Giant is Going VERY Low on CF

[DirtyWorks]

There's a rumor that Giant is expanding a popular very low-end full carbon framed bike selling exclusively in Taiwan at the moment.

If this happens in North America, the enormous number of small and mid-sized brands selling through independent shops will be put out of business in the next couple of years. (brands like kona comes to mind...)

An important point worth mentioning is it may be branded a Specialized or Trek product. I recall both have been Giant customers. My recollection could be faulty though...

 

[fujisst]

So.
Market forces dictate the winners and losers.
If the smaller guys can't compete, better soon they get out of the kitchen.
Low cost will be appealing to many consumers who get sticker shock by some of the more established companies offerings...

 

[bc_hills]

I'm waiting for a cheap Starbucks branded cf frame.

 

[RDV4ROUBAIX]

Kona won't go out of biz anytime soon, they've got a HUGE customer base for a 'smaller' company. Last year about this time BRAIN published very interesting article that the big brand shop sales were actually down in comparison to the smaller specialty shops.

 

[bc_hills]

Hey Dirty, I was just thinking about your post a bit more, and why'd you pick Kona as a brand with the most to lose? When I think Kona I think alu mtb rigs, dh in particular, but that might just be a regional thing. I would never of thought of Kona as having a lot riding on cf offerings.

Lower margins hurt everyone I think. Even consumers in the end.

 

[Damiano Machiavelli]

This seems to be the end of a natural cycle. In the beginning huge premiums can be charged because the consumer is convinced that he getting something high tech. For carbon this was double plus good because manufacturing costs went down as prices went up. Eventually the tech becomes so commonplace that it becomes harder and harder to justify the premium. At the same time those at the lower end of the market are willing to charge less and less to get their piece of the pie. In the end, as the product becomes a commodity, the larger manufacturers use their low cost production to drive the smaller players out of the market.

The availability of open mold frames has been percolating up from the bottom of the market. It is still at the homebrew stage, but eventually it will have a huge effect by compressing the profit margins of all but the most desirable brands. The smaller players that cannot afford to buy their way into World Tour sponsorship will be crushed. The big, actual manufacturers like Giant will expand to occupy the space until they hit the cheapo no-name level.

 

[DirtyWorks]

Hey Dirty, I was just thinking about your post a bit more, and why'd you pick Kona as a brand with the most to lose? When I think Kona I think alu mtb rigs, dh in particular, but that might just be a regional thing. I would never of thought of Kona as having a lot riding on cf offerings.

Lower margins hurt everyone I think. Even consumers in the end.

I would not say they have the most to lose. Kona is *very* successful at flipping OEM'd product. That's why I thought of them. There are other brands doing the same thing, though not so successfully. They will go down.

Essentially, Giant is driving away the 'middle market' product.

For those of you spending nearer five-figures on a bike, your prices will go up. Otherwise, lookout below!

 

[rgmerk]

Is it any good?

I know this question seems almost irrelevant sometimes in the bike business, but is this el-cheapo CF frame actually any better than their aluminium ones?

The current entry-level CF frames from Giant, AFAICT, do ride better than aluminium (which was important to me because the road buzz was hurting my hands really badly). But aside from that there seemed to be ******-all difference.

 

[simo1733]

I have a Tcr composite and an aluminum OCR.I much prefer the Tcr not just in comfort but handling.Although having ridden both bikes around my after work training ride hundreds of times, the stopwatch agrees with you that there is f*** all difference.

 

[Bustedknuckle]

There's a rumor that Giant is expanding a popular very low-end full carbon framed bike selling exclusively in Taiwan at the moment.

If this happens in North America, the enormous number of small and mid-sized brands selling through independent shops will be put out of business in the next couple of years. (brands like kona comes to mind...)

An important point worth mentioning is it may be branded a Specialized or Trek product. I recall both have been Giant customers. My recollection could be faulty though...

http://cgi.ebay.com/Pro-700C-Carbon-Fiber-Racing-Frame-Road-Bicycle-NT10-/190547393933

Old news. carbon is cheap, decals are cheap. Even this guy is making money selling these.

