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<b>Spain 2005:</b> Bike Market Getting Mature

Sales & Trends

MAARSSEN, The Netherlands – After years of substantial changes in the various data on the Spanish bicycle industry, Spain seems to be coming in balance. The overall trend for production, import and export figures is clear and most figures do not vary a lot. Whether increasing or decreasing, the variations on those values are getting […]

<b>Spain 2005:</b> Bike Market Getting Mature

MAARSSEN, The Netherlands – After years of substantial changes in the various data on the Spanish bicycle industry, Spain seems to be coming in balance. The overall trend for production, import and export figures is clear and most figures do not vary a lot. Whether increasing or decreasing, the variations on those values are getting less year after year.

In-house manufacturing, far from reality: producing or assembling bikes in Spain is past matter, for its main part. Although the ‘Made in Spain’ decal was not that glamorous like Italy (regardless of how objective the arguments behind that feeling could be), bikes manufactured in Spain were not uncommon at all. But things have changed and the labour cost in Spain is much higher than in Asia. Some bikes are still manufactured in Spain, although it is more a marketing issue and a way to keep some infrastructure alive and people at work.

Bicycle Market Spain 2003 – 2005 (in units)

 
2003
2004
2005 (Jan-Aug)
Production*
432,000
410,000
253,250
Consumption*
739,000
783,340
573,930
Import**
790,000
1,157,203
808,280
Export**
528,000
488,297
487,580

Production

Production has remained almost the same from 2004 to 2005. A decrease of 2,000 units on a total of 410,000 doesn’t seem to be significant. The variation from 2003 to 2004 was also only -0,5%. Spain seems to be getting to a state of balance. The possibilities of having an extra value in the high range with a Made in Europe product seem to be decreasing.

The quality of the products coming from Asia is rising and the consumer doesn’t seem to have such a negative feeling on bikes produced in Asia (as it used to be the case a few years ago). This might be one of the reasons why production is going down. Only companies with a certain history in the business (and the proper infrastructure) keep the production figures up.

Made in Spain

New companies creating their own brand prefer to get their products as ready to sell as possible, in order to ease the procedure. A made in Spain product will have an impact in the cost that consumers are not willing to pay. But it is also true that in the first five months of 2006 the production has decreased 21,4 % in comparison with 2005. A clear indication of where production in Spain is going. In the meantime, export figures are growing. In 2004, Spain exported 488,297 bikes. The same quantity was achieved at the end of August 2005. Asia offers huge manufacturing possibilities to companies that know what they want to sell but cannot (or are not willing to) create a production plan in this country.

The Commercial Director of BH (Beistegui Hermanos) thinks that: “It has been a good year for bicycle consumption. Looking at the various segments, it is clear that the mountain bike is the product that sells best. There is a slight decrease in road bikes. The city bike is still small, although the authorities are going into efforts to help this bike to become more popular. There is an important increase in folding bikes, although figures (in units) are still really small.”

Future of distribution

Competition in the market is tougher year after year. The only way to grow is getting market share from competitors. In a business with a highly identical product (and the same technology available to every brand), the only way to be more competitive seems to be price. And one of the directions the big companies are following is to ‘kill’ intermediate steps.

You can decide to have a EU warehouse and work with agents. You can use an existing distributor as warehouse but take care of sales with your own people. Or you can create (or absorb) a company that takes care of everything and that belongs to a mother company. A clear example of the latter has happened in Spain a few months ago. Dirt Racing, distributor of (among others) Specialized has become Specialized BC España. This has been a clever move from Specialized, that has taken out one step in the chain from production to consumer. This allowed them to offer very agressive pricing on the 2006 range. It made Specialized the leading brand in the mediumhigh end segment in Spain.

Growing urban transport

Reality in Spain is that the various bike disciplines stay in a quite steady situation. There is no new bicycle hype in view. But Spain still has the chance to grow a lot in city bikes for urban transport. Spain is one of the countries in Europe that enjoys many sunny days per year, but people do not use a bike for commuting. It is just a cultural issue, although this is changing. The government sees opportunities and has invested year after year in bicycle infrastructure in the cities. The cost of petrol will also help people take the decision of leaving the car at home and pedal. It will take time, that is for sure, but this is the opportunity to increase consumption figures in Spain.

* Source: SEEB
** Source: Eurostat


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