Are MX bikes too expensive?

[Ben_Dere_Didat]

A recent thread about dirt bike pricing, got me thinking; are MX bikes prices rising faster than the rate of inflation? As the son of an economics professor (who first got me into dirt biking) and a past MX'er about to return to the fold I decided to do a little research. The last MX bike I bought new was a 1977 RM 250. I paid $1,600 OTD, which was top dollar (I bought the first one the dealer received). $1,600 1977 dollars, according to the Treasury department's numbers, is worth $4,787.39 in 2001 dollars (2002 numbers have not yet been published). A new RM250 will most likely run you around $5800 OTD (assuming a similar near top dollar price), which, when compared to the deal on my 1977, is about 18% more than the rate of inflation.

So it would seem that the price of dirt bikes is climbing at a rate greater than the rate of inflation. We should consider, however, that the technology in today’s bikes is more sophisticated-- the bikes we can buy today are much closer to what the top pros are racing than those offered in 1977—so maybe a twenty percent increase is justified?

No conclusions here, just food for thought.

[Hick]

I dunno. I always suspected that, if all the R&D money is allocated directly to the MX models, they actually lose money on those bikes.

Sure, an XR 400, for example, is much cheaper, but they haven't done any R&D on that model in years. The only cost is production, marketing etc. But the MX models receive updates nearly every model year.

I think they justify the expenditure by:

a) allocating some of this R&D money to the entire line since a lot of it trickles down there anyway.

? counting some of the expenses as part of their marketing effort, since they figure if people see a YZ on race day they will run out and buy that TTR...

Of course, I could be completely wrong about all that...

[Hick]

But in what other motor sport can you buy a near replica (for all intents and purposes, anyway) of what you see the pros riding on ESPN?

I mean, I'd love to race a trophy truck, but I don't have a half million dollars...

[Yak]

Yep, each year they jack up the price a few hundred, its getting out of hand. When you think about it, Whether you are a millionaire or make minimum wage you still ride the same bike. Not a big purchase for some, for others it a biggie. Its simple, they will always charge what the market will allow. Im rather disgusted at what $6200 represents in the MX bike world. I remember when $3k would get you OTD. My first bike, a 1990 KTM 80 was $850 used, one year old.

[beezer]

These bikes change every 2 to 3 years, all that technology cost money.

I bet the new YZ450 is going to cost Yamaha plenty.

We want the latest technology but don't want to pay for it.

I drag raced for a few years and had motors that cost 15 to 20 thousand and could be obsolete before the ink was dry on my check paying for them.

Bikes in the grand scheme of things are not to bad.

[John_Lorenz]

I personally think and it’s my observation that people are Sheeple.

They will pay any price for whatever reason, without question without fuss, without giving it a second thought for what they want.

So on a physiological standpoint, it’s like the child that wants the lollipop, he / she will go to any extent to get what he / she desires.

Hell why do you think companies will spend millions on marketing research as opposed to R&D.

Consumer demand drives market price. Look at cars, say the Chevy Tahoe SUV, Do you think the price will drop becouse Chevy has made all the money back and initial investment on building and marketing the vehicle. On the contrary, they jack the price up to make more money to put into marketing schemes and gimmicks.

So the economic outcome of this is irrelevant, it’s the Sheeple effect ?

Plus I have to add, out side of some minor cosmetic design changes, a bore and stroke does not constitute R&D such as the case of the 450. Yes its improved, but it is improved only on the backs of you and I, I mean we made the changes we gripped to Yamaha, the have focus groups, they listen, they see what were changing to make the bike handle, feel and ride better. They have guys like Dubach that tell them what we want and desire. Technology has not changed that much at all in the engine department or suspension, only material, so the cost increase is to add carbon fiber, titanium and so on. Not what you would expect......

Just bore your 426 out to the 44its only 2 over stoke bore, so yamah refited its maching to compact the engine of the 450, they already had the tooling from the 250....

Thats my $4.26 worth

[ August 05, 2002: Message edited by: E.G.O.**** ]

[moto2000]

Would you pay $4700 for a new 77 RM 250 or $5800 for a 02 RM 250? Hard to compare prices when its a totally different product.

