Continental Aero 111

[warthog101]

Ugh. No. It does represent what the market is willing to pay. We don't know that the price is out of line with the rest of their portfolio with regards to margin.

Don't agree with this one though

[apr46]

I think we can agree that this tire should be both excellent and last at least 2 rear tires or we will be very annoyed.

[warthog101]

Done

[Requiem84]

You have no idea what those costs are and how they relate to the per unit price...

I brought the information we could find, which suggests that the margins are pretty low for the whole company. If they have a product above that line, they would rationally optimize the pricing to maximize their returns. Of course, there are variations by product, but another way of saying my point is that it's doubtful that the pricing model is disconnected from the GP5000, which is, in turn, unlikely to be that disconnected from the numbers in the table.

The point i was supporting that these are not priced as luxury products is one I brought to the discussion in response to points others had made and the direction where I felt the conversation was heading. No mind reading here. Probably.

Is this wrong then?

I'm happy to buy into the fact that the notches create vortices and promote stability, but that's about it. The price is needlessly high, the production cost to Continental must be very close to that of a normal 5000. OK so they have to recoup some research cost and the mould cost but wouldn't say 99 Euros have been a bit more palatable?!

Seems to represent the situation fairly well to me.

The bolded part is wrong.

There is no requirement (or need) to price a product in relation to its (production/R&D cost).

The price is what the market is willing to pay. If the price is 'needlessley high', sales will drop and Conti will reduce the price.

It's really pretty basic.

What you are saying is: 'the price is too high for me. That shows you are (for this product at least) not the standard market.

We agree then. The price does not reflect development and production cost. It represents what the market is willing to pay. Perhaps it will come down when there are competing products and if they are more reasonably priced. That is not a given though. We will see.

Yeah, very very few prices reflect actual cost.

[Lina]

It sounds like warthog needs to either buy some Continental stock or start a competing business. Because surely both will bring in boatloads of money since Continental is ripping us all off and people are dumbasses for paying for it.

[warthog101]

It sounds like warthog needs to either buy some Continental stock or start a competing business. Because surely both will bring in boatloads of money since Continental is ripping us all off and people are dumbasses for paying for it.

Another pleasant interaction with you. Always a joy to talk.

[cyclespeed]

Ugh. No. It does represent what the market is willing to pay. We don't know that the price is out of line with the rest of their portfolio with regards to margin.

Are you a consultant by any chance? Do not agree with this.

This 111 is essentially a GP5000 with chunks cut out. It does NOT cost twice as much to make as a normal GP5000.

As with any new 'star' product that supposedly gives some kind of novel gain or advantage, people will pay up for it and Continental know that. No doubt production is limited at the moment, so why not set the price as high as possible and see what happens? I would.

Keen, wealthy cyclists will buy what stock there is for now at these super high prices, and then the next latest, greatest thing will come out, they'll get bored and move on to that, and then prices will drop. If a GP5000S TR sells for 60 Euros (online), then I see no reason why a 111 shouldn't eventually be about 70.

[TobinHatesYou]

Ugh. No. It does represent what the market is willing to pay. We don't know that the price is out of line with the rest of their portfolio with regards to margin.

Are you a consultant by any chance? Do not agree with this.

This 111 is essentially a GP5000 with chunks cut out. It does NOT cost twice as much to make as a normal GP5000.

As with any new 'star' product that supposedly gives some kind of novel gain or advantage, people will pay up for it and Continental know that. No doubt production is limited at the moment, so why not set the price as high as possible and see what happens? I would.

Keen, wealthy cyclists will buy what stock there is for now at these super high prices, and then the next latest, greatest thing will come out, they'll get bored and move on to that, and then prices will drop. If a GP5000S TR sells for 60 Euros (online), then I see no reason why a 111 shouldn't eventually be about 70.

It’s safe to assume that hundreds of Grand Prix 5000 S TRs are made for every Aero 111. So take the additional CFD, wind tunnel testing, outdoor testing, payments to SwissSide, etc. Combine those costs with extremely low sales volume, and here we are. Also the Grand Prix 4 Season has a US$77 MSRP, and I think that’s a far less appropriate price for a tire that was developed over 20 years ago.

