TAIPEI, Taiwan - Just hours before the opening of the THE bike industry show, it’s clear that uncertainty is to dominate this year’s Taipei Int’l Cycle Show. Uncertainty not only about the economy and consumer spending in Europe, but also on deliveries as supply chain troubles are mounting.
The latest reports on the status of the European economy indicate that growth will be minimal while for some countries there’s even a decline predicted for 2012. Of course that brings further uncertainty on how the bike markets will develop in 2012. However, last week the European Commission reported that consumers and producers are regaining confidence in the EU economy.
The European confidence-index increased by one point to 94,4. In Poland, France, The Netherlands and Italy the biggest gains in confidence were reported while the index for Germany and Spain didn’t change.
Next to the European confidence-index, also the one for the United States increased to the highest level in over one year. The index came to 70,8, as was published by the US Conference Board. Last January this American index stood at only 61,5.
Shimano’s delivery problems
Next to worries on the economy in Europe and the US also supply chain troubles are expected to leave their mark on this year’s Taipei International Cycle Show. Last week Bike Europe reported on Shimano’s delivery problems which are caused by an unexpected high demand in China, Indonesia and South-America for quality bicycles.
Shimano’s current delivery problems are in particular in entry to mid level mountainbike components (Acera and Alivio groupsets) as well as Nexus 7-internal hub gear sets. Some bike makers have been faced with the delivery of such components in week 22 to 23 instead of the earlier by Shimano forecasted week 6 to 8. There are also some reports on delays of other components such as for example chainrings and hubs.
Labour riots in Cambodia and Vietnam
Recent labour riots in Cambodia and Vietnam are also contributing to supply chain worries. The riotes even turned turned violent, with three demonstrators being shot in Cambodia two weeks ago. The demonstrators want higher wages. They insist monthly salaries to be raised from US dollar 65 to 85. After a few days on strike Cambodian factories producing sporting goods products for companies like Puma re-started operations. It’s unclear yet how all this affected bike production in Cambodia and Vietnam.