[Shawn_Mc]

Think about what your getting for 6300 bucks. If you wanna take into consideration that the bikes available from the factory now are BETTER than the works factory bikes of say the mid 90's, that cost anywhere from 20-40 THOUSAND DOLLARS, Id say bikes where getting cheaper, not more expensive. If you adjust your 77'RM250 price for a factory bike, say $25000 into todays dollars, then throw that bike up against a $6300 brand new RM, which bike do you think is a better bike? I can tell ya right now, the Works bike isnt as good as a is stocker now.

My 82 CR250 cost me 1851.39 out the door. And it was an EVIL, headshakin, vibratin, powerband like a firecraker monster. What it did well was wear you out. Ya know why it was only 1850 bucks, all of the above. And it wasnt unique, all of the bikes were just as bad. Bikes arent bad anymore. You can take the worst bike of a shoot out, drop it into a time machine for say 10 years, it would come out an ultra trick, smooth as silk, full skunk works factory unit.

Ya bikes cost more than they used to. But if you can ride it, you could quailify for a national on it, right off the show room floor. You couldnt do that 20 years ago.

[gettin2old4this]

"My 82 CR250 cost me 1851.39 out the door. And it was an EVIL, headshakin, vibratin, powerband like a firecraker monster. What it did well was wear you out. Ya know why it was only 1850 bucks, all of the above. And it wasnt unique, all of the bikes were just as bad. Bikes arent bad anymore."

Yznvegas: Well, if you think back to 1982 when you bought that cr250 it was the hottest thing on the market and probably had all your friends good and jealous. My point is that in 20 years the bikes we are riding now will seem just as archaic and silly as that 82' cr you used to ride.

I think moto-x bikes are WAY overpriced and I think it has to do with the huge $$ some of the factory riders are making. Carmichael is awesome but do you think he is worth $2 million a year just to ride a Honda. That's not counting purses and endorsements.

I think a fair price for a 426 would be about $4,000.

[John_Lorenz]

Vegas

Your in marketing Right ?

You said do you think RC is worth it. It dont matter what we think but the marekting and sales at Honda, they think so and so they pay the kid.

Is he worth it, Every freaking dime as far as I am concerned, if he can get the moola and perform the way they want WIN WIN WIN WIN WIN WIN

Then more power too him

Again the Sheeple effect, he wins very snot nosed wannaB is there on Monday with his paper route moola to by a new cr

Shawn you nailed it right on the head.....

I would say further that that is about the only thing banned Works bikes did, pass it to the consumer....

[ August 05, 2002: Message edited by: E.G.O.**** ]

[CJ_Baran]

It is all perspective...

My road bike(bicycle...have to specify since this is a motorcycle forum) would have cost me close to $5K if I did not have sponsorship discounts. And that is just a bicycle with only 20lbs of stuff.

My bike helmet costs $160 retail, bike shoes $300. I spent $400 this year on my team uniform. Shorts, jerseys and vest. $50-$100 dollars for a new tire. My racing wheels were $1,300 retail.

When I bought my 426 and all new gear I felt like I was getting a great deal...Boots for $300 versus a little pair of shoes for $300 or an actual helmet with substance to it versus the 3oz piece of painted styro foam. Pants for $120 versus a little pair of shorts with a pad in them for the same amount.

Look at skiing...$52 a day for a day ticket. It is about $8 to $10 bucks to ride an MX track.

Yes, motorcycle are expensive...yes they could be cheaper...is Yamaha ripping us off...not more than car mfgs, boat mfgs, ski mfgs, shoe mfgs, clothing mfgs or any company that needs to stay profitable...and Yes they are worth every penny for the amount of fun you have. ?

BAAAAAHHHHH!

[beachthumper]

It's simple. Supply and demand. You wont see three new yz450f's on any dealer's showroom floor. If you want one you'll have to wait in line. If your lucky you'll get one.

Great pricing strategy by Yamaha.

However, keep in mind this helps prop up your resale value. Your true cost of ownership is the difference between what you paid gettin in less what you sell it for on the way out.

[Shawn_Mc]

Personally your getting more bike for 6300 now than you did in the mid to late 80's for 1850. Plain and simple. And the amount more is staggering.

