I bought my SL5 for £4500 in 2015. Today’s equivalent bike 5 years later is £7000.
The price difference is substantial when you consider the carbon is the same across the 3 iterations of the Tarmac Pro. I am a big fan of Specialized and the engineering quality behind their products. Some of their thinking is questionable, such as the short chain stays and not offering tubeless on this years new model but on the whole they have a solid product line and service support structure in the UK.
And to revert back to your question, where I would have simply bought another Tarmac in Spring next year the price increase has now made me pause and consider alternatives. Why? I see Specialized profiteering from the pandemic.
If you choose to align your prices at the higher end of the market, your brand has to be align with your personal values or at least not conflict with them.
One added layer to the discussion: In my opinion the price increase might also be to intentionally lower the demand. People complain about long waiting times, delayed responses via email, no availability on the phone, empty shops etc.
In Canyon’s example people were super annoyed how quickly the new Aeroad was sold out / how long they have to wait for it. I guess for some people that ruins the ‘brand loyalty’ more than paying a bit more.
Same with Spesh and empty stores. If I pay a premium price for a premium bike I want it asap. And customers in the premium segment value availability probably over a slight price increase. In the past month either the bikes were not available or the mechanics didn’t have time to build it up. Bike shops also have limited resources for consultations and service etc. Which can reflect poorly and spoil the reputation of the brand / LBS.
So all in all - besides making more profit - I see reasons why bike manufacturers increased their prices. Not judging if that’s a good or bad thing.
Last thing. The outcry over a price increase is probably more noticeable for nerds like us in this forum. 9 out of 10 people buying a bike next spring will have no idea that prices were increased and probably celebrate a 5% discount they get in the shop ;).
It is the same for my LBS. Yes, they sold their inventory, but much of their sales come from special orders that they have not been able to fill (ie. lost revenue). Any business that has its product supply so restricted is left with few options other than raising prices if they want to remain profitable.
We don’t have a capitalistic system lol. We have not for decades. Our governments and leaders choose who wins and loses. If we had a capitalistic system then there would not be such a thing as to big to fail. Tax rates since the 60’s have been dropping for corporations from a high of around 54% to todays 21%. Also remember that companies can deduct everything including foreign losses. and the little guys taxes increase through user fees and the like. There is no such thing as competition in many industries and price fixing is next to impossible to prove/enforce. The biggest problem in this world is lobbying or legalized bribery. If any of these jobs existed in North America or Europe I would have less of a problem with this. But since these jobs mainly exist in countries where wages are next to nothing because they outsourced to put people put of work in the Europe and North America I have a big problem with it. Bottom line it is not a capitalistic system. It is a corporatist system Where people bribe our leaders so their business’s can skirt the laws and not pay their fare share for the costs of operating our society. And if your wondering where all the profits went I doubt it went to the employees of specialized. It took 5 months to get an autoresponder to a message I sent them. They are not answering the phones. This usually happens when a company gets rid of everyone to save costs. Instead of a 12% price increase how about a 12% price decrease to encourage cycling and get more riders on the road. Less Cars, and hopefully more money in the pockets of individuals to spend in their own communities to keep businesses open.
I bought a 2017 model Tarmac Pro at the end of 2016 and like you it was £4500. Just after Specialized added £500 to the price because of Brexit, another good little excuse as I wonder if we suddenly remained in the EU, would they deduct that money, I doubt it! Now, to replace that bike it would cost £7000. Such an increase in a short space of time is taking the biscuit IMO.
Yes with a ‘but’. Most of these big corporates have made statements around social responsibility. Price gouging doesn’t fit with that so they are walking a fine line.
Hmmm. So many strange things in that post. First, if there’s a wonderful system by which governments decide who wins and loses, I haven’t had the luck of getting introduced into that system yet. So when we have good years, we hire, when we have bad ones, we fire. Must be my fault somehow.
No such thing as competition in many industries - again my bad luck, haven’t seen one of those industries yet. Must be my fault also.
We don’t outsource to Asia to put people out of work in Europe and America, we outsource to maintain and develop businesses in Europe and North America. Must also be that I misunderstood the system.
If you could give me some coordinates of who to bribe where, this should be easy since it appears to be so obvious.
To the other more serious comments in this thread:
Look at Dorel to see a publicly listed company selling bikes (Cannondale, Schwinn, etc). Revenues are up sharply, as volumes are up. So yes, they do sell more units. But yes, they do have shortages that limits how much of the increased demand they can meet. More demand, limited supply - Econ 101, what happens to prices?
Supply chain costs: yes, those have gone up - the severe decrease in commercial passenger flights has reduced air cargo capacity significantly, and the demand in Covid winner segments (anything to do with home improvement, outdoor activities, etc) has created unpredictable shifts in surface transport capacity and demand. So yes, shipment lead time and costs have increased, and keep on increasing. Fuel price reduction early in the crisis compensated partly, but as economies recover oil prices have also recovered, so that compensation is lost.
Lobbying in the United States describes paid activity in which special interest groups hire well-connected professional advocates, often lawyers, to argue for specific legislation in decision-making bodies such as the United States Congress.
The system is broken!
The 2020 election is set to finish with $14 billion in spending, smashing records as Trump and Biden battle for the White House.
The sum will be more than double of what was spent in the 2016 election.
By Election Day, the presidential campaign is expected to end up seeing $6.6 billion in total spending, while congressional races are anticipated to finish with just over $7 billion.
Democrats have nearly doubled the spending by Republican candidates up and down the ballot.
This much money spend to earn a job where most people make a few hundred thousand a year! Payback is always a bitch. It is always the people that pays the bills.
