China (and Taiwan) Carbon Debunking

GSAstuto

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#1
I get alot of questions regarding Chinese and Taiwan carbon manufacturing. So, thought I'd share some of the real, inside knowledge.

Like your iPhone, economy of scale matters. China and Taiwan have much larger work forces who are willing (and able) to do very tedious, meticulous , hand labor at economically practical wages. Building carbon parts requires alot of manual steps with a fairly high degree of precision. The craftsperson needs to follow a 'recipe' exactly in order for the final product to come out of the oven perfectly.

The raw materials must be of high quality for the end product to be high quality. Start with junk and you end up with junk - or close to it.

The recipe has to be good. Carbon layup procedure is critical to the end result. Afterall, this is where the material itself is actually formed.

So - how does this translate to bicycle stuff?

1) The name 'brands' will contract and occupy the best suppliers and manufacturers. Their reputation is based on providing consistently high quality products. They will pay the highest per unit costs and guarantee the best wages. So the factories building 'name brand' components will always have the best trained craftspeople and access to the best raw materials.

2) The clone factories will produce components based on a merchandise demand market only. And then flood through channels like Ali-Baba, e-Bay, etc, where they know that at least <someone> will buy a clone becuase it's cheaper. Clone factories RARELY make name brand components or parts. Contrary to urban myth the same factory that makes, for example, a 'Chinarello' is definitely NOT the same factory that makes a real 'PInnarello'. Don't let anyone tell you otherwise.

3) Name Brand contracted factories will NOT risk their contracts by 3rd shift, clones or copyright violation. If they do, they could lose the contract. Far too much is at stake - and including the government, themselves guarantee the IP. So -there is actually very high degree of IP management inside the brand name mfg factories. It's only OUTSIDE these factories that the mass cloning business takes place.

4) What about generics? Many name brand mfg's will release molds after a few years and let the factory produce their own versions with some small changes. This benefits both the factory AND the brand because it keeps the supply chain moving and the factory economically healthy. Factory internal R&D is gowing as a result, and many factories are producing their own original molds and components that can be leased by the brands. This, in turn, allows for a greater variety of components at more reasonable prices.

5) Hybrids. Some makers, like us in fact, take a hybrid approach. Since we are a factory rep, we can access directly all the molds AND the R&D internal. Since we are using outside consumer (rider) feedback, we 'push' changes and requests back to the factory, rather than rely on 100% factory driven offerings. This means we can generate unique, hybrid components that cost less than a 100% original mold because we really don't need the extensive R&D to develop a 'new recipe' or mold when a pre-existing one may work just fine.

6) Accountability. At the name brand factory level. They are highly accountable. And most will respond to normal service, warranty requests and procedures as any company. However, many clone factories simply contract 'paper agents' to push their products. These agents never stock anything or even touch it. They just provide marketing channels and have quite low accountability. Caveat Emptor.

7) Cutting out the middle. In the bicycle food chain there are alot of middle players. There are assemblers, sub-distributors, aggregators, channel partners, local distributors and finally dealers. Every step the component has to take to get to your doorstep costs something in terms of direct cost or profit margin. Obviously reducing the middle can reduce the end user cost. But, that also has a cost. Because - basically, a factory is a factory. Their job is to pump out hundreds if not thousands of parts a day. If there is not a scalable network of channels outside the facotry, it cannot exist. And the factory, itself, cannot engage in this type of network building. So, typically only very small factories or individuals will deal 'direct'. All the rest will rely on network of agents, distributors, etc.

8) Reality Check. The bicycle frame itself is pretty mature and well known these days. The reality check is that , with everyone sharing roughly similar materials, methods and geometries - all the bikes will ride about the same. The most technically advanced bikes will have very slight advantages in ter ms of aerodynamics, dampening and weight. Which may result (depending on the rider) in a few seconds advantage per km over their less technically advanced counterparts. Knowledge is common. If someone comes up with a great idea, then it is quickly incorporated or copied into the majority of designs and manufacturers.

9) What do you want? If you are looking for the bleeding edge of technical innovation and performance, then you'll be getting your components from smaller individual manufacturers or very large brands that have the capacity to sink millions of $$ into R&D and closed door construction. If you are looking for 'something good to ride' , then the world is your oyster - becuase it will actually be pretty hard NOT to find something that fits your budget and purpose.

