I recently wrote about Giant’s new TCR Comp 1 offering. Since the post generated considerable interest from far and wide, here is a followup.
Firstly, in relation to the release of the Comp 1, one of the first reactions from Giant branch stores has been one of a degree of discontent. As Giant dealers they carry a significant inventory of a range of models. As soon as the news got out, consumers were hot on the trail of what, to many, looked like a bargain.
The dealers I talked to are worried that they would find it hard to move existing inventories in a market where consumers are still very discriminating in relation to potential purchases. They feel it could be a short to medium term headache if this is extended beyond a limited edition. On balance, you’d have to put your money on a continuance.
Another reaction has been from a number of the smaller players. They have matched Giant’s challenge. Small, flexible, companies can still produce quality that consumers appreciate whilst reducing their costs. The flexibility is the payoff to the disadvantage of lack of purchasing power they have compared to the big players, and the consequent squeeze on margins they are experiencing.
You can reduce your costs whilst maintaining quality, but you cannot really avoid shaving the margins. Still, by taking this course you can, potentially, boost turnover and at least aim to reduce the impact on, or even defend, existing levels of profitability. If the thinking was to drive these smaller players to the brink, then this may not be working.
Comp 2 Compared
The July (Vol 22) 2010 edition of TMBK magazine lines up Giant’s TCR Comp 2 and Merida’s Scultura 105 and two other lesser known brands. To recap, TCR Comp 2 comes with a SRAM Apex Groupset with a retail price of $NT 42,800 (US$ 1,327 at today’s exchange rate).
Scultura 105, comes, funnily enough, with the new Shimano 105 groupset, at $NT 39,800, same as TCR Comp 1, which is all quite interesting, since S 105 is more expensive–some fascinating deals being done at the highest levels between suppliers here, one could speculate.
Anyhow, the bikes in question were tested by seasoned riders who all personally own mid to high, high-end bikes. This has clearly shaped their overall opinions which were basically that the test bikes were not machines that they would buy themselves. The bikes they tested performed adequately, and whilst fundamentally sound, are still fairly basic.
The message is that these are all reasonable entry-level carbon alternatives for first-time high end buyers. Rather than go for the high quality butted alloy as their mode of entry, these cyclists can go straight onto a carbon frame–a basic frame, nonetheless.
Another message that we must take away from all this is that the variables in play here are complex. How it will all turn out may surprise us all. Needless to say, I will endeavor to keep you posted on the twists and turns as they become clear(er) to me.
In relation to the smaller players, in my own case I have done a similar thing with a new butted alloy model I have just released, coincidently at the same time as this low-cost carbon market foray.
For the same price as the TCR Comp 1, it comes in around 800 gm lighter with a higher quality wheelset and components. The response has been good as the package offers competitive value. There are quite a few of these offerings around for the knowledgeable consumer, if you know where to look.
Oh, and on a completely different track, if you like fixies, check out this: AW.