Full Speed Ahead and its subsidiary VisionTech will be raising their wholesale 5% to 15% mainly due to rising costs of raw materials and the overheating Chinese economy. As previously reported in BOSS (BOSS_0413), shortages in steel and aluminum in China may cause the bicycle industry some supply problems. FSA is saying that in addition to these two raw materials, they have also seen price increases for carbon fiber. The company said that the prices for some of these commodities have doubled since the beginning of the year. FSA has also experienced increased expenses from rising fuel prices, and a decline in the value of the U.S. dollar.
The company has been experiencing a rapid increase in demand for many of its parts, which, for the most part has been driven by consumer demand. The sales spike has caused an increased reliance on air freight, further eroding margins.
“While many of our competitors raised prices much earlier in the year, we were crossing our fingers that things would get back to normal in a shorter period of time. Unfortunately, they havent so we are forced to pass along our added costs,” said Doug Stuart, FSAs President. He went on to say that FSA has yet to see any real benefits from the on-going Shimano shortage, but expects to see some in the not-too-distant future.
Carbon, aluminum and steel are not the only materials in short supply either, with several international publications are reporting increased rubber prices, so it looks like tires and tubes will be affected as well.
