Some more details, from the WBR site...
Through close partnerships with our suppliers, we were able to hold back any bicycle cost increases for two years. Unfortunately, in the face of rising costs across the board, the price for our bicycles increased from $109 per bike delivered into the field, to a new price of $134, as of July 15, 2008.
Our primary suppliers (Tata Industries India, Velosteel Czech Republic and Tata Zambia Ltd.) did a great job in holding prices in the face of increasing steel costs, a declining U.S. dollar (USD), and increases in transport costs. Our initial contract that brought our heavy-duty bikes into the field for $109 was negotiated in September 2006. Since that time, major changes occurred that directly affected our costs:
Cost of steel: increase by 78%. The robust nature of these bicycles means we use a lot of steel.
Cost of oil: increase by 101%. This affects every level of transportation, from rail, to sea freight, to trucking but not transport by bicycle!
Dollar to Rupee: USD decreased by 8%. We purchase a high percentage of our parts out of India.
Dollar to Euro: USD decreased by 18%. We purchase rear hubs and air pumps from the Czech Republic and Germany.
Dollar to Zambian Kwacha: USD decreased by 20%. As you might expect, a significant part of our operating expenses occurs in Zambia.
We worked closely with our supplier base to keep the increase as low as possible while still maintaining the level of quality, robustness and performance that our program demands. All-in, the new cost of a bike fully assembled and delivered into the field is $134.00 a 23% increase. This price also includes a portion designated for the Field Mechanics Maintenance and Training program, independent Measuring and Evaluation and field management.
As always, we strive to manage costs where possible without compromising on our commitment to quality. We thank our suppliers for working closely with us to mitigate these cost increases, and in giving us early warning of this inevitability.
Our donors can be assured that we continue working to maximize the impact of each of their dollars contributed to World Bicycle Relief. This price increase is unfortunate, but our supplier base is committed, and the programs are strengthening every day. The Power of Bicycles is empowering people in a way that is sustainable and scaleable, and will have a lasting impact on their lives.
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