Orbea Announces Price Increases Due to Supply Chain Issues
Orbea has announced a second round of price increases in response to the effects of the COVID-19 pandemic.
The Spanish brand announced an initial run of price increases on February 15 last year and it has now followed it up with another price update today. As with most brands currently involved in the production of bikes and components, Orbea is battling against rising raw material prices, rising shipping costs and a stretched supply chain that makes it harder to do business efficiently.
What does this mean for Orbea's customers? We picked out the following examples from bikes released last year: the Rise Hydro H10 has risen from $7,299 at launch to $7,999, the Occam LT M10 from $6,299 to $6,899 and the lower-spec Occam LT H20 from $3,659 to $3,999. The rest of the price increases outside of these examples can be viewed on Orbea's website.
The full reasoning for the price increases are below:
Press Release: Orbea
Since the onset of the pandemic the global economy has suffered continual impacts which have hit all sectors, including the bike industry. For the sake of transparency, we want to explain the reasons that underlie our decision to increase our prices, and the measures set in place to soften the impact of these increases.
-The prices of raw materials such as aluminum, steel, and carbon have been rising continuously for months, as have fuel prices.
-Transport costs have also risen disproportionately due to a shortage of containers, ships, and to congestion at ports.
-The bike industry, like many others, is suffering from intermittent or ongoing failures in the supply of components. This forces us to modify our specifications or seek similar alternatives, always striving to maintain quality.
At Orbea we have held out as long as possible before applying this update, but in the end we have been forced to raise our prices for this year.
“We are a company that is committed to our community of users and our stores. We are continuously monitoring market trends and have done everything that we could to avoid this price update, but there is no sign of the upward trend in costs being corrected" states Gonzalo García de Salazar, the company's Global Sales Manager.
Seeking to minimize the impact for dealers and users alike, at Orbea we have made a further effort to maintain our prices on those bikes already reserved by users and confirmed by their dealer in the Orbea system.
"This has been a difficult decision for Orbea, because it will have consequences for our stores and for the cycling community, who have trusted and continue to trust in our brand. We understand what this means"
The new prices will be available at orbea.com today.
We doubt that Orbea will be the only brand increasing their prices this year as the entire industry faces the same challenges. We'll update you with more announcements from any brands that make them.
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thank goodness it’s so easy to grow!!!
If you don't follow Ray Dalio, here's an easy to follow introduction:
www.youtube.com/watch?v=TISMidxdZoc
9.5% price increase on these bikes is quite significant. Higher than the stated rate of inflation, although the true rate of inflation is likely closer to 15%.
In 3 years, what you could buy 2 years ago with 5k, will cost 10k..because they can.. because we keep buying them regardless of the cost.. because we're really that dumb.
You’re destroying the world, f*ck our “nation” of corrupt Christian capitalists.
"Due to logistical challenges in managing the decreasing costs of supply chain and resource management, we are left with no other option than to raise our prices. As we continue to strive for the optimal customer experience, we have invested a great deal in our efforts to maintain normal operation. While our newly increased prices reflect this investment, we are confident that our brand loyal buyers and professional reviewers, er... riders rather, will continue to be enriched by our offerings."
Central banks and the multinational corporations that receive freshly printed money: laughing
Yes, more people have started cycling, but imagine that Orbea would have only been able to sell half the amount of bikes they sold before Covid (just a random number to prove my point), purely because problems in the supply chain, then they still would not have been enough money to pay their employees and other bills.
At least in Europe, Orbeas were always priced quite competitively.
Deore does the exact same thing for cheaper than XT. The only XT part worth buying is the cassette, for slightly lower unsprung weight.
I will have to disagree on the XT argument too. Mostly the spring is noticeably stronger in XT rear derailleurs, resulting in more precise shifting in very muddy conditions. I also love how XT shifters allow you to shift several gears in 1 push of the lever, in any direction you want. But that doesn't mean Deore isn't good or realiable, because there honestly is nothing wrong with Deore.
