and aluminum is up almost 20%. That will reflect in the cost of all products.

There are going to be a lot of forces pushing in opposite directions. High fuel prices will be pushing more to either buy new bikes or fix up what they have which should make for a decent market for lower-end stuff. And there will always be those who are willing to fork over whatever it takes to shave off another gram but probably fewer than in the past. It is the middle of the spectrum that will see price increases clashing with reduced available income making it hard to move product and make a profit.

Carbon Fiber is up, my guess on the 40-50% range, resin that treats the carbon fiber is up 65%. Shipping costs are up about 18% based on January 1st, 2008. Another thread addressed al and steel.

F3 is up $300 for 2009, but my guess is that this may change. Most of the higher increases took place in June and July, so that price may be a little premature.

What will be interesting is what will happen in Canada this year, will the same model in Canada be much cheaper or have better components then the US one, considering that the Canadian dollar has also risen against the US dollar.

It's been largely trading at parity with the dollar for the past year... had a short lived spike for a month or so and then sank back in line with the US dollar.

I do't have any concrete evidence but I can share my purchasing expirience from this May.

When I bought my Grand Sport this year I had a choice between the 07 left over still selling at MSRP (but included a couple freebies) or a new 08 at the current MSRP. The 08 had lower level shifters and front der yet still cost $85 more than the 07. My choice was clear, the 07 was cheaper and had better componets even though the 08 was sexier (please don't tell my 07 I said that :innocent:, she'd be bummed). When I inquired about the price rise coupled with cheaper componets I got the answer that everything was going up hence the reason they would not budge on the leftover.

Thanks to one and all for your responses. It has really helped with the decision making process (not to mention helping to convince the wife to step up the time table). The fact that the dollar is currently weak against other currencies, had definitely been part of the thought process, but I guess that is part of living in a global economy.

What will be interesting is what will happen in Canada this year, will the same model in Canada be much cheaper or have better components then the US one, considering that the Canadian dollar has also risen against the US dollar.

No kidding! Millions of folks who live in border states have been running to Canada for medications for years, no telling what we'll start running across the border for now.

Thanks again,
D

Thanks to one and all for your responses. It has really helped with the decision making process (not to mention helping to convince the wife to step up the time table). The fact that the dollar is currently weak against other currencies, had definitely been part of the thought process, but I guess that is part of living in a global economy.



No kidding! Millions of folks who live in border states have been running to Canada for medications for years, no telling what we'll start running across the border for now.

Thanks again,
D

In Philadelphia folks run across the 'border' with New Jersey for alcohol - it's heavily regulated in PA. :(

Plus there's the one thing everyone forgot - prices always rise in a down economy. It's the whole "if everyone else is doing it, so will I" mentality as people see the price of everything rising. It's sad, but it's unfortunately true.

It's been largely trading at parity with the dollar for the past year... had a short lived spike for a month or so and then sank back in line with the US dollar.

That is true, but prices this year were set last year when it was around 95¢, lots of people with lots of products started complaining because price differentials were still like when it was 75¢, so a lot of prices came down on things. For example last year a Trek 1200 was $1150, this year a 1.2 is $829 (same store).

As for the loonie, the Bank of Canada is in an interesting spot, inflation is up, which puts pressure on them to raise interest rates, which will cause the loonie to go up. The economy is doing better then expected, so they can raise rates, the government is running a surplus and paying back government debt, also removing pressure to keep rates down. Unlike in the US where the economy is circling the bowl and the government is running a massive deficit, which tends to put pressure on reduced interest rates, even with higher then wanted inflation.

The only thing keeping the Loonie down, is the fact most Canadian exporters sell mostly to the US, but as time moves on, that gets harder to justify, it's one thing when the dollar increases significantly over a few months, it's another a year later, when you have had a year to look for new markets.

This bytes! I can't afford a BD or LHT until I graduate from Nursing School! NEXT YEAR! ARGH! Here's to hoping the ARMY is going to give me one heck of a sign on bonus.....

I asked the guys at my LBS when they would be marking down 08 models for quick sale and (after a short laugh) he said they wouldn't be. The prices on the 09s will be so much higher that it will make the 08s look like a steal.

Carbon Fiber is up, my guess on the 40-50% range, resin that treats the carbon fiber is up 65%. Shipping costs are up about 18% based on January 1st, 2008. Another thread addressed al and steel.

F3 is up $300 for 2009, but my guess is that this may change. Most of the higher increases took place in June and July, so that price may be a little premature.

Carbon fiber prices are up and are probably going to continue to climb. There's a huge demand for CF in aerospace right now (the new Boeing passenger plane AND the new Airbus AND the new air force fighter all use a lot of cf, and oddly enough there's a lot of military equipment that uses CF and there's a war going on, so there's high demand for new/replacement CF parts) and the production capacity hasn't ramped up to meet demand yet. If it works like every other market, in a year or three we'll have a glut of the stuff dumped on the market and it will get really cheap. Ever wonder why there arent' more CF body panels on cars? There just isn't enough supply.

