View Full Version : Cobra Monopoly ???
21st September 2010, 03:58 AM
Isnt it time so called manufacturers actually manufactured something ???
We`ve reached point now where Cobra are almost only actual manufacturer worldwide and that surely can not be healthy for prices ??? We`ve seen board prices shoot up recently; I wonder would this have been case had there been more healthy "real" competition . ????
21st September 2010, 06:19 AM
21st September 2010, 05:02 PM
It is not the cost of manufacturing that makes the cost of the boards, Cobra sells the boards to the brands at about 20% of their final cost. So even if they increase their rates by let's say 10% from one year to another (which is huge), it is only 2% of the final price already, so it is not because of them if we see the prices increasing so much.
The main responsibles of this situation are us the customers! If we would not buy the boards at those prices, they would not sell them, that's the law of the market! When Mr. Starboard produces an Isonic in Wood and a Full Carbon one more expensive; guess which one he sells better: the full carbon!
We are all fashion victims!
21st September 2010, 05:12 PM
Starboard ; Tabou ; Fanatic ; F2 ; Mistral
They are responsible for 90% or so of boards manufactured ???
Their pricing structure has got to have a massive impact on end price ???
21st September 2010, 05:45 PM
It has an impact of course, but as I said not so massive. The price of the board is made also of R&D, marketing, transportation, benefit of the brand, benefit of the importer and benefit of the retailer, you add above all a lot of taxes and you get the price of your board! Cobra price: not more than 20%!
22nd September 2010, 01:25 AM
Witrh all due respect your argument does not make much sense.
Production of boards was originally started (successfuly) in Thailand because they coiuld manufacture both up to a standard and equally important down to a price.
Had your argument been of prime importance manufacturers wuld not have moved away from Europe in the first place.
Fair comment lots of things influence retail price but all manufacturers have these costs in common.They all have the same manufacturing cost now because Cobra is the only facility capable of producing boards to the correct standard /number/price. They have a monopoly !!!
Its becoming clear that other "manufacrurers" just cant afford the investment to compete ; thats why we are seeing board prices go up at way over any ones inflation rate. (Just look at prices of JP boards over last 5 years.(Or Cobra boards sold as JP to be more correct !!!)
Its a shame but we`ve reached point where manufacturers are simply "marketing" tools.
Starboard/JP/F2/Mistral/Fanatic are no longer manufacturers. (Admitedly some never were)
22nd September 2010, 04:13 AM
I agree that the "close to monopoly situation" most likely will cause higher prices. But from my point of view windsurfing boards are still relatively inexpensive, both when compared to other types of sports equipment (e.g. bicycles) and when compared to windsurfing boards 10, 20 and 30 years ago (actually, the price have been relatively constant in spite of inflation and a much higher quality today).
22nd September 2010, 05:31 AM
I'm not involved enough to know the facts about what Cobra charges, but from what I've heard from various parties "at the beach", Cobra have rather used their position to _dump_ prices, keeping other factorys out of the equation. Remember, building a board is still involve a lot of human labour and you can pretty much reverse the argument above and ask yourself how much the workers at Cobra makes and if that is decent or not.
From what I heard, a large part of the increased prices has to do with the workers at Cobra getting payed better which, in the big scheme of things, is a good thing (remember the strike a few years back?). Maybe Cobra as a factory takes out a bigger profit as well, but that's just not what I heard.
And since there in fact ARE other factories (Tunisia, Taiwan, China, SLovenia if I remember correctly) the monopoly argument does not hold. AHD, Mistral, T1 and Witchcraft are some brands manufacturing outside of Cobra. Moreover, if we look back 15 years, boards were more expensive than now (if you include the inflation.
22nd September 2010, 02:50 PM
Haven`t AHD gone bankrupt !
Leaves Mstral and T1 ???
22nd September 2010, 04:10 PM
AHD is not in bankrupt, the brand has been sold to their former chief developper Bruno André. They have actually a pretty good success in France with their SeaLion board, a lightwind waveboard/SUP. They still make the board in the Tunisia factory which is still the property of the former owners of the brand (and produces mainly seats for commercial planes now).
