East European Bike Sector Hit Double Hard

MOSCOW, Russia – One of the participants of the last month held Velo-Park Show in Moscow described the current state of the Russian bike market as: “We are all so vigorous and vital here, but it is a poker face, - in fact we are all deep in panic.”

Bike Europe surveyed next to Russia, the bike sectors in Poland, the Czech Republic, Slovenia and the Baltic States. The overall picture is that 2009 bike sales in these countries were hit double hard.

Financial crisis & currency problems

The bike sectors in these Eastern European countries were deeply troubled by the state of their economies. Next to the financial crisis, currency problems burdened sales. For instance the decline of the Polish zloty against the euro and the dollar had a direct effect on prices for bikes. Some importers were forced to significantly increase their prices; even over 20%. Prices of components for the aftermarket increased even more than bikes, parts prices went up by 20 to 30%.

In Russia 2009 Sales went down 40 to 70% in 2009 depending on the bike segment. New custom regulations hit the low price import tremendously. What is left more or less intact is local production of entry level bikes from imported parts and mid-level branded bikes. But raising the money needed to invest in parts and stock is extremely difficult as 2009 was a year of very expensive money. Small companies could get a loan at an interest rate of 15-20%, or were refused at all.

The Czech bike sector saw double digit decreases in 2009. Exports of bicycles dropped by 23.5% last year while the import decreased by 21.5%. Bike sale is estimated to have dropped by about the same figures.

From Poland it’s reported: “The Polish cycling industry sold 541,000 bikes in the first three quarters of 2009 and is on track for a 21% drop in turnover when fourth quarter figures are finalized. This dramatic drop mostly affected suppliers of low end bikes.”

As for all sectors, 2009 was not easy for the cycling one in Slovenia. Distributors and shop owners. In Slovenia these are the same people in many cases. They’re talking about sales drops up to 20 % compared to 2008. That is when looking at the quantity and about the same goes for turnover.

The Baltic states are among the youngest members of EU, but they are playing an important role in the European bicycle market, especially Lithuania, with one of the biggest factories in Europe. This bike factory is Baltik Vairas and is a partnership between German Panther International GmbH and the fifty year old company Vairas. According to Eurostat Lithuanian exports dropped from 387,000 units to 236,677 units from 2007 to 2009. Bike sales in Lthuania is estimated at about 80-100 thousand units.

Estonia is the smallest of the three Baltic countries with a population of 1.3 million, Estonia imports most of its bikes from Taiwan (10,897 units in 2009) and Cambodia (8,158 units). Yearly capacity of the market is about 30-40 thousand bikes, with an average sales price around € 200.

Latvia with 2.23 million people has the lowest GDP of the three Baltic States and displays similar drops in exports and imports as Estonia. . Total consumption of the market is estimated at 30,000 units.

Bike Europe’s March edition (publication date March 30, 2010) features extensive Market Reports on the countries mentioned here.

• For more Market Reports, click here