HIMACHAL, India – Indian component maker Sovereign en LA Bicycles from Thailand joint forces with the purpose not only to sell in India the latest international trend in bicycles, but also to export from India. Both partners feel that there is a market among the India middle class for a ‘lifestyle’ bicycle. The bike industry joint venture is also aimed at opening up a plant in India at a later stage for the export of bicycles to Europe.
Sovereign Industries announced the joint venture with the Thai company in a glittering ceremony. Sovereign’s Rohit and Rahul Kalra signed here the contracts with Prakit Lertyaovarit, Managing Director of LA Bicycle (Thailand) Co Ltd. This bike maker that is also owner of Bangkok Cycles, has a (combined) annual production of about 1.8 million units, whereas, it has a capacity to manufacture 2 million bikes. The share of export and domestic market is equally distributed at 50% each. LA controls almost 90% of the Thai bicycle market. Bangkok Cycles mainly caters the OEM business in N & S America and Europe. Both companies belong to the Thai conglomerate Sampran that has an annual turnover of US$ 70 million. The bicycle business contributes for US$ 30 million to the group turnover. Sovereign has an annual turnover of about US$ 12 million
The Thai partner is targeting the big (annual sales: 13 million units) Indian market, which is opening up to the international trends as the volume of ordinary black city bike is going down.
At the same time of the announcement of the Indo-Thai joint venture, a 17 member delegation with managers from Taiwanese bicycle factories visited India to explore possibilities for cooperation with their Indian counterparts to boost exports in particular to Europe. Main reasons for the visit are escalating production costs in Taiwan and the fact that the Taiwanese bike makers can not use their facilities in China due to the 48.5% anti-dumping duties the European Union imposes on from China imported bicycles. The regular import duty of 14% for bikes imported into Europe, is for Indian bikes, due to the GSP tariff, even lower and stands at 10.5%.
Related websites
www.bangkokcycle.com
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