 

[washedup]

Smaller companies have been put under pressure by China and Taiwan, but they could have predicted this 15 years ago.

That being said, every company had a choice. Either differentiate or die. This has led to huge advances in bikes. Trek stopped sitting on their thumbs, Specialized made better frames (not forks though), etc.

If Cervelo can start up and make a strong offering, then there is still opportunity out there. They simply had to make something special.

For Kona, I think they are actually sort of boring. But at the same rate I know some people who love the style. Again, this has saved them.

What happened to GT? They stopped innovating and started focusing on costs. Remember when they had 5 top end frames to choose from? It used to be a race company at the top, and that image trickled down to the rest of the line. Now they "make" junk.

A smart company would have gone to China 5-10 years ago and started a factory. Of course, good luck importing to the EU!

 

[RDV4ROUBAIX]

Industry prices are rising like mad in Asia, the next frontier for US bike Co's looking for cheap labor is Mexico. Been producing carbon fiber in Mexico City for a few years now, soon for bikes if not already.

 

[racer1192]

I live for the day when Chinese carbon is no longer needed or desired. I have gone back to Ti. A much better ride. Many of my friends here have also. I have spent the last decade in China, and let me tell you, you don't want these people making frames or components for you out of a material that can just fail. Take a trip to a factory here sometime, and that will get you off the carbon.

 

[fujisst]

I live for the day when Chinese carbon is no longer needed or desired. I have gone back to Ti. A much better ride. Many of my friends here have also. I have spent the last decade in China, and let me tell you, you don't want these people making frames or components for you out of a material that can just fail. Take a trip to a factory here sometime, and that will get you off the carbon.

flippin' racist idiots. you don't want these people living near you...

 

[rgmerk]

I live for the day when Chinese carbon is no longer needed or desired. I have gone back to Ti. A much better ride. Many of my friends here have also. I have spent the last decade in China, and let me tell you, you don't want these people making frames or components for you out of a material that can just fail. Take a trip to a factory here sometime, and that will get you off the carbon.

Hmmm. So where is the epidemic of no-name open mould frames cracking?

Even sites like bustedcarbon, all the photos seem to be of name-brand bikes.

 

[racer1192]

Racist? No. A realist? Yes. I am not sure what you think about factories that pump out frames, but they are manned by people who should not be making them. I do business with them all of the time.

I guess I have to call my, Chinese, wife racist also since she agrees with me. I love the fact that Western countries just say any criticism is racism. When you live here it is just criticism.

 

[fatsprintking]

I have a Tcr composite and an aluminum OCR.I much prefer the Tcr not just in comfort but handling.Although having ridden both bikes around my after work training ride hundreds of times, the stopwatch agrees with you that there is f*** all difference.

Are the wheels and contact points the same on each bike? I have had lots of differnet bikes of all types of frame material, and feel that often aluminum gets a bum rap as people have been told it is harsh and just go along with this.

I have an old colnago steel and a connondale caad4. To be honest with there is not that much difference when they both have the same wheels. Both ride pretty good with my handbuilt ambrosion excellence rims.

I would have thought that Giant is going to make a cut price carbon frame because they reckon this is something they can make money off - in some ways a smart move to provide an option at the price point where people are knocking something up from bits bought off ebay with a cheap unbranded carbon frame.

I am just going to stick with what I've got. By default I seem to have ended up with two classics, that I just happened to buy at the time when everyone said they were no longer any good so they cost nothing. It is funny however how many people come and have a look at the Cippo Cannondale when all the other bikes seem to look so much the same.

 

[KnockloftyNomad]

I live for the day when Chinese carbon is no longer needed or desired. I have gone back to Ti. A much better ride. Many of my friends here have also. I have spent the last decade in China, and let me tell you, you don't want these people making frames or components for you out of a material that can just fail. Take a trip to a factory here sometime, and that will get you off the carbon.

In my experience the perception of quality relating to “Made in China” can be very dependent on the industry you work in. In some cases highly engineered components made in China are among the best in the world, in other they are among the worst. Similarly the Made in USA tag goes on some high quality product but also on some complete garbage.

