Where is the bike industry going with pricing

[Paul Ruinaard]

In all fairness, a C40 is a collectors item nowadays so stands to reason the prices will climb and the return on investment over time is favorable. 

Few of the top end mountain bikes that cost 200k will ever become collectible, so return on investment is not great.

Hence the reason I only spend money on "collectable" bikes, have yet to loose on one yet.

Which is why i wish i had bought another one. Have my C40 now and am not parting with it.

[bertusras]

surely they're not that similiar?

 

You can buy a specialized bike for R4k, yet you're showing the top of the range CEO richwanker SWorks version that is R190k. I'm sure the top of the range BMW GS goes for silly like ~R500k, which would be a more apples with apples comparison.

 

Case in point, at a cool 100,000 Euro

 

The fact is, as long as people are willing to buy them, the manufacturers will keep on making them. The same can be said for the general motor-vehicle market, the most basic 3-Series is R661K. That's just insanity, but people buy them by the thousands.

[JanJan]

Maybe there is then justification that we berate the 'I worked hard for my money and I'll buy the best' Hubbers.

 

They sustain the exuberant prices we are currently witnessing.

 

#Jealous

[BenGraham]

The acquisition of the Ferrari’s of cycling ie. top of the range Spez, Cannondale, Willier etc. all became possible once the industry started financing ….. suddenly you could have your R80K dream MTB at R2500 per month.

 

Easier to sell at R2K per month than R70K once off?

 

Imagine a bicycle market without financing ..... would look very different?

This is an excellent point.

[Paul Ruinaard]

Case in point, at a cool 100,000 Euro

 

The fact is, as long as people are willing to buy them, the manufacturers will keep on making them. The same can be said for the general motor-vehicle market, the most basic 3-Series is R661K. That's just insanity, but people buy them by the thousands.

Hmm,

 

SO in the motorbike space i finally bought a mates bike i lusted after for a long time -  a Ducati Multistrada Pikes Peak edition. Just paid him over the weekend.

 

He called me crying after the money cleared in to his account as he was really unhappy that he had sold it - because he had been to BMW to buy his 1250 GS HP etc and the ACCESSORIES on the new bike cost as much as i paid him FOR THE WHOLE MULTISTRADA.

 

SO things have gone a bit crazy and normally that's indicative of a bubble market. But like has been pointed out the price is what the market will sustain.

 

Me i see lots of value in second hand and the classifieds.

 

Let the guys with deep pockets take the depreciation hit. I am happy with your used goods.

[Underachiever]

Same. The first thing people pull out of their erses is economies of scale. I call bullcrap on that. All of the components are mass produced in the east in batches of tens of thousands.

 

I always look at Motocross bikes when comparing pricing to MTB's. Similar customer base ITO earnings. Also subject to currency fluctuation. Similar lack of road application so it's a toy.

 

A 2020 Kawasaki KX450 F will cost you R120k Amazing suspension, Electric Start etc etc. 

 

If we want to go more exotic a KTM 450 arm schredder is CHEAPER than the Kawasaki at 112k. Brembo brakes. Hydraulic clutch. Electric start.

 

My theory is twofold.

 

1. There are too many bit players and "niche" manufacturers skewing the perception of value. There are also manufacturers that a most certainly NOT niche but hang on grimly to that model. Santa Cruz spring to mind

2. The industry is upside down. The component makers call the shots. Not the bike manufacturers. In the motorcycle industry the big players own the component brand. E.g. Nissin brakes is owned by Kawasaki. Kayaba and Showa are owned by Honda.

I think the SC frames are build by Giant. So makes even less sense that they are so expensive.

 

But I see Giant prices are creeping up significantly over the past few years. 

[popcorn_skollie]

Same. The first thing people pull out of their erses is economies of scale. I call bullcrap on that. All of the components are mass produced in the east in batches of tens of thousands.

 

I always look at Motocross bikes when comparing pricing to MTB's. Similar customer base ITO earnings. Also subject to currency fluctuation. Similar lack of road application so it's a toy.

 

A 2020 Kawasaki KX450 F will cost you R120k Amazing suspension, Electric Start etc etc. 

 

If we want to go more exotic a KTM 450 arm schredder is CHEAPER than the Kawasaki at 112k. Brembo brakes. Hydraulic clutch. Electric start.

 

My theory is twofold.

 

1. There are too many bit players and "niche" manufacturers skewing the perception of value. There are also manufacturers that a most certainly NOT niche but hang on grimly to that model. Santa Cruz spring to mind

2. The industry is upside down. The component makers call the shots. Not the bike manufacturers. In the motorcycle industry the big players own the component brand. E.g. Nissin brakes is owned by Kawasaki. Kayaba and Showa are owned by Honda.

 

I don't know much about motorcross so I'd ask what other parallels there are between the two industries. Assuming there are legitimate reasons for pricing disparity. The 1st of which comes to mind is. Have things changed in the motorcross industry in lets say the last 5 years? Does a 5 year old motorcross bike seem as redundant today as a 5 year old mountain bike?

