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2010 Models Answer Drop in Spending

Published June 25, 2009

SUN VALLEY, ID (BRAIN)—If new product shown at Press Camp this week is any indicator of what’s to come in 2010, the industry will add value-driven, and in some cases, lower priced product, to their line-ups in response to a down shift in consumer spending amid the U.S. recession.

For 2010, BMC Racing, whose sales haven fallen this year, will toss out model years and re-release the 2009 Pro Machine and Race Master bikes. The SLC01 Pro Machine frameset will be marked down from $3,899 to $2,999. The Race Master frameset will be priced at $1,999.

Without model years, dealers should be able maintain the value of their inventory, said Derrick Lewis, BMC brand manager. BMC was one of 20 industry manufacturers showcasing new product to 28 endemic and non-endemic media at Press Camp in Sun Valley, Idaho on Wednesday and Thursday.

Lewis acknowledged that the discount may cause some erosion of BMC’s high-end reputation, but was left little choice given softening at the high-end.

“We’re in tough times. BMC has been built up with a luxury brand image, but to keep things moving and increase sales we may have to chip away at that brand image,” Lewis said.

One advantage BMC may have over its other niche competitors is its alignment with QBP, the exclusive U.S. distributor of the Swiss brand.

With QBP, BMC dealers are asked to buy three display models on terms in October with the bill due the following July 31. When retailers sell a BMC, they order the custom bike through QBP’s Dream Cycle program and can begin selling off the demo models on July 1. That way they only risk the investment of three bikes, Lewis said.

BMC has also been able to trim costs with the addition of Ridley to QBP. Those two brands, along with Lazer helmets, will now fall under one management group. Each will have its own brand manager, but logistics and warranty will use shared resources.

“The idea going forward is to offer a [financial] benefit to dealers taking part in a little bit of each of these product lines,” Lewis said.

Blue Competition Cycles is rounding out its line with mid-priced carbon road and time trial bikes. Though Norcross, Georgia based Blue is up 20 percent year-to-date, the company realizes it needs to fill out its line to help spur future growth.

Last year, it introduced the RD 1 road bike with carbon frame, fork and steer tube in a 105 mix for $1,995.

“It’s been the best selling bike we’ve ever had,” said Chance Regina, product manager for Blue, which has been selling bikes for five years.

The problem was the next model up cost $4,400 so this year, Blue is expanding the RD line to add three more versions: A women’s specific frame spec’d with Rival for $2,600; a men’s Rival build for $2,600; and an Ultegra/Dura Ace mix for $3,400.

“We see a lot of dealers circling our brand, just waiting to see how we fill it in and I think this makes a big difference,” Regina said.

For 2010, Blue will also release a carbon time trial bike with internally routed cables, BB30 bottom bracket and 105 components for $2,500 to reach a broader audience. As part of the Blue Line Program, dealers are asked to preseason order 12 bikes and receive a 13th for free that can be sold to raise overall margin or kept as a demo or for personal use.

In the wheel market, DT Swiss is adding a 1,600-gram mid-range road wheel to its lineup to help penetrate the OEM market, where it has traditionally been weak on the road side. It retails for $750, making it ideal for OEs, said Kenny Roberts, sales and marketing manager for DT Swiss

“There are a lot of companies out there—Edge, Reynolds, FSA— but even though there are a lot of brands, there’s also room for strong brands with strong products,” Roberts said.

For pictures and details on other new product from Press Camp, click on the link to the BRAIN Blog.

—Nicole Formosa

Photo: Bikes set up in the demo area for Press Camp, held this week at the Sun Valley Lodge

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