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renaissance cyclist
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Discussion Starter · #1 ·
Until this year, I had been surprised at how little bike prices had changed. My first, very bottom of the line, Giant Acapulco retailed for $250 in 1993, and until the 08 models are gone, you can still get a Boulder for the same price as the entry level Giants of 15 years ago. With very few changes to the bike, the MSRP of a Boulder will jump from $250 to $350. This seems to be the case with most every brand, up and down the line (A Jamis Dakar XCR Pro jumped from $2550 to $3050). It seems that manufacturers priced the bikes when gas was $4.25/gallon and Bicycles were flying out of the shops. With the recession, and $1.60/gallon gas it seems like the retailers will have to really cut their profit margins in order to keep the bikes priced to move next year.

If prices don’t come back down to match the economy in future years, I worry that the sport will be hurt when beginners are turned off by high costs of even the most modest entry-level bikes. Has anyone else noticed this?
 

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Its not gas prices that they base bike pricing on. It is world economics, including the US market, but also the economy where the bikes are produced, US dollar value, material and work costs, importing/transportation fees(just because gas is lower for you at the pump doesnt mean it was cheap 3 months ago when they were buying parts to build for the 09 year models)

Its far beyond what most people look at or think about.
 

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Aluminum, rubber, steel all hit record prices during the summer months. That's why the high prices- a lot of the '09 bikes were built with high priced materials and until the high priced commodities are flushed out the system (the commodities market has crumbled in the last 3 months) prices will remain high. I'm betting they go down later in '09 and 2010. Fuel prices are a small part of the equation.
 

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renaissance cyclist
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Discussion Starter · #4 ·
I mentioned the gas prices only because when they were high, and people started riding more to work, more people were brought into the sport. I do realize that the current low gas prices didn’t help with production costs several moths ago, bow that they are low, demand will go down, which will inevitably reduce the values regardless of manufacturing costs. Even though the recession hasn’t affected my income, when I bought a bike last month, the amount I was willing to spend was less than it was in 05. If the recession continues, I’m sure it will be more the 4 years before I start looking to replace the new bike.

Something somewhere has got to give, either someone has to let their profit margin go down, or far fewer bikes will sell, or both. I don’t claim to know all the factors that affect the cost of building bikes, but I do think it looks like it will be a rough year for bicycle shops.
 

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Expect major discounts

The market for everything has tanked so expect major discounts for a new bike. If LBS's want to move inventory, they will have to drop prices to levels they might have never considered in the past. The price of gas, raw materials, etc. is irrelevant. If business's want to move merchandise, they will drop prices. Selling at a loss beats not selling at all and that is the option.

My son just made an offer on a house for something like 175k. The house used to be listed closer to 300k. I just bought something that listed for $2000k for $750. It was not a left over, last years model, etc. 50% off list is the reality in todays market.

I would expect at least 30% off list if in the market for a new bike.
 

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Master of the Face Plant
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el_chupo_ said:
Its not gas prices that they base bike pricing on. It is world economics, including the US market, but also the economy where the bikes are produced, US dollar value, material and work costs, importing/transportation fees(just because gas is lower for you at the pump doesnt mean it was cheap 3 months ago when they were buying parts to build for the 09 year models)

Its far beyond what most people look at or think about.
Exactly, The dollars buying power is lower and most if not all the materials for these bike come from overseas. Even mid-high end parts are going up. Weak currency is very bad for countries that outsource everything. The solution for me has been buying used bikes. I hate to say it but with this economy lots of people are selling nice bikes cheap. Its a good option for newbies who don't want to drop 500 bucks on a bike.
 

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renaissance cyclist
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Discussion Starter · #7 ·
If the increased list prices reflect an increase in what dealers are paying to manufactures for the bikes, I pity the LBS owners right now. I think you are right though, particularly when spring comes and the bikes still aren’t selling, the prices will have to drop.
 

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Master of the Face Plant
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Rev Bubba said:
The market for everything has tanked so expect major discounts for a new bike. If LBS's want to move inventory, they will have to drop prices to levels they might have never considered in the past. The price of gas, raw materials, etc. is irrelevant. If business's want to move merchandise, they will drop prices. Selling at a loss beats not selling at all and that is the option.

My son just made an offer on a house for something like 175k. The house used to be listed closer to 300k. I just bought something that listed for $2000k for $750. It was not a left over, last years model, etc. 50% off list is the reality in todays market.

I would expect at least 30% off list if in the market for a new bike.
True. Keep in mind you can always barter with the bike shop too. The price on the sticker is not the bottom line. Those housing prices were vastly overinflated though. Another good thing for us is the fact that because shops are not moving as much and Christmas is past prices will fall.
 
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