"Usually worse" is a vast hyperbole. 9/10 the better component is just that....better. Once again, Deore is great, but XT performs better and is lighter, will last longer. Is AXS crazy $$$? Yes, but it shifts ridiculously good regardless of conditions. Do some dials/settings confuse amateurs on suspension? For sure, but why should you be upset if they chose to purchase them and possibly improve their knowledge?
If it isn't 'envy' causing your viewpoint, it sounds even more like "I know better than that guy..." smugness. Not a good look so to speak. You don't see the value in anything other than Deore/NX? Right on, but don't limit others just because you don't choose to go for the higher end
AXS is good if you remember to charge it and don't have to buy it with your own money.
The cassettes on highend stuff are generally worth the money if its the second-highest end part from the manufacturer (eg buying XT rather than XTR).
Do you think anyone can tell the difference between a SRAM XX1 crank and an NX crank (other than the NX crank being much more durable)?
How am I limiting anyone?
In addition, your statement: "I do know better than the vast majority of people.." pretty much is 'smug' by definition. I worked in the industry both retail AND behind the scenes for over a decade, but you don't see me telling folks what to do with their money. Your example on cranks above perfectly is another example of smugness: "Do you think anyone can tell the difference between a SRAM XX1 crank and an NX cranks....". Who cares? . If Freddy Fantastic weekend warrior wants to drop $10k at the lock shop or at Jenson/mailorder....excellent! That is feeding the industry. MUCH rather someone spend crazy $$ on bike stuff that say yet another sport. Let the money stay 'here'.
Because it's a waste of money. Ultimately the same reason I don't want people to be obese, or smoke.
> If those are your posts (under a different profile)
What are you talking about?
> "I do know better than the vast majority of people.." pretty much is 'smug' by definition.
You and I have very different definitions of the word smug, lol. If Greg Minaar told you he's one of the fastest downhillers in the world, would you call him smug too?
>I worked in the industry both retail AND behind the scenes for over a decade, but you don't see me telling folks what to do with their money
If you can help people save money, you should. The fact that you seemingly choose not to is a moral failure on your part.
>"Do you think anyone can tell the difference between a SRAM XX1 crank and an NX cranks....". Who cares?
People who actually work hard for their money care. Your comment is so out of touch that I'm tempted to believe you're just an unfunny troll.
>MUCH rather someone spend crazy $$ on bike stuff that say yet another sport. Let the money stay 'here'.
Why?
>Now they can cheap out on heavy over resined carbon frames, that won't break under fat people, that are significantly cheaper to make.
Good? I don't think society should make any accommodations for the obese, but more durability is always welcome as far as I'm concerned.
I just think carbon is a really bad material for mountain bikes generally.
WOOO let's go!
BUT... my money is worth ~15% LESS than it did in 2019. aww man...
We're selling this summer and commencing operation GTFO.
Biden has never run anything successfully. In general, leftist policy always fails where ever and whenever tried- and no we are seeing the results of the de- growth movement.
Did you see his 1st presser in 75 or so days? Even cnn has turned on him.
Did you seriously want me to spell out the differences governing philosophies here in this little comment section.
They reading some Thomas Sowell; Hayek; ...basic base readings.
70% of Americans currently live paycheck to paycheck and 40 million (more than the entire population of California) live below the poverty line.
How we discuss government in America is dogmatic and dangerous. I want an effective one that protects its citizens and promotes a healthy standard of living. The size and scope of our government should be build around results, not theory.
Many good proposals in mark levin's book 'liberty amendments'.
(Balanced budget/term limits...)
But, we've got 2 generations now that have gone through the American scrawl system. So im afraid it's too late.
We are seeing this now with culture and with big tech censorship; big Corp bowing down to China for ex.
Liberty is no longer taught.
I read the summary and some positive/negative reviews of Levin's "Liberty Amendments". It sounds like the standard GOP neoliberal pro-market philosophy dressed up as "the government is taking away your freedom". The thing I don't understand is that you and I both agree that there are problems with the US, but you want to lean further into the very neoliberal philosophy that has created the current situation.
