2021 Taiwan Manufacturing and Price increases
01-17-21, 06:42 PM
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Mr. Dopolina
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2021 Taiwan Manufacturing and Price increases
Just thought I'd throw this out there.
The first thing to note is the likelihood that there will be pricing increases across the board on goods made in Taiwan. This is due to the incredibly strong Taiwan Dollar.
When I first moved to Taiwan in 1998 the exchange rate between TWD and USD was between 33¬35 to 1, which means it took 35 TWD to buy 1 USD. Many businesses calculated their pricing (profits) based on this exchange rate.
Currently, it is around 28:1. This is great for Taiwanese buying imported goods but it is creating havoc in an exporting industry that runs on such tight margins. This is running through the entire supply chain. This should translate into higher retail prices.
The next issue is manufacturing capacity and lead times.
During 2020 policy changes in China created a situation where it made more economic sense for Taiwan manufacturers that had moved from Taiwan to China to move back. Suddenly there was a wave of movement and tens of thousands of manufacturing jobs moved back to Taiwan (across all industries). This created a materials shortage (esp alloys). Coupled with a surge in orders this created a situation where factories are running at capacity AND fighting for the materials they need.
As an example, we are still waiting on products that typically had a 30 day lead time (the time between order and delivery) to be delivered after 120 days!
This situation is not going away in the short term.
Keep this in mind as you shop either online or at your LBS.
The first thing to note is the likelihood that there will be pricing increases across the board on goods made in Taiwan. This is due to the incredibly strong Taiwan Dollar.
When I first moved to Taiwan in 1998 the exchange rate between TWD and USD was between 33¬35 to 1, which means it took 35 TWD to buy 1 USD. Many businesses calculated their pricing (profits) based on this exchange rate.
Currently, it is around 28:1. This is great for Taiwanese buying imported goods but it is creating havoc in an exporting industry that runs on such tight margins. This is running through the entire supply chain. This should translate into higher retail prices.
The next issue is manufacturing capacity and lead times.
During 2020 policy changes in China created a situation where it made more economic sense for Taiwan manufacturers that had moved from Taiwan to China to move back. Suddenly there was a wave of movement and tens of thousands of manufacturing jobs moved back to Taiwan (across all industries). This created a materials shortage (esp alloys). Coupled with a surge in orders this created a situation where factories are running at capacity AND fighting for the materials they need.
As an example, we are still waiting on products that typically had a 30 day lead time (the time between order and delivery) to be delivered after 120 days!
This situation is not going away in the short term.
Keep this in mind as you shop either online or at your LBS.
Last edited by Bob Dopolina; 01-17-21 at 07:21 PM.
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01-18-21, 02:51 AM
#2
Hear myself getting fat
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Yes, all of the above.
”Several major bike brands have increased prices on their 2021 bikes, with Specialized citing difficulties and increased costs within its supply chain – while Giant say price rises on their TCR Advanced range are due to currency fluctuations, increased logistical costs, cornovavirus, and to bring their prices more in line with similar models on their other frame platforms”
Specialized, Giant, and Canyon increase prices
”Several major bike brands have increased prices on their 2021 bikes, with Specialized citing difficulties and increased costs within its supply chain – while Giant say price rises on their TCR Advanced range are due to currency fluctuations, increased logistical costs, cornovavirus, and to bring their prices more in line with similar models on their other frame platforms”
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