America’s Lobbying System is Broken | HuffPost Contributor"By Election Day, the presidential campaign is expected to end up seeing $6.6 billion in total spending, while congressional races are anticipated to finish with just over $7 billion."
As with everything else I am usually wrong! Just ask my wife!
Here you go. Brand new 11-speed with 105 for 1500CAD (plus 1 cent).
I think it’s important to compare apples with apples. A lot of bikes that people see as entry level road bikes nowadays (and that are marketed as such) come with disc brakes, carbon frames, more integrated parts / aero features. Plus the newer groupsets have trickled down technology. 5 years ago I would have said you should at least get 105. Nowadays I wouldn’t have a issue to recommend someone Tiagra for their first bike if they are on a budget.
Having thought about this more, maybe there is nothing to worry about.
Everything goes through declines, plateaus, and growth (just look at our fitness). If you believe in micro-cycles within macro-cycles, what I see is we’re going through a phase within a much bigger cycle.
This absolutely can’t keep growing at this rate forever. If it does, it is cancerous and we will have much bigger problems coming out the other end. But I’m more optimistic.
Remember all the COVID-induced “bike boom” conversations from 9 months back? Topics included complaints about drivers being more dangerous due to open roads, Freds and Families zerg rushing LBS’s, and speculation on what will happen with bikes once the craze stabilizes.
I recall cheeky folks mentioning they just can’t wait for all the “gently used, barely ridden SL6’/7’s to hit the used market” at rock bottom prices. Maybe that will be next month. Or next year. Or more like “gently used SL10’s”. Who knows – place your time horizon bets now.
My point is that day will eventually come (probably with its own new set of problems and circumstances we can’t see right now… careful what you wish for…). And we’re going to have to witness a lot of things that don’t jive with us until we get there. The best of this situation is no single company owns a monopoly on bikes.
Our mission is to be the best cycling brand in the world, and this mission reaches beyond just delivering the best cycling products. We recognize that the decisions we make have social and environmental impacts and that we are responsible for minimizing them.
Not a single word mentioned profits or costs. If they really wanted to totally “minimize” their environmental impact to zero they could cease business, but that’s not going to happen. Every choice they make in this regard will be balanced by the bottom line. I don’t see a bunch of poor, disadvantaged people riding Specialized bikes. As far as I know, they don’t even produce a more affordable line of bikes. That might be the “socially responsible” thing to do but they aren’t going to do it. Sure they can reduce the amount of plastic in the box when they ship bikes, build trails, or recycle carbon fiber, but don’t expect a discount for that. The last bike they introduced was a $13,000 road bike… is that socially responsible? Does the world really need another $13K bike?
Especially the latter part doesn’t go very well with taking advantage of a global pandemic which leaves many people around the globe without their livelihood. Not to mention losing loved ones.
If their costs go up and supplies get tight and demand goes up they will charge more.
Given the times we’re living through and the interruptions to both manufacturing and distribution supply chains, price increases are to be expected, and bike brands putting their prices up mid-season – or even just after launch – has been seen before. It happened after the financial crisis in 2008, for example, and rippled through to 2009. The COVID 19 pandemic has caused massive disruption to the world economy. For bike companies that has meant interruptions to their supply and distribution chains caused by lock downs and quarantines across the world – initially in China where much of the world’s bikes are made and then across all the markets those bikes are being shipped to in Europe, and North America. During the 2008 financial crash a number of the big bike companies essentially froze production freeing up factory slots for smaller outfits. This time around high levels of global demand mean that is not going to happen. In 2020 bike companies are desperate to get more bikes to market – the problem for them are all the hurdles put in the way as a consequence of the pandemic. Put those two things together and it’s not surprising that prices are going up. Specialized, Giant, and Canyon increase prices | road.cc
Are you certain about that? According to my information - especially when Covid started - there was a complete shutdown of some factories. As I’m living in Asia, I can assure you that there were and are huge impacts on all parts of life due to Covid. Regarding logistics for example, since there are fewer passenger planes in the air, less fright is transported (delays in the supply chain). Also, I heard of a shortage of certain reisins/chemicals that were necessary for carbon production and caused delays. Additionally, safety measurements cost time and workers stay (rightly) home if there is just a hint of sickness.
I know you claim you have a different first-hand experience - which I don’t doubt. But claiming that a global pandemic - that started in Asia - had zero effect on production and shipping capacities in Asia is something I find very very hard to believe (to say it nicely).
Even if (and that’s a big if!) the production capacities didn’t decline what remains is that the demand for bikes skyrocketed. Since there are actually just a few manufacturers who build all the frames (Canyon and Spesh don’t manufacture frames, they just buy them). Guess what happens if several bike brands want to increase their order numbers or renew contracts. I’m pretty sure the manufacturers sell their capacity to the brand that pays more/extra hence the price of the good increases.
Thanks for your reply and for sharing your insider knowledge. Regarding the manufacturing costs & transportation, I take your word for it since you seem to have a better insight.
I’ve not stayed up to date on this, but Trump was/had imposed tariffs on imports from China, and I thought it did cover bikes at one time? I thought maybe cyclingtips had an article on this, or maybe that was before the the taxes came in, and brands were estimating the impact.
If the transition to Biden happens, and he rolls back the trade war, and the tariffs go (assuming they’re still there), is the general view that we’d not really see any reduction in prices until the 2021 models? Alternatively a mid product year price drop or will importers/brands just take that as extra profit?
I’m due for an upgrade and move to a gravel bike in 2021 or perhaps 2022, and will ride out any price increases/tariffs that exist now, out of principle.
