We’ve seen strong downward pressure on bike prices for the past 120 days. all the big players have been in a downward spiral for retail pricing especially around the key $2500 price point.
Here’s my concern: The U.S. Dollar is at a significant low point against many foreign currencies. It is traditional for bike prices to be down at this time of year to capture delaer (and consumer) “Open to Buy” before it evaporates in pre-season commitments to competing vendors. On a few key models, vendors aren’t even taking any more orders on 2008 models.
These trends being present, are we poised for some price changes in the 1st quarter of '08?
Not sure about bikes, but I received notice from the US office of AMB timing that they would be raising prices of their chip timing equipment due to the current state of the US dollar against the Euro. Sucks big time. I am trying to hurry and get funds together to place an order before the end of the year, which is about 3 months before I was planning and budeted to do so.
I would think it would depend on how smart the company is. If they had hedged against the US dollar, then there would be no need to raise prices or very little. In the car industry, the most profitable car company last year was Porsche. They hedged against the US dollar and actually were making as much money on their hedges as their auto sales. And a Porsche sold in the US is still extremely less expensive here than sold anywhere else in the world. Now if some of the bigger bike companies did the same…
I think that most companies have priced to the levels the US market will bear, not to the exchange rate. Given that prices for gear have tended to be higher in the US than in other markets, I bet they hold the prices and accept lower margins here.
The real estate situation in the US has already depressed auto sales and I expect it could impact high-end bike sales as well, which will also help to maintain pressure to keep prices lower.