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Message from discussion Typical decent Al Bicycle diamond frame costs $8 to make in Taiwan
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SMS  
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 More options 6 Dec 2005, 16:51
Newsgroups: rec.bicycles.tech
From: SMS <scharf.ste...@geemail.com>
Date: Tue, 06 Dec 2005 08:51:46 -0800
Local: Tues 6 Dec 2005 16:51
Subject: Re: Typical decent Al Bicycle diamond frame costs $8 to make in Taiwan
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Luke wrote:
> In article <43950ba2$0$38660$742ec...@news.sonic.net>, SMS
> <scharf.ste...@geemail.com> wrote:

>> Luke wrote:
>>> This from Sheldon Brown's Bentride Podcast (@ 8:50). No wonder
>>> manufacturing is a declining sector in North America! This can't be the
>>> total cost of production (stock and labor); does the figure apply to
>>> labor cost only?
>> It's quite possible that $8 is the cost of an aluminum frame. Aluminum
>> is extremely inexpensive (why do you think the bicycle manufacturers are
>> using it?!). Look how cosmetically poor the welds are--no effort is put
>> into filing them. Welding seven or eight pieces of aluminum tubing
>> together is not a long or expensive process.

> Still, to put it in perspective, the cost is only a couple of dollars
> more than the price of a typical fast food meal.

Yes, but the margin on a fast food meal is very high, the margin on a
bicycle frame is very low.

>> I think the real question is what is the ROI, including the cost of the
>> equipment and factory.

> Well, generally speaking, it's enough to flood the region (mainland
> China, specifically) with a torrent of FDI; and capital, supposedly,
> always seeks the highest rate of return. How long can it continue?

In some cases this is true, but in many cases companies are going to
China because they have dreams of selling to the Chinese population and
don't want to be shut out. Most of the automobile companies that built
in China are not profitable.

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