There are a lot of weighty political and constitutional matters on people’s minds right now, but one of the things we’re wondering about here at road.cc is what it’ll all mean to bike and cycling component prices.
Yes, you’re right, there are other important issues on the agenda at the moment, like exactly how and when the UK will leave. Who will be the next prime minister and when will they be elected? And will the vote trigger another Scottish independence referendum? Of course, these are massive questions… but we’re really interested in bikes too.
The most often quoted timescale for Britain’s leaving of the EU is two years, although no one can be certain. But the actual exit process is not the only issue at stake here. The pound has fallen to levels not seen for over 30 years in the wake of the exit vote, and share prices have also been hit by the uncertainty surrounding the economy.
Shares in Halfords, Britain’s biggest bike retailer, for example, were priced at over £4 at the close of trading on Thursday, 23 June. They reopened at £3.20 on Friday morning, following the Brexit result announcement, and they’ve not been above £3.50 since. London's FTSE 250 index (it tracks 250 mid-sized companies) lost 7.2% over the day.
These could be just short term results of the exit vote, who knows? Will there be much of an upshot for the bike consumer?
“[The Brexit vote] won’t have an immediate effect on the price of goods as the 2016 stocks are already bought and paid for,” said Clive Gosling, marketing manager at CSG, which looks after Cannondale, Charge and Sugoi, among other brands.
“We are, however, just about to price the 2017 bikes that we will launch to dealers early August. We will have to speculate what the cost of these will be, based on the devalued GB pound against the US dollar, as most bicycles, parts, accessories and clothing are bought in US dollars.
“We will have to consider where the currency looks like settling rather than looking at the knee-jerk Brexit level – which, of course, is speculation on our part.
“Short term, I think 2017 bikes will be marginally higher priced. Longer term, bikes can be sourced out of markets where there are current EU dumping levies so it could mean lower factory prices to offset the currency if it doesn’t recover, hence no net increases over current prices. It might even make prices lower down the line.
“It’s all a step into the unknown but we don’t think you will see the dramatic price increases that people are speculating.”
When road.cc visited 3T a couple of weeks ago we were given a price for the new Exploro based on the UK remaining within the EU. We were told that the price would need to be reviewed if the UK left, although 3T would honour any orders made before the announcement.
We’ve contacted a whole host of other bib bike/component brands to ask about the implications of the Brexit vote, but they all say that it’s too early to comment.
“Officially, it's still no comment,” said one. “Our internal UK message is to keep on keeping on.”
In truth, it looks like any changes to duty are a way off yet, and if pro-leave politicians like Boris Johnson are to be believed, the UK can spend the next couple of years negotiating trade deals to minimise the impact on prices.
What about EU Standards? We’re used to seeing them on stickers and packaging for all kinds of products, including bike helmets and lights, for instance. All bike helmets sold in the UK currently have to conform to EN1078 European standard.
This European Standard is overseen by the European Committee for Standardization which has 33 national members. As well as all of the current EU states, non-EU states Iceland, Norway, Switzerland, Macedonia and Turkey are members. Does that mean the UK will still be a member when it leaves the EU? We imagine so but we’re not entirely sure because no sovereign state has ever left the EU before.
We'll be returning to this issue in the coming days.