It seems that whenever mainstream media talks about road bikes, Italian brands feature frequently as the ultimate representation of our aspirations while, in contrast, those from Taiwan are suggested as affordable stepping stones to something better. But despite powerful brand narratives, virtually all famous Italian brands have pivoted to Taiwan (or further afield in Asia) for manufacturing purposes.
So here’s the question: can the premium coverage (and often premium prices) that Italian brands command over their Taiwanese counterparts be justified?
In Cycling iQ’s latest article for Cycling Tips, we take a closer look at the pillars on which the Italian brands’ narratives have been built, explore the rise of Taiwanese brands and talk to industry leaders on either side of the divide to see if there’s a clear answer.
To the article
I still can’t fathom the reason why the price tag of a road bike frame (Dogma F8) from a notable Italian brand which is now made in Asia can soar to $6,000 usd pushing a bicycle up to the $10-12k mark. Are yo kidding me? Especially after CyclingIQ’s Verticle Limit article and the knowledge that I can buy a brand new Harley Street for $6,849 or even get a Ducati Monster 821 Dark for a shade over 10g’s and am sure I can get it under $10k with a little finagling. Lets see if something is wrong with this picture. A bicycle with maybe somewhere over 100 parts, if you take apart every caliper spring, washer, spacer, nut and bolt compared to a motorcycle with an internal combustion engine and 1,000’s of parts and pieces that are highly engineered and thoroughly tested. The one with the 1,000’s highly engineered parts is cheaper you say?
We all know that most high end carbon bike frames are produced in Asia for between $400-$600.
We know as a consumer that we can all buy carbon fiber for $20 per lb. Lets assume they pay the same and DON”T buy it wholesale at a big discount. So Pina has some new TorayHype carbon? What is the cost of that? Maybe $22-24 per lb. They say it is extra stiff but I think the only thing extra stiff are the Pinarello executives when they are cashing their paychecks at the local bank. Oh, I am sorry, did I say local bank? I probably meant Swiss bank account. R&D does not cost so much that the frame has to be marked up 1,000%. If you double a frame cost from Asia to $1,000 and add on $1 for R&D and sell 1 million of that model you get $1,000,000 for R%D. You add $10 you get $10,000,000. The cost of R&D of a bicycle frame does not cost 100 million or 1 billion dollars. You spend 100-200 hours designing it on a computer, you make a prototype and send it to a wind tunnel for 10-20 hours, go back and redesign a few things and back to the wind tunnel for 8-10 hours. Wash, rinse and repeat a couple time and then stick it on a test rig for a few weeks which is highly automated. The tooling is not that much ….. as compared to the tooling needed for the 1,000’s of parts for a motorcycle.
It used to be when I was growing up in the US that if a company made a 10% profit that it was considered profitable. If they made 15-20% they were highly profitable. If they made 25-30% they were killing it. These days a corporation is not happy with those profits. They want 100% profit, 200% or even 800% if they can get it. Then with the information super-age most corporations realized that all they had to do was employ some consumer research, consumer psychology, and up the perceived value of their product through fancy words and advertising coupled with the knowledge that basic consumers were stupid and ready to part with their money because they didn’t understand the value and power of on lone dollar, that they could get several hundred times more for their product than what it was worth. These corporate executives are both extremely disconnected from the average consumer and under denial of the implications of the problems proliferated by the vast capitalistic global greed issue operating under the assumption that most or all consumers make a 6 figure income and have disposable income galore. These brands did not move to Asia to produce their bikes because they could not compete otherwise or that the consumer was asking for a good value for their dollar. They did it because they could not offer the consumer that good value for their dollar and still keep making billions. They would only make millions and that was not enough when they seen their competitors making billions. I blame greedy western capitalism, Microsoft, and Wall Street.
The pricing structure of the whole bicycle industry is disgusting and appalling. They have been making billions of profits on the consumer cash cow for decades and it is time for the consumers to finally wake up and refuse to be milked dry. Note to the bike industry: most of us are not as stupid as you want to think we are. But then for every person that has a hard time justifying a bicycle that costs over $3,000 there is one who apparently has more money than God and is willing to purchase an $18,000 Limited Edition McLaren Venge. If any of you are reading this and want to donate a fraction of a percent of your disposable millions to make your brand owner, billionaire buddies to help make them richer and for me to have a nice bike then contact me at email@example.com Donations excepted to the OBM/ODM/OEM billionaire fund.