Price Hikes For Raw Material: Expensive Motorcycles?
Author: Mike Werner
Location: Normandy, France
Life is getting more and more expensive, and the motorcycle industry is not going to escape this trend. Raw materials have increasingly become more expensive, and the most basic material we use (mostly) on our beloved motorcycles, petrol, is going to go through the roof.
According to many sources, oil production will reach its peak by next year. Even the famed, or notorious WikiLeaks have published leaked cables to that tune. According to local diplomats, Saudi Arabia is going to reach peak oil production by next year (2012) (source).
What does this mean? Simple, there will be more demand for oil than can be produced, so you can do the math. Oil barrels will reach 200$ by next year, and what we'll be paying at the pump will triple.
So will the electric motorcycle save the day for us? Many do not see the electric motorcycle as viable, at least not yet. The figures quoted by the manufacturers show promise, but there are emotional barriers. A "normal" motorcycle can run for 1000's of miles, since when the fuel in your tank runs out, you just go to a gas station and fill up. Even the best electric motorcycles, with a theoretical range of 100 miles can't do that. Once the battery is empty, it'll take quite some time to recharge.
But at the pace battery technology is increasing, and become cheaper, hopefully by 2012/2013 they will offer a better range and cheaper price. Hopefully..
But that's not all that's becoming more expensive. For example, recently tire manufacturer Bridgestone has announced a price hike of 8% for motorcycle tires. Rubber has become very expensive due to bad weather in rubber producing nations (like Thailand), and an increase in demand from China. Other Japanese tire manufacturers Yokohama and Toyo have announced an increase of 7% in price. Michelin have also announced a price increase of 8% starting next month (source). And that's just for this year. Next year, they'll increase even further.
China is importing enormous quantities metals, and there is fewer and fewer iron available. Prices are soaring; December 2010 saw an already high price of US$200 per ton, analysts expect a ton to cost US$300 by year end (source). That means that manufacturers around the world will need to pay more for iron, aluminium, copper etc. And that means that your motorcycle will start costing more.
So not to be gloomy, your motorcycle is going to cost much more to purchase and to run. Electric motorcycles will become more and more attractive, but will still have to use expensive raw materials.