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Despite 20 Year Low Bike Export, Positive Balance Sheets for Taiwan Makers

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TAIPEI, Taiwan (March 6) – The shift in bicycle production from Taiwan to China becomes more and more pronounced . In 2001 sales totals of Taiwan-made bicycles threaten to break a 20 year low. Though full year statistics are not yet available, only 4.45 million complete bicycles were exported in the first eleven months of […]

TAIPEI, Taiwan (March 6) – The shift in bicycle production from Taiwan to China becomes more and more pronounced . In 2001 sales totals of Taiwan-made bicycles threaten to break a 20 year low. Though full year statistics are not yet available, only 4.45 million complete bicycles were exported in the first eleven months of 2001, compared to 7.06 million during the same period in 2000, according to the Taiwan Bicycle Exporters’ Association (TBEA). At the same time, the TBEA estimated that Taiwan companies turned out around 23 million bicycles through their China factories during 2001, with the vast majority of production for export.
But while business has been bad in Taiwan, many Taiwan companies have been able to rely on profits from China to turn positive balance sheets. The shining example of this trend is Giant, Taiwan’s largest bicycle maker. Giant’s Taiwan-side production shrank by around 30% to 660,000 units in 2001, with revenues falling by 15%. Yet Giant’s 100% invested Kunshan factory produced 2.2 million bicycles for the year. In 2001 Giant Global Group produced a total of 3.9 million bicycles, including 250,000 at its plant in the Netherlands. The company recorded revenues of TWD14.1 billion (€ 465mn;US$405mn) last year, and unlike other listed Taiwan bicycle makers, maintained a stable stock price during the year.
Increased sales from China heavily impacted Taiwan’s export totals in 2001, especially the key US market, which has been quickest to purchase from China. Through November 2001, Taiwan’s exports to the US dropped by just over 50% to 1.2 million units, while revenues slipped by 42% to US$ 138 million. But bad news didn’t come from the US alone. Export volume to the EU was also down 31% to 1.48 million units in the first eleven months of 2001, while exports to Japan were down 30% to 1.01 million units. Sales of parts and components were similarly down for the period, with export revenues down 25% to US$ 256 million.
The brunt of the deteriorating business climate for Taiwan’s industry has been borne by small and medium sized manufacturers that either didn’t have or had only recently invested in overseas operations. (DF)

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