I am not a socialist or liberal but I don't think any liberal/socialist wants to live under tyranny or an oppressive state. If anyone tells you that, stop listening to them. Even Adam Smith acknowledged the importance of a strong government in protecting its citizens but everyone just cherry-picks the "invisible hand" paragraph without explaining the greater context.
You're advocating I read Hayek who is a founding father of neoliberalism and Levin's policy suggestions fall in line with neoliberal philosophy as well: reduced gov spending and power/deregulation.
Either way it seems reasonably transparent. Also, they're having to do all sorts of stuff to get bikes to customers as are many companies, e.g. GG. I doubt they're getting the same margin on parts when they're ringing around all the suppliers to find brake rotors, cranks, wheels, etc, just to get bikes out the door.
For Many of the goods we need the entire market is controlled by a handful of huge companies. Maybe even less for some industries/products. Without actual completion then they can essentially charge whatever they want.
Also they're quite a different business structure to most bike companies. They're an interesting organisation.
They would explain what "printed" actually means, what the Fed buyback program is, the relationship between the Fed and the Treasury, how quantitative easing works, when we (or other countries have used it), what effects did it actually have on inflation, etc. These publications would not simply say "We are dealing with text book inflation" because we are not.
Quantitative easing's effectiveness is a matter of constant debate and there are plenty examples of it causing hyperinflation in various countries. Guess who benefits the most from it? Big banks, the corporate elite, and those of us holding assets. Who suffers the most from it? The working class. It is just prolonging the inevitable outcome right now. Quantitative easing has the potential to be inflationary because the created money can lead to a rise in the money supply which causes inflation. Money supply aside, the other widely used definition of inflation is the rate at which the value of a currency is falling and, consequently, the general level of prices for goods and services is rising. Simply put, it takes more dollars right now to buy things that in the past took required less dollars. So tell me how what we are seeing is not inflation again? Are you going to try to tell me trickle down economics is effective as well? lol.
You forgot the importance of the relationship big banks have with the Fed and Treasury. They have track record of funneling treasury dollars into bonuses for CEO's whenever they decide quantitative easing is needed. It is the banks who determine what price they will sell and buy bonds back from the Fed, because they are all in bed together... We literally had an ex Goldman Sachs CEO running the Treasury when they were implementing quantitative easing in 2008 and guess who received insane bonuses during those years? ... Do you think they care about the people and fiscal responsibility? lol. They will continue to do just barely enough to keep us civil so they can continue milking us for cash.
In regards to the bike industry, most companies waited until the last possible moment to raise prices despite this increase in shipping and cost of goods. Many companies were holding out on price increases because the FED stated this inflation would be transitory and supply chain issues would be resolved. Guess what they keep pushing the "end date" back because they really don't know how this is going to play out. Shipping costs are a huge factor right now. Most economists are great a getting things wrong. Very few make accurate predictions. Is there some price gouging going on? Definitely. Is it super prevalent in the bike industry? Definitely not.
Most of us small bike shops (I've been in the industry 18 years) have been waiting 6mo to a year for items that are now trickling in. ETA's have been totally unpredictable. We had limits imposed on how much we can buy and have to be on it to get basic items we took for granted. Supply is still a major issue and so much of it stems from shipping right now. Container prices are through the roof. Demand is higher than ever because of this. The main mtb brand we sell has limited us to ONE OF EACH MODEL THIS YEAR, not even a size run of each model... So of course prices are inflating. The US is still a free market after all (76.8% economically free as of 2019). These inflated prices are not stopping the masses from buying up stock.
It seems you do get it so that’s cool and I apologize for the meme comment. That 40% one has been floating around a lot recently and it annoys me when people who don’t really understand things pass stuff like that along.
images.app.goo.gl/mw7NkQvjivSwFYBN9
Wheels.