10 ) Some internal discussions. I meet with carbon fabs on a regular basis and always have interesting notes to share. One of the key topics is materials. Because the raw materials are really the most important part of making good carbon stuff. Several of the factories I meet with insist only on Japanese and EU /U.S. produced materials. from companies like Toray, GE, West, DuPont, etc. Even though the materials cost alot more than domestic produced materials - the brand mfgs (and quality) just warrant it. More and more Taiwan is producing higher quality chemicals and fabrics. So - I'm seeing this introduced more into the production. Especially for smaller parts. And we've also seen some high quality domestic Chinese fabrics and chemicals being tested with good results. But, I'd say that most name brand factories are using Japanese fabrics and to some degree Taiwanese fabrics and chemicals as the majority.

At the clone factory level - I've seen some pretty crazy stuff. One factory just buys the expired pre-preg at very low 'waste' fees and then reactivates it and uses it to build frames and other parts. The result is a very cheap frame with a very funky layup. It's heavy enough that it probably won't break. in fact the factory GM was proudly showing me the testing of one bike - and I admit - it would probably stand up to just about anything thrown at it. However - due to the layup method and material used, the lifespan of such frame is limited and the performance as in uniform flexibility, etc, is not so great. Plus they weren't that 'true' either. Meaning - the final bonding and hard part insertion was not very accurate. But, hey, if you're just looking to ride carbon, you can get these all day long at about $150 - 175 / ea.

Anyway - just a start on this thread. If anyone has any comments or questions - fire away!
 

FarEast

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#6
Having rode for two years with one of the "big 5" The 5 biggest manufacturers that produce frames & components for pretty much everyone out there I can say what Tim has written is spot on.

One thing to note though is that sometimes Giant and Fuji Kestrel will sell off a production line due to poor sales in an auction at stupid low prices - these are bought and then sold on eBay and Alibaba - so if you actually know your stuff you can sometimes get a bloody great deal.
 

GSAstuto

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#7
That's a whole NEW topic! And you're exactly right. Brand Name factories commit to production schedules and make the framesets / parts regardless of the sales channel efforts. So - many brands end up eating thousands of framesets and parts.

More and more lately, though, they work in terms of 90 day -120 day leadtime cycles based on about 250 - 5000 units each run. This helps reduce the overstock and allow for a little more agile production environment.

The high-end parts are made in much smaller quantity. With maybe exception of the forks and other small parts. The framesets will be produced in 25 -100 unit batches. Especially the really top-end parts will come from the engineering sample division and bypass the regular production chain until all the kinks are worked out.

Having rode for two years with one of the "big 5" The 5 biggest manufacturers that produce frames & components for pretty much everyone out there I can say what Tim has written is spot on.

One thing to note though is that sometimes Giant and Fuji Kestrel will sell off a production line due to poor sales in an auction at stupid low prices - these are bought and then sold on eBay and Alibaba - so if you actually know your stuff you can sometimes get a bloody great deal.
 

FarEast

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#8
You also have the smaller factories that will run a batch to win a order from one of the big names - these will either be an open mould or a 1 off run to prove the factories ability to produce a large batch of high quality gear - these are often found on Alibaba or offered directly to small brands that only produce a limited range of products in limited numbers.
 

FarEast

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#9
Also one last thing is that there are lots of little factories popping up all over Taiwan and China - pretty much like what happened in Europe back in the 60's alot of these shops have some amazingly talented engineers and staff that have worked for some of the big names and they are producing some quality stuff.

Wheels, frames, components - you name it. Some will innovate and go on to be around in another 5 - 10 years while many others will either pull out once the money drys up or reabsorbed by the big names- just like with alot of the brands in Europe.

Remember Taiwan are the leaders in the industry and its one of the reasons why the west origianally moved most of the fabrication out there!
 

StuInTokyo

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#10
Having rode for two years with one of the "big 5" The 5 biggest manufacturers that produce frames & components for pretty much everyone out there I can say what Tim has written is spot on.

One thing to note though is that sometimes Giant and Fuji Kestrel will sell off a production line due to poor sales in an auction at stupid low prices - these are bought and then sold on eBay and Alibaba - so if you actually know your stuff you can sometimes get a bloody great deal.
Funny but that is very similar to how the beer companies operate, they have to commit to make "X" amount of beer, well ahead of time, if there is a cool rainy summer, then at the end of summer beer goes on sale at stupid low prices at all the discount shops, as the makers have to clear out there stock.

Very interesting write up Tim, thanks!
 