As #6 said, most of our brands has never been manufacturers. On the actual market, only BIC manufactures its ASA boards I guess.
22nd September 2010, 05:04 PM
BIC has a Factory in Vannes, France, where they still manufacture ASA boards (Techno Pro are made by Cobra I think). Selling prices are rather low, which shows that manufacturing in Europe can be competitive. Admittedly the range is stable and most of the R&D investment is amortized. But do we really need dozens of new shapes every year? I agree that prices have not increased so much in twenty years given the inflation. A good production board was around 1000 € in the early nineties. What increased significantly since a few years is the price of "limited", "full carbon" and the like editions. Interestingly some brands are even withdrawing standard models to keep only the LTD, Fanatic Ray/Hawk for instance. IMHO this is due to our addiction to carbon and marketing strategy more than the cost of carbon itself, which may only represent a small %. It is absolutely fair that Cobra workers get decent pay, but I wonder what the impact on selling price vs. ex works cost is. Like for many products, there are probably huge margins all along the chain.
22nd September 2010, 07:23 PM
I would'nt say that the margins are huge: I noticed no billionnaire (et least multi-millionnaire) in the market! (maybe Mr. NP; Naish -but the money is from the kite - and Svein R. the day he will sell Starboard)
But agree with you and it was my first assessment: the prices are expensive because the consummer is a carbon addict!
23rd September 2010, 12:01 AM
Hi Viking, you say that production cost is no more than 20% which means brands and distribution share 80% (from which they shall cover their own costs). Nothing wrong with that: those guys must make money otherwise we wouldn't have so many products available. By the way there are certainly industries with much higher margins. I'm just wondering how any cost increase is passed to the end user. In the fair trade model the bit more you pay goes to production. I guess the reverse is not true, and this is of course not specific to windsurf.
23rd September 2010, 01:10 AM
So what we are saying here then is that its perfectly OK for
A) Manufacturers to call themselves " manufacturers" when infact they are designers/marketing agencies ?
B) Its a good business model to strive for with one manufacturer responsible for 90% plus of boards built ????
There is another issue here aswell. If workers at Cobra were paid at a comaprable rate to European workers then why are they so competitive.???
Its not the case at all that boards are comparable price to 10 years ago; I accept market is led along on the carbon garden path and that cheap tough boards (Tiga/Hifly polyethylene) are no longer required (because of the maketing BS by other brands) but over lasst 5 years boards have shot up in price; with Ltd /Carbon models approaching £2000; and nobody is questioning the position manufacturers have got themselves in to; with virtually none of them capable of sourcing other builders.
Imagine what Ford would be charging for cars if there were no Vauxhall/Fiat/Nissan/Toyota/Audi/Nercedes etc etc.
Sailors are gullable and becoming niave !!!
23rd September 2010, 12:08 PM
thanks for pointing out that Mistral is made in Viet Nam, Thommlen made in China, and Wichcraft in Bulgaria, AHD in Africa
but the major brands JP Starboard come from Cobra.
Their are plenty of choices to be made, but the local dealer is going to stock what sells, and that will be those that have a huge advertiseing campaign, and visible team, who win events.
you don't like the Cobra board, you have plenty to pick from, then there are the custom houses,that are making 2012 boards now for the price of the pro models or less.
23rd September 2010, 02:41 PM
Agree with Carvesalot.
Poster #14 if you don't want to pay such a high price, wait a few months and you will have 25% discount on a new board, or buy second hand, or get one of those cheap ASA boards from BIC (made in France, BTW). Otherwise don't complain. Nobody forces you to spend so much money. It's really up to you.
Now if the question is about monopoly/oligopoly, I would say that [one factory - many brands] is probably better than [many factories - one brand] at least for the workers, and probably for customers as well. Maybe not an ideal situation but it brings some economy of scale, and there is still room for competition through design. If there was only SB (or Ford) yes it could be very bad, but it's not yet the case.
