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<b>Spain 2006:</b> New City Bike Trend To Drive Sales

Sales & Trends

MADRID, Spain – Spain is experiencing a new trend that could help sales for years to come. The growth is gradual, but city and folding bikes are finally becoming more prominent in the Spanish market. Spain’s industry is now at a mature stage of development, with no big changes in the figures for bike production, […]

<b>Spain 2006:</b> New City Bike Trend To Drive Sales

MADRID, Spain – Spain is experiencing a new trend that could help sales for years to come. The growth is gradual, but city and folding bikes are finally becoming more prominent in the Spanish market.

Spain’s industry is now at a mature stage of development, with no big changes in the figures for bike production, imports and exports over the last couple of years. However, globalization is affecting the way the industry does business.

The Bike Market in Spain (x 1,000 units)*

 
2003
2004
2005
2006
2007
Domestic production
432
410
254
376
153
Imports
790
1,157
808
1.173
617
Exports
528
488
488
497
100
Consumption
739
793
574
1,051
670

* Jan. – Aug. 2005
** Jan. – June 2007
Source: Sector Espanol Empresarial de la Bicicleta (SEEB)

Consumption is increasing

Spanish consumers are buying more bikes: over a million bicycles were sold in Spain in 2006, compared to 750,000 in 2003 and 2004. The increase does not seem to be related to sports models. Racing models enjoy healthy sales in Spain, but they are not increasing in popularity among final consumers. Sports bike sales have been quite steady for a long time, so this increase in sales volume is coming from a new interest in city and folding bikes.

Weather has never been a problem in Spain (for biking, at least). In fact, bike commuting is very popular in countries with much rainier (Benelux) and colder (Scandinavia) conditions than Spain. The main problem in Spain is the lack of infrastructure.

Investing in Infrastructure

However, City Halls from the biggest cities have realized the importance of bikes and are investing more money in order to create an infrastructure that can motivate people to commute by bike. Big cities like Barcelona are working on the issue, with positive results. New bike lanes are being created in an increasing number of localities around the country. This is because traffic and pollution are becoming a very important problem in the big cities. The cost of parking and fuel is also very high, so biking seems like a very efficient and smart option for those who need to travel short distances.

This infrastructure improvement and rising consciousness of ‘green’ issues is spurring more people to try this ecological and healthy means of transport. As José Miguel Aracama (BH Export Sales Manager and member of SEEB) says, “There is no doubt that city bikes are on a rising trend. And (infrastructure development) is the reason I understand for that increase in the consumption.”

Exports Stays Level

Exports have stayed more or less level in the last five years, at around half a million units per year. However, in the first semester of 2007, the figure was just 20% of the previous year’s result. While it is true that exports pick up at the end of the season, with the arrival of the next season’s collection, it’s thought that total exports for 2007 will fall quite short of the half million unit level seen in recent years.

The cause of this drop is not yet clear. One possibility is that the Spanish market is more receptive to domestic products than in the past. This is because consumers are more realistic and understand that the standard of quality is very high, no matter the brand. It is also true that the new group of consumers that buys city and folding bikes is less conditioned by brand values, with purchasing decision swayed by other factors such as price and features.

Globalization is also a fact in the bike industry. It is possible that some Spanish brands manufacturing bikes outside our country are shipping orders directly to customers (dealers and/or distributors) in other countries. These orders would not be included in export statistics, as they travel directly from assembly lines in Asia (mainly) to customers, wherever they are located. This is why Aracama believes that “actual exports are steady, regardless of the figures.”

Production Gradually Decreasing

It is clear that if you want to be competitive, you need a good price. And there is no alternative to taking your orders to Asia. Manufacturing in Spain is a difficult proposition and is becoming the exception.

Moreover, consumers do not place extra value on bikes that are domestically produced: they simply do not care about the origin of products. Consumers have learned that almost all products come from the same place and that the standard of quality has improved greatly in the past decade.

Domestic production is declining year by year, although not in a very dramatic way. Just to give an example, the drop in production between 2003 and 2006 is only around 50,000 units, a fall of over 10%.

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