At Taipei Show Start Industry Not So Positive Anymore

TAIPEI, Taiwan – Negative reports of the consequences of the financial crisis are everywhere. On the face of it, the bicycle industry seems to have escaped the worst effects thanks to being an alternative to expensive cars and thanks to its health benefits. But despite that the first cracks have started to appear in the bicycle’s industry positive front.

Bike Europe made a review of remarks we received in the past month from manufacturers, suppliers and retailers as well as industry organizations on the current situation in various markets. A complete report will be in the March edition, but here’s a short overview of the current happenings per country.

France: preparing for a difficult season

Sales have been decreasing from November last year in all distribution networks. First reports say that the level of winter orders was quite good, but expectations are that bike sales will be affected this year as the biggest part is for leisure use only.

Germany: weather conditions are more important

 The German bicycle brands are generally reporting positive market conditions. Perhaps the German industry is more used to economically difficult periods and has adapted itself better than its neighbouring countries. It is said that the economic crisis is not such a major topic as the weather. Weather conditions at the start of the season are regarded as much more important.

The Netherlands: no reluctance among dealers

The Dutch industry show FietsVAK last January was an important indicator of the economic status of the industry. Immediately after this year's show it was reported that no changes in dealer buying behaviour were noticed compared to the dealer shows five months earlier.

Italy: season starts with high inventory

The Italian bicycle market has already been confronted with the negative aspects of the economic situation as November and December were very bad months. It is said that on average, bicycle companies have a 10% to even 15% higher inventory than a year before. However, expectations for 2009 are not bad at all. Also because (electric) bikes could become a 30% tax incentive from the government.

Canada: bicycle sales good when times are tough

Good orders in hand for 2009, is reported despite the fact that some customers have become more conservative in their orders as they see growing unemployment especially in the automotive business. Dealers have booked slightly fewer bicycles than this time last year.

Sweden: banks are very reluctant

Order-intake is very good. At the same level as in 2008 or even higher, is reported. A ‘lack of action’ from the banks is criticized which presents problems with judging clients on their credibility. Another thing that's affecting the bike business is the drop in value of the Swedish currency against the euro and the dollar.

Czech Republic: industry smarts for long lead times

In the past few years the Czech Republic has emerged as one of Europe's lower-cost production centres for the bicycle industry. Operators there are pointing to the issue of long lead times which makes it impossible to react immediately to the economic crisis. “Everyone is waiting for what is going to happen next. We will be wiser in the spring. It is really not easy to find orders for the second half of the 2009.” Also in the Czech Republic the national currency rate drop drop against the euro and the dollar is a major concern.

United Kingdom: smaller retailers have more flexibility

In the UK it is said by the Association of Cycle Traders (ACT) that there’s a significant number of general retail closures. “The bicycle trade has not as yet succumbed to the same pressures, partly because the sector has been more resilient and also because smaller retailers have more flexibility to adapt in these conditions.”

Portugal: orders decrease significantly

The Portuguese bicycle industry is realistic about 2009 as orders form complete bikes have decreased significantly. Parts makers in the country, which exports a substantial part of their production, are reportingting a slowdown in production due to the season rather than a decreasing number of orders.

The following Bike Europe correspondents contributed to this report: Jo Beckendorff, Milan Motl, Par Edgren, Alexandre Silva and John Palmer.