GSAstuto

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#11
Interestingly now is that Taiwan is more R&D and innovator role as well as knowledge transfer than before. So, it's acually similar to the U.S. and other advanced countries in that it has evolved to more service based economy (at higher costs / incomes) and then exports that IP to China as it's primary trading partner. Taiwanese plant managers, instructors and lead technicians and engineers are very hot items in the China side HR Market. The top factories almost always have Taiwanese executive engineers and operations managers. And the lower end factories can best to hope for a domestic (Chinese) manager that at least worked under a Taiwanese trained facility.

One factory that produces some small parts for us was so proud on visit that they had managed to acquire a Taiwanese layup engineer - and as a result, their entire layup process would be revamped and capable to handle very new and complicated products.
 

theDude

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#13
given the amount of expertise in Taiwan now with making carbon frames, do you think that there is any real quality premium for the non-TW made stuff? (like Time, some colnago I think....)
 

FarEast

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#14
Ok Colnago, Pinarello and Time are all made in Taiwan - Fact. A bit of research will enable you to understand how they are allowed and get away with putting a MADE IN ITALY sticker on some of the frames.
 

theDude

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#15
Ok Colnago, Pinarello and Time are all made in Taiwan - Fact. A bit of research will enable you to understand how they are allowed and get away with putting a MADE IN ITALY sticker on some of the frames.

It's not like I haven't done some basic searching.

Sure, you can't believe everything you read, but had found this:
http://www.capetowngiants.org.za/in...as-my-bike-made&catid=38:maintenance-a-repair

So show me that my EXAMPLES are wrong.



For the rest of you, still interested in input on the HYPOTHETICAL question I posed.


:bike:
 

FarEast

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#16
Not sure what you mean by that - Do you mean that I need to prove that Colnago's, Pinarello and Time are made in Taiwan?

Well that's easy I just need to flip my Prince, FP3 over and point to the MADE IN TAIWAN Sticker on the bottom of them. However in the past 2 years Pina have made a move to have at least 80% of the value added to the frames in Italy - this was done with the new "Diamond" finish that they have that is only done in Italy along with the branding of the Bike.

As regards to other proof well Tim knows the deal on being allowed to pubish photographic evidence of the factory floors for famous brands.

In regards to the Hypothetical question - yes - Companies such as Specialized spend a huge amount of money on R&D back in the US along with other brands that aggressively protect the technology - Milani, Pina and Colnago do thier R&D in house. Also new brands to the market such as Neil Pryde understand that if they want to stand out as a player then they need to bring something totally unique and totally internally designed and built to the table - but many new brands just can not afford the cost of carbon layup in house and were forced to seak outside help.

However I think the market is being flooded - just as it was in the 80's with BMX and then the 90's with the Mtb. Many of the OEM facotries are looking to release thier own brands and right now they have the muscle and the tech to do it - I wouldn't be suprised to see some of the older brands that start to struggle taken over by Taiwanese brands such as Fuji was by Fuji USA and then by Fuji Taiwan.

There was a thing in the cycling press a few weeks back where Specialized went toe to toe with a new brand that had off shot from thier own development team.
 

theDude

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#19
Not sure what you mean by that - Do you mean that I need to prove that Colnago's, Pinarello and Time are made in Taiwan?

Well that's easy I just need to flip my Prince, FP3 over and point to the MADE IN TAIWAN Sticker on the bottom of them. However in the past 2 years Pina have made a move to have at least 80% of the value added to the frames in Italy - this was done with the new "Diamond" finish that they have that is only done in Italy along with the branding of the Bike.

As regards to other proof well Tim knows the deal on being allowed to pubish photographic evidence of the factory floors for famous brands.

In regards to the Hypothetical question - yes - Companies such as Specialized spend a huge amount of money on R&D back in the US along with other brands that aggressively protect the technology - Milani, Pina and Colnago do thier R&D in house. Also new brands to the market such as Neil Pryde understand that if they want to stand out as a player then they need to bring something totally unique and totally internally designed and built to the table - but many new brands just can not afford the cost of carbon layup in house and were forced to seak outside help.

However I think the market is being flooded - just as it was in the 80's with BMX and then the 90's with the Mtb. Many of the OEM facotries are looking to release thier own brands and right now they have the muscle and the tech to do it - I wouldn't be suprised to see some of the older brands that start to struggle taken over by Taiwanese brands such as Fuji was by Fuji USA and then by Fuji Taiwan.

There was a thing in the cycling press a few weeks back where Specialized went toe to toe with a new brand that had off shot from thier own development team.
thanks for the input / edit.

i suppose if the consumer values in house production, that gets slapped onto the price tag and presto-bango, you get something that is 'reassuringly expensive' (to steal the Stella ad). I guess the R&D is worked into the cost anyway.