Rather than focus on the country of origin, focus on the actual product…

 

[rickshaw]

wow

http://cgi.ebay.com/Pro-700C-Carbon-Fiber-Racing-Frame-Road-Bicycle-NT10-/190547393933

Old news. carbon is cheap, decals are cheap. Even this guy is making money selling these.

Ya gotta love the features:
Corrosion resistant!
Heat resistant!
Stiffness (aluminum may bend easily"

bike tech in a nutshell

 

[DirtyWorks]

Industry prices are rising like mad in Asia, the next frontier for US bike Co's looking for cheap labor is Mexico. Been producing carbon fiber in Mexico City for a few years now, soon for bikes if not already.

Thanks for adding that. Are they nearing Taiwan's prices for similar quality/features?

I would have never thought Mexico could beat China's cost structure. Nice to hear.

 

[RDV4ROUBAIX]

Thanks for adding that. Are they nearing Taiwan's prices for similar quality/features?

I would have never thought Mexico could beat China's cost structure. Nice to hear.

Cost across the board, shipping and customs as well. Mexico doesn't have the expertise that Asia does with carbon, yet. So, it won't happen tomorrow, but it's coming, probably start at the low end then up. I also dumped my carbon rim supplier in Taiwan for US made ENVE. Asia totally jacked carbon prices up on everyone during this last fall/winter, not a little, a lot.

Let me rephrase that; Chaiwan totally jacked carbon prices up on everyone who's name isn't TREK/GIANT/SPECIALIZED/...etc. I'm a perfect example of a small company that the big ones don't like, therefore unless your MOQ is in the thousand(s) count, they don't wanna deal with you. The war of the big Corps on the small guy continues.

 

[dsut4392]

... I also dumped my carbon rim supplier in Taiwan for US made ENVE. Asia totally jacked carbon prices up on everyone during this last fall/winter, not a little, a lot...

Just wondering, is this "price jacking" independent of the plummeting value of your dollar? How much have your cost prices out of China/Taiwan changed in RMB/TWD?

Price/currency fluctuations like this may look bad to importers/resellers and consumers, but are a massive bonus to your local manufacturing industry, and will contribute significantly to the salvation of your economy (if that proves to be possible).

 

[krebs303]

Mexico is stepping in the aerospace market. A lot of hi-tech manufacturing is moving here. Such as your Lear Jet "Hecho en Mexico".

The New Learjet...Now Mexican Made
Low Labor Costs Attract Bombardier, Which Employs 1,600; Fuselages Where Cacti Once Stood

 

[RDV4ROUBAIX]

Just wondering, is this "price jacking" independent of the plummeting value of your dollar? How much have your cost prices out of China/Taiwan changed in RMB/TWD?

Price/currency fluctuations like this may look bad to importers/resellers and consumers, but are a massive bonus to your local manufacturing industry, and will contribute significantly to the salvation of your economy (if that proves to be possible).

30% in less than a year and raising the MOQ is the definition of price jacking, doesn't matter what the respective economies are doing, even in these harsh money times it doesn't justify 30%. Far more going on here than USD vs. RMB/TWD

I'm doing business closer to home, the neighboring state in fact. ENVE was my "salvation" if you want to call it that, may cost a bit more, but ultimately they produce a higher quality product, and their workers and people that live around the factory aren't dying of black lung from carbon dust. Was an easy choice.

 

[Notso Swift]

Now, there is no way I wouldn't choose the ENVE stuff for a small price premium if I was you, you would get it back 10 fold for the premuim to the end user, if nothing else

But the main reason your prices have gone up by so much (as alluded to above) is that a lot of Chinese manufacturing has uncuoupled its pricing from the USD
My next door neighbour owns a Glass factroy in China that supplies structual stuff for sky scrapers, most of thier product goes within Asia, previously everything was priced in USD for construction, now, they pick and choose based on the needs of the user. Basically before they were removing the FX variation by using USD, now they spend time on their own treasury.

We in AU have had a 22% swing in the last 12 months against the USD, Euro about 10%, Yen 15%... even Canada is up 10%, so there is the majority of your swing. As for the big boys, chances are they have longer term contract at fixed prices, do if the dollar goes south, they make it up from guys who don't have guareenteed prices (and sales volumes)