[warthog101]

With the Aero 111 testing faster than the S TR it isn't safe to assume the volume differential will remain so pronounced if it is even the case. 100:1 seems a bit large.
I remember the attack and force combination Conti used to produce and I don't recall anywhere near the price differential.

[alanyu]

I have a crazy idea. If you get, let's say 5000 TL for the tread thickness instead of 5000 STR, and then find someone to laser etch those vortex generators. It 's not neccessary to be the exactly same size/depth. It could be much cheaper, right? You just don't get the high grip of 111.

[TobinHatesYou]

With the Aero 111 testing faster than the S TR it isn't safe to assume the volume differential will remain so pronounced if it is even the case. 100:1 seems a bit large.
I remember the attack and force combination Conti used to produce and I don't recall anywhere near the price differential.

You have to remember that while two e-commerce sites might have 1000 Aero 111s in stock, there are over ten thousand independent bike dealers, sporting goods, outdoor shops and e-commerce sites in the US alone. If each of these shops has 10 GP5Ks, that’s at least 50:1 right there. Now consider that Competitive Cyclist by itself has 100s of GP5K S TRs in stock, Bike Tires Direct probably has as many or more, and Amazon surely has even more? And then you know, the rest of the world sells GP5Ks too.

[warthog101]

With the Aero 111 testing faster than the S TR it isn't safe to assume the volume differential will remain so pronounced if it is even the case. 100:1 seems a bit large.
I remember the attack and force combination Conti used to produce and I don't recall anywhere near the price differential.

You have to remember that while two e-commerce sites might have 1000 Aero 111s in stock, there are over ten thousand independent bike dealers, sporting goods, outdoor shops and e-commerce sites in the US alone. If each of these shops has 10 GP5Ks, that’s at least 50:1 right there. Now consider that Competitive Cyclist by itself has 100s of GP5K S TRs in stock, Bike Tires Direct probably has as many or more, and Amazon surely has even more? And then you know, the rest of the world sells GP5Ks too.

Were reduced volume the reason for the price increase that would be easily addressed by producing more. It is pretty safe to assume they would sell as many as the S TR at the same price given it is a faster tyre.

[alanyu]

With the Aero 111 testing faster than the S TR it isn't safe to assume the volume differential will remain so pronounced if it is even the case. 100:1 seems a bit large.
I remember the attack and force combination Conti used to produce and I don't recall anywhere near the price differential.

You have to remember that while two e-commerce sites might have 1000 Aero 111s in stock, there are over ten thousand independent bike dealers, sporting goods, outdoor shops and e-commerce sites in the US alone. If each of these shops has 10 GP5Ks, that’s at least 50:1 right there. Now consider that Competitive Cyclist by itself has 100s of GP5K S TRs in stock, Bike Tires Direct probably has as many or more, and Amazon surely has even more? And then you know, the rest of the world sells GP5Ks too.

In Europe, only SwissSide and Bike24 are selling 111s... IIRC, Bike-discount (or maybe Bike-components?) had selling them for a short while but not (allowed) anymore.

[warthog101]

Competitive Cyclist has a whopping 848 of the 29mm in stock, 332 of the 26mm.

Not seeing it justifying the price personally.

[TobinHatesYou]

With the Aero 111 testing faster than the S TR it isn't safe to assume the volume differential will remain so pronounced if it is even the case. 100:1 seems a bit large.
I remember the attack and force combination Conti used to produce and I don't recall anywhere near the price differential.

You have to remember that while two e-commerce sites might have 1000 Aero 111s in stock, there are over ten thousand independent bike dealers, sporting goods, outdoor shops and e-commerce sites in the US alone. If each of these shops has 10 GP5Ks, that’s at least 50:1 right there. Now consider that Competitive Cyclist by itself has 100s of GP5K S TRs in stock, Bike Tires Direct probably has as many or more, and Amazon surely has even more? And then you know, the rest of the world sells GP5Ks too.

Were reduced volume the reason for the price increase that would be easily addressed by producing more. It is pretty safe to assume they would sell as many as the S TR at the same price given it is a faster tyre.

I think you’re vastly overestimating just how many people care about aero. People on this forum don’t even care enough about it. Why would Continental divert resources from GP5K production to the Aero 111 when they can barely keep up with GP5K demand already?