23rd September 2010, 11:15 PM
I`m not complaining about the costs of boards ;I`m complaining about the monopoly and likely effects it has. All the major players have there boards built at Cobra. (SB;Fanatic;F2;Tabou) Accounting for at least 90% of boards sold.
It seems at odds that these same comapanies wanting to attract new sailors let this situation arrise.
How on earth can anyone think this is healthy for our sport is beyond me. Cobra have (with the help of major players) positioned themselves to be in almost complete control of our sports pricing !!!
26th September 2010, 02:32 AM
If you guys think there is a monopoly why don't you build a factory, offer the credibility and offer lower prices, I am sure no one will complain...
You can do that in Thailand, not Europe, if you prefer.
Although there are a couple more factories already (Vietnam etc) for some reason they haven't managed to persuade the big brands to move there.
When Mistral changed owner and the production was moved to Vietnam a lot of people were concerned about the quality. It could be better of course but it could also be worse. These people said, ok, I will consider buying a Mistral after the first year. Let's see how they end up first...
Furthermore, regarding the companies calling themselves manufacturers.
They are actually producers. The fact that they don't own the factory doesn't mean they don't own the shapes, material choice (which takes a lot of engineering) R&D etc. but most important they finance their project.
Take away all the above ingredients and all you've got is the capability of building something... more like a great builder who doesn't have a plot or a plan.
If I am not mistaken Cobra set up this factory (a few years ago) in order to manufacture their own boards but they were lacking some of the above ingredients so they decided to offer their facility to more than one brand instead. Surely a clever move.
Instead of every brand investing in their own hi tech factory in order to produce their 10 000 (max 15 000) boards per year, they use the same factory. I believe prices would have been more expensive had it been otherwise. Not to mention what it would do to the smaller brands with a production of 2500 bards per year (like F2...)
A specific brand increased their prices to distributors by 8,4% last year (for 2010 models) and another 6,5% this year (2011 models). Even if you take this number raw and add the taxes you end up with an interesting increase on the product at the shop.
Our lives are expensive and windsurfing has never been a cheap sport.
For the record Fanatic Hawk has been produced (and still is) in both constructions and Fanatic Ray will too (for 2011).
I will agree 100% about us consumers being spoilt as we all want the pro model for our average abilities and we are willing to pay the extra 150 euros for it. We all say "only 150 euros difference, get me the pro model"
Also, although distributors pay the same, there are big differences between the countries, where retail prices are concerned, as it is natural that different standard of living can afford different prices. So, in the UK for example a board can be somewhere in the area of 1800 euros while in another country the same board can be around 1500 euros.
Lastly, unfortunately, we can't compare windsurfing boards to bicycles just because there is a huge difference in volume between the 2 sports.
26th September 2010, 02:33 PM
Mistral set up a factory in Malaysia in the late 90's.
It didnt work.
I had almost every board they made but as they went into decline, I switched to SB.
The SB juggernaut is gathering speed !!
26th September 2010, 03:07 PM
Its not a case of thinking there is a monopoly its accepting that there is one.This may or may not be beneficial to the sport for reasons explained in contrasting posts earlier.Anyone who thinks this not to be case needs to look at numbers of boards produced by "manufacturers".(And there viability; AHD?)
On numbers sold Cobra must produce 90% ???
And as far as setting up a plant to compete thats a purely spurious argument.The level of investment required to now compete with Cobra would simply not be profitable in what is at best a constant market.
Brand are now at the mercy of Cobra pricing.
PS look in a dictionary for meaning of "manufacture". (Derived from manual;by hand ???)
26th September 2010, 05:13 PM
Many companies call them manufacturers while they only/hardly design their products. Even in a mono or oligopoly, nobody wants to kill the business by pricing more than customers are willing to pay. Of course some will pay more for extra carbon, but fewer and fewer as the price goes up. Glad to learn that Std Ray will be available again in 2011.
16th December 2010, 05:20 PM
That answers it then ! They do have a monopoly !!!
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