If anyone thinks they are just raising prices because, then you have no idea of what is going on in the real world. And YES, they likely won't go back to historical levels for a while- if ever. We are reviewing every single PO we get from customers just to keep up with metal price fluctuations. For 1st quarter of 2022 we are told Aluminum will be up another 15% and stainless 19%. Shit flows in one direction.......
Still, I like to bikes
I think once most people try 28c or even 30/32c, they never go back. Large volume tires with wide rims on road bikes isn't a fad and is one of the few upgrades instantly tangible to the rider.
In a few years an old road frame with limited tire clearance will be looked at the way MTBers look at an old 26" frame... something they wouldn't touch.
I do love riding though so I won't get completely out of it, but I think I'll end up with a cheaper aluminum hardtail in the future that I can still have fun on while I'll complain about prices. Second hand dirt jumpers, trials, bmx bikes are cheap too and loads of fun.
ride in worn out trail running shoes. buy a $50 helmet. thousands of people don't run inserts. there are many cost effective pedals on the market. buy that $2500 bike that runs the same geometry and suspension as more expensive models without all the fancy components. those $2500 bikes are far more capable than the highest end $4000 bikes from 10 years ago.
The industry WANTS to shift away from Asia for manufacturing but can't turn that drip off so here's what's happening:
Raise prices far more than they NEED to on current product to drag the profitability of selling bikes forward. Then, as things normalize, 2 things happen. Prices hang around (duh) and this gives brands the flexibility to do more regional manufacturing/assembly. Also, new products are introduced that are more price competitive by way of being slightly different. (more alloy bikes, simplified designs, etc.)
Alternatively: brands do what they do and are just grabbing money until it's all dried up, at which point they still won't lower prices, it just turns into a discount war blood bath.
I would say: a couple of companies must come together and set up a common facility and it may happen in one of slightly lower income countries, Poland comes to mind in EU, Mexico in Americas. But I think big players are not stupid, they know Taiwan and China won't be "cheap" forever. They probably already aren't but they have the facilities and production know how setup.
Easton had (has?) a facility in Mexico a decade ago where they built carbon wheels; not sure if that still exists as the brand changed hands. The issue is Mexican labor is still more than the Far East, and raw materials still have to come from Asia. It's not any cheaper, although in hindsight it's a great remedy to circumvent the modern era supply chain crisis.
I have just been to a meeting where they announced who will produce prefabricated wooden structure and gave us contact details to people with whom we weill coordinate the design with. So... Austrians will produce structural elements from Swedish timber o send it back to Sweden to be built there. Aaaaaand they have a better environmental certificate than Swedish companies doing the same. Who hasn't heard stories like this?
I won't be surprised though if Austrians are cheaper because they do it better. Never rule out complacency in high welfare societies...
Giant remixed has raised prices because supply chain issues would negatively impact our profits. Not eliminate them, no, they’d just be a bit smaller than last year and we can’t have that. We (the executive team) really want to pay our executives more and unless we raise prices, we can’t do that. We are still dedicated to delivering to you the best product we can while maintaining an ever growing profit margin, so we have raised prices.
Blame your politicians and poor people for the rising prices, because it is their fault, demanding livable wages and health insurance.
I did lots of price comparison for my Xc bike, I ended up with orbea oiz tr for $5.8k. Had 1740g frame (lightest in the world), shimano xtr, fox factory 34/dps, dropper, race face next SL crank, carbon handlebars. That was comparable to any bike over $8k. The frame alone is comparable to any highest end hi-mod cannondale, trek, specialized that are only offered $9k bike. So the fact orbea offered the frame in a more attainable
Why is the media not on this?
And here's what ca looks like these days.
Homeless pop is crazy bad(just like Oregon/Nevada)
redstate.com/sister-toldjah/2022/01/21/gavin-newsom-sticks-foot-in-mouth-sideways-during-l-a-railroad-theft-site-photo-op-n510486
And
"Sorry, we can't deliver bikes, we can't compete in this market even though you paid us more. Tough shit."
"OuTdAtEd gEoMeTrY"