Is China's Labour Crisis to Spoil Upbeat Mood at Taipei Cycle 2010?

TAIPEI, Taiwan – In the early hours of THE bike industry show of the year the question is how the current labour crisis in China will affect all the positive feelings on the 2010 bike market? Will labour shortages in China that are already hampering lead-times on (aluminium) frames turn into a more widespread problem and stretch deliveries for other components too?

Will lead-times become THE general issue at this year’s Taipei Int’l Cycle Show? That’s the major question as major Taiwanese companies in China are plagued by labour shortages. This was reported by the Taipei Times last week. The newspaper said that the Taiwanese companies are unwilling to make this public for fear of an adverse market reaction.

The Taipei Times quoted the president of a major electronics manufacturer who said: “The situation is really serious. Just go to the human resources market and find out. Major Taiwanese electronics companies have been sending representatives to local railway stations to recruit workers who can start to work in the factories.”

This statement confirms Bike Europe’s news in its March 2, 2010 eMail Newsletter. Here we reported on the rising lead-time for (aluminium) bike frames, caused by employees switching to other companies together with a consolidation trend going on among Chinese producers. According to the Taipei Times report various sectors are hit by labour shortages.

The shortages are mainly caused by the fact that workers can now find jobs closer to home more easily. This makes them less willing to travel for work to the coastal provinces, which are the traditional bastions for Taiwanese businesses in China.

The Taipei Times report also said: “Moreover, the younger generations in China tend to be more educated and ambitious than their parents and have higher expectations of their jobs. The simple, repetitive work available in traditional low-end, labour-intensive enterprises fails to match their expectations. The Kunshan City government has recognized the problem. However the labour shortage is widespread and the problem can’t be solved in the short term.”

Apart from the labour shortages in China and the effects it could have on lead-times, the general atmosphere at the 23rd Taipei Cycle is expected to be positive. Next to the top three bike makers in Taiwan (Giant, Merida and Ideal) also the Taiwan Bicycle Exporters Association (TBEA) anticipates, after a difficult 2009, a healthier 2010.

TBEA Chairman Ying-Ming Yang said: “Taiwan could experience double-digit export growth this year, as overseas dealers replenish low inventories. Other factors stimulating bike sales could include good weather, growing environmental awareness, and the constant threat of increased oil prices.”  
Also the nr.1 in Europe (Accell Group) is looking forward to a good 2010 while the world’s biggest bike component maker sees a clear recovery of the worldwide bike market.

In its recently published 2009 financial report Shimano notes that there are: “Clear signs of recovery mainly in the mid-range and high-end markets.” Moreover, the worlds biggest in bicycle components speaks of a ‘robust market demand’ and forecasts for 2010 a net sales growth in the bicycle division of 11%!