Impact of a recession on bike prices

Back by popular demand, the general all-things Road forum!

Moderator: robbosmans

LP119
Posts: 14
Joined: Thu Sep 22, 2022 11:01 am

by LP119

Hi all,

first time poster. I'd like your opinion on something that have been stopping me from commiting 100% to buying a new bike in the coming months. I'm from Canada and I'm in the market for either a TCR Advanced Pro 0 or a 2023 Cervelo Soloist Ultegra Di2. Both are close to 8500$ with tax and this is a significant amount of money for me and I currently own perfectly good road bike (2021 Defy Advanced Pro 2) so let's just say I do not really need a new road but I'd like to get something a little more sporty than my Defy.

With all this talk about an upcoming short recession (in Canada at least), I'm curious to know what you believe will happen to bike prices if demands finally drops (which you would expect to do in a recession)? Should I wait until next year to commit to a new bike or prices might be either the same or even higher? My hope is that this would reset the bike market and bring more reasonable prices in the future but prehaps I'm being way too optimistic.

Anyways, I'm looking forward to reading your opinions.

Cheers!

LP

Mocs123
Posts: 826
Joined: Tue May 11, 2021 9:19 pm

by Mocs123

My opinion (which doesn't mean a whole lot as I'm not an expert) is that if there is a recession, the MSRP of the bikes you are looking at are not likely to change, but the sale of expensive bikes will slow down -just as supply is catching back up - and you might find bike shops willing to sell at a more significnat discount, perticularly if they have the bike in inventory and want to move it. I think typical LBS markup (gross profit) is about 30% so don't expect huge discounts but I think you will find some.

The real question is will bike companies lower their wholesale prices - which seem to be highly inflated at this point.
2015 Wilier Zero.7 Rim - 6.37kg
2020 Trek Emonda SLR-7 Disc - 6.86kg
2023 Specialized SL7 - 7.18kg

by Weenie


Visit starbike.com Online Retailer for HighEnd cycling components
Great Prices ✓    Broad Selection ✓    Worldwide Delivery ✓

www.starbike.com



TLN
Posts: 630
Joined: Wed Jul 12, 2017 4:50 pm

by TLN

I can imagine some good deals on used/demo high-end bikes, less on new bikes. I can imagine that LBS are placing less orders because of excess inventory and upcoming recession to account for that. However lots of them are still sitting on inventory that they ordered and paid over a year ago.
That pretty much excludes Soloist from sales, but you can get a good deal on SL7 or something similar. I've seen some really good prices on fleabay, $4.5k for Force Etap with carbon wheels (not sure if PM was installed).

ps. I might be a bit biased, since I ride 60-61cm bikes that come at a discount.
His: Orbea Orca OMX
Hers: Cannondale Synapse HM Disc

User avatar
wheelsONfire
Posts: 6283
Joined: Mon Jul 07, 2014 8:15 am
Location: NorthEU

by wheelsONfire

Personally i don't believe bikes will sell at these new inflated prices. So sales might come up, but that means they end up at what they should have cost from the start so cheap, nja, i doubt that. I still see bikes not sold and they are expensive inspite of a new model. Example, Foil, S5 etc.
Bikes:

Ax Lightness Vial EVO Race (2019.01.03)
Open *UP* (2016.04.14)
Paduano Racing Fidia (kind of shelved)


Ex bike; Vial EVO D, Vial EVO Ultra, Scott Foil, Paduano ti bike.

Andrew69
Posts: 593
Joined: Thu Feb 19, 2009 10:52 am
Location: ɹǝpunuʍop

by Andrew69

Specialized dealers are already heavily discounting high end bikes here in Australia due to a slow down in sales.
But there is a catch, its MTB's only

Second hand prices for road bikes are defintely starting to come down and I cant see how Australia doesnt go into recession late this year or early next year, so it will be interesting to see if the road bike market holds up or dealers are forced to discount as well soon.

Nickldn
Posts: 1867
Joined: Mon Mar 25, 2019 12:35 am

by Nickldn

Unfortunately for us, road bikes are just a small and fragmented part of the cycling industry.

Companies like Shimano and SRAM, avoided upping production capacity during the pandemic and bike manufacturers like Specialized and Trek outsourced their frame production a long time ago. All this means a downturn in sales will not result in massive oversupply and so reduced prices. Yes, I expect high end bikes will be reduced by dealers with too much stock, but don't expect this to be a long term trend. Supply will shrink next year.

Clothing is another story. I expect there will be heavy discounts for a while, as there seems to be lots of unsold stock floating around.

