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<b>Poland 2007:</b> Disaster Strikes Again!

Sales & Trends

WARSAW, Poland – For the second year in succession, bicycle sales dropped dramatically; in 2007 hitting the lowest level in the history of the free bike market in Poland. They were lower even than in 1998 (818,200 bikes sold) and were just half of the figure recorded in 1995, the best sales year ever with […]

WARSAW, Poland – For the second year in succession, bicycle sales dropped dramatically; in 2007 hitting the lowest level in the history of the free bike market in Poland. They were lower even than in 1998 (818,200 bikes sold) and were just half of the figure recorded in 1995, the best sales year ever with 1,415,000 bikes sold.

The Bike Market in Poland (in units) 

 
2006
2007
Import
268,000
340,000
Export
873,800
785,000
Production
1,200,000
1,070,000
Consumption
844,00
709,300
Sources: GUS, Ministry of Economy

Sales totalled 673,000 units to the end of the 3rd quarter of 2007. Sales to the year’s end equalled slightly more than 709,300 bikes (usually the last quarter of the year in Poland makes 4.9% to 5.8% of bike sales).

In spite of those grim numbers, revenues in the bike trade were not hit as dramatically as one might expect. There was a drop, but according to Maciej Lepieszkiewicz, president of Giant Polska, sales of high-end and B-brand bikes soared high. There was drop in sales of low-end bikes – 180,000 units fewer were sold, but high-end sales recorded 30,000 units more than in the previous year and the average price increased.

New brands on the market

Giant, Wheeler, Cannondale and other renowned brands with good relationships with IBDs are feeling good. Some new players have also appeared on the market, such as Gazelle and Sparta from Holland as well as Hercules from Germany and a revived Specialized. The appearance of new bike brands on the market has not happened since the mid-‘90s.

This situation is connected with increased personal income in Poland, as well as with the flow of money sent to Poland by people who moved abroad to work (to Ireland, the UK, Netherlands and other EU countries). The increase in average income has resulted in rising car use, but the roads are not wider or better. Increased car traffic on poor roads resulted in a decline of the already small market for road bikes – from 1% to 0.5%.

Sales in department stores dropped dramatically

Worst affected by the difficulties in selling lower end bikes were the biggest players on the Polish market – Arkus and Kross. Those enterprises have rather small dealer networks and rely on the superstores. However, the bike booths in superstores in Poland shrunk during the last year as stores decided to display faster-selling products. In effect, bike sales via IBDs increased, while sales in department stores dropped dramatically.

Along with the increase in sales of high-end bikes, imports rose – from 268,000 units in 2006 to 340,000 in 2007. Exports clocked around a 10% decrease compared to 2006. This points to falling demand for bicycles in the ‘old’ EU countries, with lower end bikes not so attractive for customers in those countries.

Production dropped from 1,200,000 in 2006 to 1,070,000 in 2007, which translates to a 10% drop. On the other hand, stock was at its lowest level in history: the stock level of 442,000 at the end of January 2007 fell to 142,000 at the end of September.

What are the factors behind this situation? Last year was warm, average income increased; people working abroad supplied their families with money. It seemed to be an ideal situation to grow bike sales, but the opposite occurred. One of the effects of the increase of income is increased car and Powered Two-Wheeler use. Those noisy machines replaced bikes (in proportion 1:3, i.e. one scooter for 3 bikes) and 60,000 to 100,000 scooters were sold. The price range of these cheap models is PLN 2000 – 2300 (slightly more than € 500.

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