The idea that a fair price for a YZ426 at $4000 made me laugh. Ya that is a fair price. And you could get one, but it would have a 35mm fork with 8 inches of travel, be two valve, steel fenders and come from the repulic of China.

If you think your getting jacked @ $6300, your lookin the gift horse in the mouth. Anybody remember what it was like trying to get the 97' 400? Can you say 7700 bucks? Some over paid hack up the street from me bought one. Moron. He still has it. Its worth what 3100 now? Paying full retail on a brand new bike is (not a new model, a new bike IE 450F verses 426) par for the course.

YZnvegas, I think your over looking the R&D thats involved. I bet Yamaha will produce this bike for the full year before the re-tooling is paid off.

The dealer cost on the 426 was 4800. The fact that the retail price on the 450 didnt go to 6750 or more surprized me. The reason Husaberg isnt a household name isnt because the bike is bad, its because its too expensive.

Bottom line, they dont make'm for us, they make'm for profit.

[gettin2old4this]

" Look at skiing...$52 a day for a day ticket. It is about $8 to $10 bucks to ride an MX track."

A pair of Skis don't cost $6000.

[Guest blatham489]

Don't know if this makes the case better or worse, but did the economic acorn consider the effect that currency translation had on his wishful analysis,? ?

If the dollar is currently weaker now than it was then vs the yen, that easily make up the difference. You may even find that bikes are CHEAPER now than then (at least in Japan!)

Slice it how ever you want, it's still supply and demand (as has been said repeatedly)

[Hick]

Good Lord, first the CPI, now some nice exchange rate analysis for TTalk denizens...

The Yen is about twice as expensive now as it was in 1980, with most of that change happening between 85 and 88.

So, in dollars, an '02 would be twice as expensive as an 80 model if the Yen price were the same...

I think this will be my 692nd post, so it took 691 to get to this point...

[Ben_Dere_Didat]

Acutally, a company as global as Yamaha isn't as affected by currency exchanges these days. Currency exchanges are never felt one to one in terms of retail pricing for the same reason you closed your message with--supply and demand. In the late seventies, the yen was around a hundred per US dollar. Today it's around 120. In the eighties, it soared to as high as 65 yen to the dollar, and in the nineties to as low as 160 to the dollar, but the prices of Japanese products didn't double, because they can't--we wouldn't pay it.

Sorry if this thread I started is beginning to sound like an econ class, but it's helping me to feel a lot better about the fifty-five hundred I'm about to shell out for a YZ426...

[Hick]

Originally posted by Ben Dere Didat:

In the late seventies, the yen was around a hundred per US dollar. Today it's around 120. In the eighties, it soared to as high as 65 yen to the dollar, and in the nineties to as low as 160 to the dollar...

STOP THAT!!

Actually, the numbers I have show...

(Yen to buy a dollar)

From 75 to 80 it only went below 200 once, in late 78, down to around 190.

In the 80s in never got below 100.

The lowest in the 90s I see (monthly averages) is 87 in 07/95.

Maybe I got bad info (Click Here).

But I agree that exchange rates can’t really be said to effect retail pricing for a global company/product, there are many ways to hedge this (if I could remember my b-school education I’d tell ya what they are) and too many other factors come into play.

But in the shorter term I do think that exchange rates affect prices in general. Isn’t that why all those guys on the Honda side are buying $5,800 CRFs from dealers in Canada??

[Hick]

Originally posted by Hick:

But in the shorter term I do think that exchange rates affect prices in general. Isn’t that why all those guys on the Honda side are buying $5,800 CRFs from dealers in Canada??

OTOH that is a case where the purchase is made in a different currency than the price...

Somebody stop me before I dust off my Finance books. Or something.

[Mark_Cantrell]

EGO,

In the late 70's Mercedes got several studies back that it could increase the value perception of its cars by charging more for them. Most sold in this country were at that time made in Venezuela. The doubled the price of the new models against very modest increases in cost or performance. The result, coupled with really ****ty cars in the US (remember the late 70's cars?) was that the perception of their value went up dramatically just because the consumer price went up. It wasn't just the snob factor, people who had been snobbish with Lincolns and De Villes changed to Mercedes because they now cost more than the Caddy, ergo, they must be better cars.

Is this an example of sheeple'ism?

mwc