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<b>France 2007:</b> Market Breaks Price Trend

Sales & Trends

PARIS, France The French bike market was dominated for years by supermarkets and the very cheap bikes they sell. That is changing fast. As distribution switches to channels that are able to sell bikes at higher prices, the attractiveness of the French bike market is growing.

<b>France 2007:</b> Market Breaks Price Trend

PARIS, France – The French bike market was dominated for years by supermarkets and the very cheap bikes they sell. That is changing fast. As distribution switches to channels that are able to sell bikes at higher prices, the attractiveness of the French bike market is growing.

The Bike Market in France (in units)

 
2005
2006
2007
Total sales
3,760,200
3,527,700
3,527,600
Production
1,529,000
1,192,000
1,130,000*
Import
2,464,000
2,193,000
1,826,000
Export
422,000
217,000
232,000

One of the channels that is able to sell higher priced bikes is the sports department store; exemplified by companies like Decathlon and Go Sport. They, and in particular Decathlon as Go Sport is financially struggling, were the big winners in the distribution battle of 2006 and they were able to repeat that in 2007. Half of the 3,527,600 bicycles sold in France in 2007 were distributed through the big sports stores; up 2% compared to 2006.

Stable sales

Bike sales in France in 2007 ended up at exactly the same level as in 2006. During that year sales dropped 6.2% in units compared to 2005 while in terms of revenue the French market decreased 4%. In particular value-wise the French market was able to recover last year. In terms of value bicycle sales recorded an increase of 5.8% according to the French industry association Tous à Vélo. The 3,527,600 bikes sold realized € 876.5 million (compared to € 828.4m in 2006). The average price of a bike sold in France last year stood at a respectable € 248.46.

In addition to those 3.5 million bikes, of course, lots of parts and accessories were also sold in France and repairs were made to bicycles. Those activities brought in total revenue of € 553.5 million; up a good 5.5% on the 2006 total. Adding up bike and P&A sales leads to the conclusion that the French bike market in 2007 was worth a total of well over 1.4 billion euro.

Most industry insiders are convinced that this figure will see further growth over the coming years. They regard the public bike rental projects that run in several cities (of which Vélib in Paris is the most renowned) as great incentives for bike sales. Through projects like Vélib people get to know the qualities of biking in cities and after a while will buy their own instead of hiring one.

Production

However, despite such optimistic views about future bike sales, the current situation in the French industry is not all well. Production dropped a big 22% in 2006 as the supermarkets lose interest in selling bikes. The drop continued in 2007 but was less big compared to a year earlier; only 5.2% to 1.1 million units. This is also expressed in the supermarket share of unit sales which again dropped in 2007 to 26.5% (was 28%). Value-wise the supermarkets accounted for 10% of French 2007 bike sales while the average price at which they sold bikes was just € 95.33.

The number one bike supplier to supermarkets in France is Cycleurope which is also the biggest French bike producer. The company, owned by a Stockholm-based holding company called Grimaldi Industri AB, operates two production facilities in France. One of the two, the Machecoul plant, has been sold to the local government under a leaseback scheme. The other main supplier of supermarkets in France was Cycles Mercier. This subsidiary of the Accell Group announced in September 2006 that it was to stop its supermarket business due to, as a Accell Group spokesman put it, ‘price madness’ in France. In 2007 Mercier’s production activities were integrated with those of the other French producer owned by Accell; Lapierre. This bike manufacturer focuses entirely on the dealer market.

B’Twin Village

The future of bike production in France, however, looks quite bright. In particular because of Decathlon’s announcement that it would take bike production into its own hands, starting in 2009 with production in Lille. The French sporting goods and bicycle giant is currently busy equipping its new facility. However, it is said that there are delays in starting up production. The 200,000 square meter B’Twin Village is to open next year with planned production of just 70,000 units. It is unknown why the French giant is behind schedule.

The bicycle assembly plant will bring employment for some 300 people when it is up and running at capacity. The plant will be part of Decathlon’s ‘B’Twin Bicycle Village’.

Decathlon is by far the biggest bike seller in France. Sales in 2007 are estimated at about 1.4 million bikes. For the whole of Europe Decathlon is said to have sold 2.4 million last year. The sporting goods retail giant currently operates 405 stores in Europe and had 2007 sales close to € 4.5 billion.

Import & export

Bike import into France dropped quite substantial in 2006 and 2007 with respectively 11.0% and 16.7% to under the 2 million units level. Taking into account that production dropped in these years and also taking into account that Decathlon managed to grow its sales to 1.4 million units on its domestic market and in view of the fact that all of its bikes are imported, the drop in the number of imported bikes seems strange.

After a drop in export of about 50% in 2006, the French bike makers managed to increase their export with 7% in 2007.

When putting all the figures in perspective, which is by adding up production and import numbers and distracting the export figure; then the 2007 domestic delivery (or sales) figure stands at about 2.7 million units. Comparing this to the 3.5 million 2007 sales figure quoted by Tous à Vélo, means that about 800,000 bikes must be in the ‘pipeline’ or are stocked in France. 

More youngsters on their bike?

That something is definitely changing in France is perhaps best illustrated by 2007 sales by category. City bike sales increased by a remarkable 35.5%! Of course the total of about a quarter of a million city bikes is not yet huge, but the trend is there. Is this the result of the numerous public bike rental projects? The indications are there that they indeed are a great incentive for bike sales.

Another remarkable development in the sales by category is what happened last year with non-MTB Child Bikes. That segment grew 14.7% to about 670,000 units. Are more youngsters in France getting on their bike to school? Or is that conclusion premature?

Sales in other segments remained quite stable, apart from MTBs. Adding up 26" and 20-24" MTB sales in 2006 and 2007, an 8% drop becomes apparent.

Electric bikes do not yet have their own sales category. However, Tous à Vélo says in its report on 2007 bike sales that nearly 10,000 e-Bikes were bought last year; a big increase from the 6,000 in 2006 and 3,900 in 2005.

Bike Sales per Category (in units)

 
2005
2006
2007
26” MTB
1,300,000
1,102,100
1,047,200
20” – 24” MTB
732,400
711,000
620,100
Child Bikes (non-MTB)
587,000
582,600
668,300
Trekking, Hybrids
498,000
499,500
493,900
Road Race
186,000
184,800
199,400
City Bikes
173,000
171,600
232,500
BMX, Bi-Cross
148,500
133,600
122,700
Toy bikes
133,300
142,500
143,500

Bike Sales per Distribution Channel 2007 (in %, units and in million euro)

 
In units
In value
Sport Department Stores
50% (1,765,900)
38% (€ 331.9)
Supermarkets
26.5% (927,300)
10% (€ 88.4)
Independent Dealers
11.5% (410,600)
24% (€ 212.1)
Retail Org. Member Dealers
12% (423,800)
28%(€ 243.9)

Source: Tous à Vélo, Conseil des Professions du Cycle

 

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