From: kiisaka@csi.uottawa.ca (Ken Iisaka (the mad pianist))
Subject: Re: Manufacturer Marketing Policies - 2 Big Questions
Organization: Dept. of Computer Science, University of Ottawa
Date: Thu, 3 Sep 92 05:50:07 GMT

In article <1992Sep2.232909.7285@ac.dal.ca> wulfie@ac.dal.ca writes:
>A GT rep visiting the shop where I work claims that Shimano is going to
>pull a real fast one with their different lines of componentry.  The gist
>of it was that they were going to wedge another line of cheapie stuff
>below the GS series and price them at GS series while bumping GS prices to
>Exage and Exage to Deore and so on...  Could someone please confirm, deny...
>correct this rumor.  (Preferably before I start raving and muttering :*(

The rumour about the price increase is true, but this rumour points the finger
at a wrong place.

The Canadian federal government recently passed a bill which imposes 60% duty 
on all imported bicycles and components as an anti-dumping measure.  Canadian
bicycle companies (Norco and Rocky Mountain are notable and honourable
exceptions) have been lobbying for protection against inexpensive high quality
imported bicycles.  You may have guessed that these companies are Canadian 
equivalent of Murray and Huffy in the south of the border.  They are: Raleigh
Canada (a completely different company from Raleigh USA which is owned by
Derby,) Procycles (Peogeot and Velosport,) and the company which makes Leader
(real junk) bicycles of which the name I have forgotten.

This situation is really too bad because it makes quality bicycles even more
unaffordable.  Canadians have always paid up to 50% more for their mount than
Americans because of higher taxes and distribution cost.  Now, with this
policy, more Canadians will be driven away from bicycles.

A friend of mine who runs a bicycle shop in Ottawa has been approached by
Raleigh Canada many times.  Raleigh Canada wanted him to carry Raleigh
bicycles, but restrictions were simply outrageous, he said.  Raleigh Canada
demanded that he orders 100 bicycles immediately.  For a small market as in
Canada, it is simply outrageous.  Only a few shops manage to sell 1000 bicycles
in this town of 800,000.  He also explained that the pricing of Raleigh models
were simply ridiculous.  Also, very few quality models were available.  Oh,
yes, by the way, he is the largest Schwinn dealer in eastern Ontario, and he
has sold more high quality bicycles than any other stores in town.

Schwinn has a different marketing approach in Canada.  Schwinn dealers in the
U.S., I have been told, that at least 50% of the bicycles they sell must be
Schwinn to maintain its Schwinn dealership status.  None of such restrictions
are imposed on Canadian Schwinn dealers since Schwinn entered the Canadian
market only 4 years ago.  With its quality products, Schwinn has gained a 
sizable chunk of Canadian market.  Though a Schwinn Crisscross costs nearly
$500 CDN ($420 US,) they are selling like hotcakes here.  Raleigh or other
companies should not expect to be able to sell their junk.  (Again, Canadian
Raleigh bikes are completely different from American Raleigh bikes, though some
Technium models seem to be available here.)

It's like when U.S. imposed a 100% tariff on imported silicon chips.  Only just
a few companies benefited from it, while many other companies went belly up.
Oh, yes, consumers really suffered, too.

How stupid, isn't it?

This will result in a huge increase of imported bicycle prices.  
-- 
Ken Iisaka  kiisaka@csi.uottawa.ca : Just got back from Aspen, Colorado.
Artificial Intelligence Laboratory : Please be gentle.  I have to get 
University of Ottawa, Ont., Canada : acclimatised to the low altitude here.
H: +1 613 237 6642     W: 564 8155 : I was a mountain goat there...
Newsgroups: rec.bicycles.marketplace