How much does a top end road bike really cost?

[Rick]

"Really cost" does not have a well-defined meaning.
All the material and component suppliers all have the same desire to make a profit that the final bicycle seller has. Do their "real costs" go into it ?

I think of it this way: after you have spent about $1000 in today's market, if you are not winning races it is not because of the bike.
I have spent a lot more, but just because I want to have frilly niceties.

[RyanH]

I see this other way : Dogma f8 + DA Di2+ Shimano C50 cost around 10.000€ . New VW Polo in Spain cost 9.000€ . New BMW motorbike around same .

The comparison is flawed. Compare a $10k road bike to a Ferrari or even an F1 car. Compare a $3k carbon road bike with ultegra to bmw. And compare a $350 bicycle to your $10k Polo.

WHY should I ?

[...]

Stormur, because your logic is flawed. Price is a function of volume, costs and expected return on investment. Patek Philippe chooses the very low volume, very high cost approach to achieve an acceptable level of profitability on their USD$20K+ watches. Different industries have different average acceptable levels of profitability (return on invested capital is more appropriate). The higher the risk, the higher the expected return on invested capital. In relatively efficient markets, companies generally do not make hand over fist profits, at least not for long. Competitors come in and force legacy companies to either innovate (increasing costs) or drop prices.

Granted, it's possible that Pinarello may be an exception to the rule above, like say Pegoretti, but who knows.

If you're having trouble with the cost of bikes, don't get into photography (Canon L lenses range from $1K to $12K), high end speakers (B&W Nautilus speakers run $60K or Wilson Audio runs in the $100K range for something that's basically wood, copper and speakers), firearms ($4K for a rifle, plus $3K for a scope) or watches, to name a few.

[rgamble]

SIDI Mag1 motorcycle boots go for ~ $495 same as their Ergo whatevers wire bike shoes. What planet is this again?

[fromtrektocolnago]

What's the point? Unless you're dealing with a Serotta going out of business or a close out on a discontinued frame you're not likely to be able to purchase a bike at raw cost as defined here(material +engineering). I also agree that certain costs are simply too vague or assumption driven such as depreciation of a machine on the plant floor or the cost of a building.

[AJS914]

WHY should I ?

I see ( example ) Pina Dogma f8 and Piaggio MP3 ( same price, both best in class, both Italian, both from market leaders....bla bla ) and I wonder why they cost same ?

Explain, why Dogma should cost same as MP3, please.

They cost the same because that is what the market will bear. It's a basic principle of economics. If you want to look at how pinerello gets the price up there, that can be broken down. So you add in manufacturing, Italian hand-madeness, and then marketing. I'm sure it's not cheap to have froome and sky ride your bike. All this creates a mystique around the brand and the product thus that it gets in to the same area as say a Rolex.

Is a dogma frame intrinsically worth $6,000? Certainly not if the criteria is winning races. Froome could have won the tour on a $2000 frameset or maybe even a $1500 frameset.

[losdoyers]

Italian hand-madeness

Aren't Pinarello's made in Taiwan, then painted in Italy?

[losdoyers]

Just kidding, didn't try to sound picky!

[stormur]

I see this other way : Dogma f8 + DA Di2+ Shimano C50 cost around 10.000€ . New VW Polo in Spain cost 9.000€ . New BMW motorbike around same .

The comparison is flawed. Compare a $10k road bike to a Ferrari or even an F1 car. Compare a $3k carbon road bike with ultegra to bmw. And compare a $350 bicycle to your $10k Polo.

WHY should I ?

[...]

Stormur, because your logic is flawed. Price is a function of volume, costs and expected return on investment. Patek Philippe chooses the very low volume, very high cost approach to achieve an acceptable level of profitability on their USD$20K+ watches. Different industries have different average acceptable levels of profitability (return on invested capital is more appropriate). The higher the risk, the higher the expected return on invested capital. In relatively efficient markets, companies generally do not make hand over fist profits, at least not for long. Competitors come in and force legacy companies to either innovate (increasing costs) or drop prices.

Granted, it's possible that Pinarello may be an exception to the rule above, like say Pegoretti, but who knows.

If you're having trouble with the cost of bikes, don't get into photography (Canon L lenses range from $1K to $12K), high end speakers (B&W Nautilus speakers run $60K or Wilson Audio runs in the $100K range for something that's basically wood, copper and speakers), firearms ($4K for a rifle, plus $3K for a scope) or watches, to name a few.