Carbon fiber prices are up and are probably going to continue to climb. There's a huge demand for CF in aerospace right now (the new Boeing passenger plane AND the new Airbus AND the new air force fighter all use a lot of cf, and oddly enough there's a lot of military equipment that uses CF and there's a war going on, so there's high demand for new/replacement CF parts) and the production capacity hasn't ramped up to meet demand yet. If it works like every other market, in a year or three we'll have a glut of the stuff dumped on the market and it will get really cheap. Ever wonder why there arent' more CF body panels on cars? There just isn't enough supply.

You do of course realise that they can make bicycles out of stuff other then CF. :D

You do of course realise that they can make bicycles out of stuff other then CF.

Such as steel? Close to allocation, and costs are up comparable to CF. Same situation for al.
Ti is up 8% since July 1.

You do of course realise that they can make bicycles out of stuff other then CF.

Such as steel? Close to allocation, and costs are up comparable to CF. Same situation for al.
Ti is up 8% since July 1.

Steel is easy to recycle (compared to CF anyway), and the setup costs to produce are much lower than CF. Steel use will fluctuate, and probably start trending down, by the end of the year. Recycling steel has helped to dampen the cost increases, and will continue to do that. There's a lot of steel out there waiting for prices to go up enough to be worth recycling (transport costs are too high, it's embedded inside things like concrete, etc).

The biggest causes of the steel price increase right now are related to the building boom in the far east and the closing of steel plants here in the US because of environmental regs. It's nearly impossible to smelt or paint in this country anymore, so we get to add a lot of fuel costs so it can be done across a border somewhere. Guess what, the air pollution just blows back here anyway, so we take a net environmental loss on the deal as a planet.

I don't buy into carbon fiber. I'm not that good a rider yet, and I don't think the cost/benefit is there for me, really probably not there for anyone who isn't a pro or at least a "prosumer". I don't like the fatigue analysis for it for road applications, compared to steel or aluminum. I don't think a steel tubular frame *can* fail catastrophically with regular eyeball inspections. Obviously if you flex it back and forth a *lot* it will eventually fail, but you'll have warning signs before it lets go. CF frames *will* fail catastrophically, I don't think they have any other failure mode, and eyeball inspection gets you nothing. The good news is carbon fiber will stay true up to the point it breaks. The bad news is it'll stay true up to the point that it breaks.

I have enough excitement in my bike rides without that to look forward to.

Steel is easy to recycle (compared to CF anyway), and the setup costs to produce are much lower than CF. Steel use will fluctuate, and probably start trending down, by the end of the year. Recycling steel has helped to dampen the cost increases, and will continue to do that. There's a lot of steel out there waiting for prices to go up enough to be worth recycling (transport costs are too high, it's embedded inside things like concrete, etc).

The biggest causes of the steel price increase right now are related to the building boom in the far east and the closing of steel plants here in the US because of environmental regs. It's nearly impossible to smelt or paint in this country anymore, so we get to add a lot of fuel costs so it can be done across a border somewhere. Guess what, the air pollution just blows back here anyway, so we take a net environmental loss on the deal as a planet.

I don't buy into carbon fiber. I'm not that good a rider yet, and I don't think the cost/benefit is there for me, really probably not there for anyone who isn't a pro or at least a "prosumer". I don't like the fatigue analysis for it for road applications, compared to steel or aluminum. I don't think a steel tubular frame *can* fail catastrophically with regular eyeball inspections. Obviously if you flex it back and forth a *lot* it will eventually fail, but you'll have warning signs before it lets go. CF frames *will* fail catastrophically, I don't think they have any other failure mode, and eyeball inspection gets you nothing. The good news is carbon fiber will stay true up to the point it breaks. The bad news is it'll stay true up to the point that it breaks.

I have enough excitement in my bike rides without that to look forward to.

The great advantage of steel is that the process for turning old steel products into new steel products is well established, in fact most metals can be recycled in much the same way.

Although it shouldn't even get to that point, we need to return to the process of repairing stuff, the modern North American MO is that when something doesn't work any more you toss it in the garbage and buy a new one. I remember as a kid, we got the TV repaired when it went on the fritz, this was a good thing, you called the repair guy, or took it to the repair shop, and for considerably less then the cost of a new one, they fixed the old one. Of course at the time a new TV would cost $300 or more, and many people made less then $200 a week so a $40 repair bill you could handle, a $300 replacement you couldn't.. Of coourse now you buy a TV for a day or so's labour. The good thing about this, was that the repair shop was local, so much of the cost of the repair, was to someone local, which helped the local economy. Now almost nothing goes to the local economy, and you wonder why the US is doing so poorly right now.