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6/09/2005

NOTICE: THIS BLOG HAS MOVED. CLICK HERE FOR NEW SITE

Will carbon fiber shortages hurt the industry?

BraIN and BikeBiz have recently covered the worldwide shortage of carbon fiber. For the bicycle industry, this will have a number of ramifications as prices potentially skyrocket due to high demand and low availability. What will it all mean?

A number of things come to mind for me, since I am working on bringing my company's first all-carbon bike to market. We've sweated and toiled over this new bike and we're very proud of it. Fortunately we've already got standing orders with our factory, so we will hopefully be impacted minimally. However, just like everybody else in the cycling industry, we don't really know.

As it turns out, according to the article in BRaIN, the shortage primarily effects the carbon fiber that is used cosmetically on most bikes and carbon parts- that outer weave that you see when you stare lovingly at a carbon doo-dad. So if you are painting your carbon frames, you will probably see very little impact on your business (is one hypothesis). I wonder how many carbon bikes will be fully painted soon, rather than showing off the "black gold" it is made of.

Many makers are experiencing huge jumps in costs, upwards of 25%, for their carbon. This would logically mean that retail prices would climb. With as fiercely competitive a marketplace as we work in and the fact that consumers are getting so used to "cheap" carbon fiber now, I wonder if that will be true. I wonder, and I am really scratching my head on this one, will manufacturers be willing to ride this out by reducing their profit margins to remain price competitive? Will retailers live with lower margins as well? Will both work together to absorb the lower profitability of carbon? Or, and this is what truly makes the most sense to me for a healthy industry, will the industry work to educate the consumers as to the cause for the sudden increase in retail prices? I think that many consumers will understand what is happening and will live with the price increases that come, so long as they are reasonable.

Most experts seem to agree that the shortage, caused primarily by the aerospace industry, will not last forever. Can we all agree to live with what that means? Will the cutthroat pricing of the past slacken a little to reflect reality a little better?

Managing a brand that is bringing its first carbon bike to life, I am hoping that things will remain relatively stable. However, more altruistically, I am hoping that things work out for the health of the entire industry.

1 Comments:

At 5:52 PM, June 11, 2005, Blogger steelrider said...

Thank goodness there is no shortage in steel or aluminum

 

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