I'm currently in Porta Pollença, the epicentre of cycling in Majorca, a small island in the Med. It's warm and yes there are lots of cyclists milling around, hire shops seem busy, but clothing and accessory shops are dead.
Giant Propel Advanced SL Red Etap 11s Easton EC90 wheels CeramicSpeed BB Zipp SL70 bars 6.5kg

Vitus ZX1 CRS Campy Chorus 12s Bora WTO 45 disk brake wheels Zipp SL70 bars 7.5kg

SL8 build with Craft CS5060 Wheels in progress

User avatar
wheelsONfire
Posts: 6283
Joined: Mon Jul 07, 2014 8:15 am
Location: NorthEU

by wheelsONfire

For many price increases will bring our consuming impulse down, we're forced more or less.
I don't expect the masses of bikers will see a new super expensive bike as the first prio.
How many can afford paying 10K Euro + for a new bike which in all honesty, is something they don't need!?
If i would look at my bike and the spec, it would be over 10K Euro for mostly just picking up 12 speed and disc brakes.
It's simply crazy. I just checked buying parts and buidling a bike, but the price is just beyond manageble.
It wasn't to many years ago even Wiggle had a big batch of Pinarello framesets they sold off at 40-50% off retail.
The Dogma models aren't even close in production numbers to Trek, Spesh, Scott, Cervelo yada yada.
Ax Lightness are a niche brand now since it's Benotti. All framesets are built first when ordered.
That alone should say something about how things are. Paying premium + would (atleast to me) mean the economy have to be way more than just afloat.
The war in Ukraine and the aftershocks of covid has made living in EU way more expensive. Again, that must for sure be obvious in the market to.
Bikes:

Ax Lightness Vial EVO Race (2019.01.03)
Open *UP* (2016.04.14)
Paduano Racing Fidia (kind of shelved)


Ex bike; Vial EVO D, Vial EVO Ultra, Scott Foil, Paduano ti bike.

lemeneid
Posts: 45
Joined: Sat Aug 27, 2022 3:22 pm

by lemeneid

It depends where you are in my opinion. Now with the weak Euro and GBP, it's a great opportunity to buy components from Europe at really great prices. As for frames, you can pick up a nice previous generation frame for good value, don't expect to get a current year frame cheap. Colnagos and Bianchi spring to mind.

seventyseven
Posts: 50
Joined: Thu Sep 22, 2022 11:49 pm

by seventyseven

On that note, any recommendations for EU-based stores that ship to Canada, especially if they ignore Shimano's stupid embargoes? I know Merlin does. The CAD was basically at a 10 year high vs the Euro for a little bit this month and is still relatively strong.

patchandscruff
Posts: 141
Joined: Fri Apr 22, 2022 8:58 am

by patchandscruff

The last major recession (2007/2008) made zero difference to the bike market. And as for the people buying the high end bikes - they'll be the ones who are the least affected by fluctuations in finances. Put it this way - my wife is an interior designer. Her clients continue to spend thousands and thousands on homes and redecorating regardless of how the world is spinning. It's always been the way for her. Colnagos, Pinarellos, S-Works and Enve etc will still fly out the door.

Sure you might get a discount here and there – but don’t expect it to be knock down sales.

pmprego
Posts: 2513
Joined: Mon Jan 21, 2019 3:16 pm

by pmprego

Consumer products prices do not go down like petrol or even house prices go.

After a 10% inflation period, the normalization is not following it with a 10% reduction (or deflation). When a phone raises in price, it does not drop the following year. Eventually, the price is put at the same level (which if one assumes inflation in the background it actually.correaponds to a reduction in the real price of the product).

In conclusion, in the following months (to a year maximum), shops may have discounts slightly bigger than usual but that's it. For 2023 manufacturers will at most keep new prices stable but adjust supply to a depressed demand. Do not expect prices drop.

LP119
Posts: 14
Joined: Thu Sep 22, 2022 11:01 am

by LP119

I'm also thinking prices are going to come down even with the supressed demand. Hopefully it will mean prices will be stable for the coming 1-2 years and that product availibilty will be able to recover to pre-pandemic level with the help of the lower demands. I do agree that bikes are basically luxury items these days and wealthy peoples aren't going to be affected much by the recession and therefore demand for high-end bikes will most likely remain the same.

RDY
Posts: 2356
Joined: Thu Jul 30, 2020 10:31 pm

by RDY

They'll cut production and hoard stock and increase prices, most likely, if there is a serious global recession. But I don't think it will effect high end bike demand anyway. Almost every recession / economic shock redistributes income away from poor and low-middle earners, and leaves the whales unaffected.

gruppetto
Posts: 133
Joined: Thu Dec 03, 2020 12:17 pm

by gruppetto

Andrew69 wrote:
Thu Sep 29, 2022 10:11 pm
Specialized dealers are already heavily discounting high end bikes here in Australia due to a slow down in sales.
But there is a catch, its MTB's only

Second hand prices for road bikes are defintely starting to come down and I cant see how Australia doesnt go into recession late this year or early next year, so it will be interesting to see if the road bike market holds up or dealers are forced to discount as well soon.
There might be another reason. I am not sure about Australia but in Europe Specialized is terminating a lot of contracts with their bike shops in a push to strengthen their direct sales (while you still pick up your bike at the LBS). A lot of the dealers with those terminated contracts are now trying to clear their stock.
Rumor is that the new contracts also include some kind of fixed prices. Which makes sense from a brands perspective.

Attermann
Posts: 916
Joined: Sun Jan 05, 2014 11:04 pm
Location: Denmark

by Attermann

fixed price isn't allowed in europe, so that would be a stupid move.

by Weenie


Visit starbike.com Online Retailer for HighEnd cycling components
Great Prices ✓    Broad Selection ✓    Worldwide Delivery ✓

www.starbike.com



Post Reply