[GHOST FACE]

Pricing is more driven by the component suppliers for the forks, rear shocks and groupsets etc. Compare groupset pricing from 5 years ago and you'll have a better understanding for the price increases. Frame prices haven't gone up by much over the past 5 years but parts....

 

Also comparing pricing from 9 years ago is silly. A top end bike then had the same tech that you'd get on a R50k bike now?

[WIPEOUT 1000]

surely they're not that similiar?

 

You can buy a specialized bike for R4k, yet you're showing the top of the range CEO richwanker SWorks version that is R190k. I'm sure the top of the range BMW GS goes for silly like ~R500k, which would be a more apples with apples comparison.

 

That is exactly my point. Based on the level of engineering, technology, material cost and relative complexity I cannot rationally compare a top of the range mountain bike to even a basic motorbike and conclude that the pricing makes logical sense.

Edited June 25, 2020 by WIPEOUT 1000

[ChrisF]

First rule of business. A product is worth exactly what your customer is willing to pay for it. If this number is higher than the cost price you're running a business. If its lower then you're running a charity. 2nd rule of business bundle items to hide the individual costs and increase profits due to economies of scale. Select high perceived value items and bundle with low cost low perceived value items. Price according to high perceived value items. Figure out what your client is looking at and make that amazing; make everything they're not paying attention to ****.

 

And this is why I buy my parts individually and build my own bikes.

And this is what it all boils down to ....

[UnclePolli]

aah, i forgot to add. make your profit its a business afterall, but be realistic for the less fortunate okes.

also the price demand always plays out in favour of high prices, if the demand drops then you will hear the price is high because we dont ship a lot as we used to.

 

appart from components my peevf hate is that a bicycle tyre cost more than my family car sedan replacement yokies

[RocknRolla]

Just like top end motorcycles and cars, I am not their target market.

 

I can't however fathom, from a material (call it volume value) point of view, how these plastic bikes are so expensive. Now you can talk to me about prototyping costs and R & D and tooling costs, but these are then amortized over the first production run. 

 

Just like how a mtb tyre costs the same as a motorcycle tyre. or how some motorcycle tyres are more expensive than a car tyre.

[Captain Fastbastard Mayhem]

In terms of pricing, I think we'll find that by in large the USD price of the below-top-tier bikes to be more or less where it was 10 years ago, but with the introduction of carbon wheels & components, wireless drivetrains and massive engineering challenges (the XX1 cassette comes to mind) it has shot up on the ultra-high tier bike options. Add the effects of the volatile ZAR, as well as more money and time-consuming development techniques to perpetually make things lighter AND more durable, it's not surprising that the ZAR cost of some bikes is mega high, to us. 

 

I'm not saying that this is the only reason, but I think it needs to be taken into consideration. 

[Captain Fastbastard Mayhem]

Just like top end motorcycles and cars, I am not their target market.

 

I can't however fathom, from a material (call it volume value) point of view, how these plastic bikes are so expensive. Now you can talk to me about prototyping costs and R & D and tooling costs, but these are then amortized over the first production run. 

 

Just like how a mtb tyre costs the same as a motorcycle tyre. or how some motorcycle tyres are more expensive than a car tyre.

on the tyre side of things, the only argument I can think of is that the restriction on weight is FAR more important on the MTB side of things when compared to moto & car options. That makes it incredibly difficult to control weight whilst also giving casing strength a good go. 

[Shebeen]

Just like top end motorcycles and cars, I am not their target market.

 

I can't however fathom, from a material (call it volume value) point of view, how these plastic bikes are so expensive. Now you can talk to me about prototyping costs and R & D and tooling costs, but these are then amortized over the first production run. 

 

 

aah, i forgot to add. make your profit its a business afterall, but be realistic for the less fortunate okes.

also the price demand always plays out in favour of high prices, if the demand drops then you will hear the price is high because we dont ship a lot as we used to.

 

appart from components my peevf hate is that a bicycle tyre cost more than my family car sedan replacement yokies

 

ja my f&k tyres cost way too much, but you're not comparing apples with apples.

I'm always surprised at how much research goes into selecting mtb tyres, vs car where you just get what they have there.

 

 

car tyres - 

R560 - https://www.takealot.com/goodyear-155-80r13-79t-effecta-za-tyre/PLID52160684

R8k https://www.takealot.com/goodyear-285-70r19-5-146-reg-rhd-ii-tyre/PLID52160655

 

bike tyres

R75 https://www.cwcycles.co.za/product/kenda-tyre-k838

R1600 https://www.cwcycles.co.za/product/vittoria-bomboloni-29er-tnt-tubeless-tyre

[SCD]

I built a good number of bikes, so just for fun I hacked the Epic S-Works components RRPs into my built spreadsheet.

I doesn't look good. Assuming the S-works frame with brain shock costs the same or more than my Element 999 you won't be able to build this bike for R190k. 

Unless of course you start shopping around and get stuff for solid discounts.

The $/R is really going hard on us here....