It's not Patek is not mass production item, Pinarello is. Patek is not made in China, Pinarello is... To manufacture Patek you need to employ knowledge and skills which cost plenty of CHF and is very limited number of peolpe able to build such a watch, Pinarello order product according to their specs from outsourced company , which is plenty all over the world, and establishing new one is cheaper than basically opening any other manufacturing business. Patek has gold/ platinum / sapphire / diamond in it, Pinarello burned fabric and glue .... No sophisticated technology there... just stuff which is manufactured in milions of sqm(cf) and thousands of tons ( resin) .

You can produce unlimited amount of Dogma. Try this with Patek...

Bike manufacturers will give you 4 bearings instead of bushings ( total cost of 0,5€ ) and charge for part 150€ more....


You can call this "justified" - I won't. Bicycle CAN'T cost same money as car does. Period.

PS . I do have L lenses. it starts from 500€ ( btw the cheapest is the sharpest one ) - and still, having most sophisticated optics system, it cost less than bicycle. And it can cost so much because it's for professionals, and it is tool to make money on it. Simple as that, so no comparison here.

Did I mention, photography is "scam" as well in my 1st post in topic ? I did. MF lenses is bigger scam than any L... digital backs for MF/LF even bigger... but this is tool to work, so it's not comparable at all.

[tranzformer]

When road bikes start costing the same as a Ducati 848, then you know something is wrong.

[RyanH]

My build costs more than a car, but I'm sure that many of the component makers that I purchased from are not swimming in money (Tune, Extralite, Fibre-Lyte). Same probably goes for my Litespeed frame and RZR wheels. Did I get a better value then? If the sum of these things should not have been greater than the cost of a small car, then what parts should have been sold for less and why?

Sent from my SCH-I545 using Tapatalk

[eagle34]

Really interesting opinions here. Another thought that popped into my head: how much more does a bike company spend making a top end frame than a low end frame?

For many road frames the difference between the top of the line and regular model is just a difference in material, while having the exact same geometry; often times consumers almost pay double for higher end frame, but how much does the bike company spend on the material upgrade?

[tinozee]

$7500. No, it depends. I never buy completes but 2k for wheels, 2.5k frame, 2k group, 1k cockpit and saddle. Something like that. Top end is relative and opinion. I personally like factory racing setups over boutique stuff. But it's just me. I also agree 100% that it's the rider that makes the speed in racing and it's often better to race a alu bike with cheap group, maybe nice wheels.

[mattr]

but how much does the bike company spend on the material upgrade?

given an identical mold, the difference is negligible. Depending on material availability and new layups, you'll be looking at between 15-50% extra. Which might take the total manufacturing cost from maybe 300 to 450 dollars.
And retail price from 2000 to 5000.

Last time I was close enough to the industry to know actual costs, the huge brand (10s of thousands of bikes a year) would manufacture top end ti frames in house for £150-175 and push a complete xtr equipped bike out of the door for about £750-800, retail £3199, the medium sized (1000s of bikes a year) would buy their ti from Taiwan for between 200-250. Complete xtr bike cost them about 1100 (smaller volumes, less discounts from suppliers) retail was also about £3200, the boutique brand made their bikes in house (several hundred a year) frames were about 500-550 ready to build, a complete xtr bike cost them nearer 2000. (Never got decent figures as almost all their bikes were custom) retail was about £4k

[XCProMD]

I see this other way : Dogma f8 + DA Di2+ Shimano C50 cost around 10.000€ . New VW Polo in Spain cost 9.000€ . New BMW motorbike around same .

The comparison is flawed. Compare a $10k road bike to a Ferrari or even an F1 car. Compare a $3k carbon road bike with ultegra to bmw. And compare a $350 bicycle to your $10k Polo.

Exactly. Ferrari makes 7000 cars a year. Some of the top end bikes don't sell 7000 units a year.

Then, a Polo, or any other car has it's body (the most expensive part, more than engine+drivetrain) stamped and robot welded in awfully automated process. You just can't do that when you TIG weld a bicycle frame. No need to mention laying up carbon fiber into a bladder/mold unit.

About carbon fiber, Alfa Romeo has the cheapest car in production with a chassis made of carbon fiber. It starts at 70000€ with a 4Cyl 240HP engine. That's something you can start to compare with a high end bike. The process to build the chassis is pretty similar, albeit Alfa Romeo has been able to industrialise the whole thing a lot more: they plan to do 3000 of those cars next year, this year they have probably made some 2000.

[wingguy]

Margin on bikes is HUGE. Have proof for one of "premium" frame manufacturers : Retail price of frameset : 2720€, price paid by big dealer ( not biggest ) : 1050€, cost of manufacturing frame, incl import to EU, taxes ... 300€.

Yeah? Supply the proof, otherwise you just made that up.

No respected brand has any where near that retail/wholesale markup, unless you're being disingenuous and giving an end of season clearance price from the distributor. Even then it would be exceptionally good!