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<b>Europe 2007:</b> Not a bad year for the bike

Sales & Trends

BRUSSELS, Belgium – Last year may well have been a turning point for the international bicycle business. The world economy was not yet subject to the type of crisis we are going through today. Still, purchasing power was already under pressure as a result of soaring petrol and energy prices. And, although winter was mild, summer was extremely wet in most of Europe, whilst fall did not offer particularly good cycling weather either. Despite all that, 2007 was not a bad year for the bike. In most countries, both production and import as well as sales progressed.

<b>Europe 2007:</b> Not a bad year for the bike

BRUSSELS, Belgium – Last year may well have been a turning point for the international bicycle business. The world economy was not yet subject to the type of crisis we are going through today. Still, purchasing power was already under pressure as a result of soaring petrol and energy prices.

And, although winter was mild, summer was extremely wet in most of Europe, whilst fall did not offer particularly good cycling weather either. Despite all that, 2007 was not a bad year for the bike. In most countries, both production and import as well as sales progressed.

The five year sales trend shows a remarkable double digit growth. Since 2003 bike sales increased 11.5% to close to 19 million units in the ‘old’ EU-15.

According to Eurostat (the statistical office of the European Community) the European import from countries outside the EU increased with more than 8%. In Eurostat tables this is referred to as ‘extra EU imports’. Average value stagnated at € 80.53. In the top ten there were a few remarkable developments.

‘Extra’ Import

Thailand more than doubled its export to Europe up to almost 1.5 million and promptly took over second position from China. Quite remarkably, the average value of Thai export also rose with more than 50% to € 74.07. Thailand has taken over a large part of the Vietnamese production for the UK. Last year, Thailand sold almost 900,000 bikes there.

At the same time, Vietnam has completely disappeared from the top ten. Whereas production peaked in 2004 at 1.85 million units, export in 2007 did not even reach 30,000 units anymore. Cambodia has also taken advantage of the effects of anti-dumping duties against its neighbour. Last year, the country sold almost 370,000 bicycles in Europe. All in all, this was almost 15% less than in 2006.

Another remarkable jump in the top ten was the Tunisian one: import into Europe made a big leap (+218%). This was among other things the result of the Chinese, Italian, Tunisian joint venture MUI becoming fully operational. Consequently, Tunisia is now in 7th position.

Taiwan remains the unbeaten leader of the import ranking. Last year, imports rounded the cape of 3 million. Average value hardly changed: +1.1% to € 131.33 per unit. That is rather peculiar because Taiwanese manufacturers focus mainly on the middle and high end of the market. At the same time, rumours that Chinese bicycles are being shipped through Taiwan persist. The stagnation of average value combined with the strong volume increase seems to corroborate the rumours. With that, imports from China dropped with almost 2.3%. The higher average value € 30.60 (+6.4%) is probably linked to the increase of the prices of raw material.

Intra EU import

Eurostat calls the import between EU member states ‘intra EU imports’. The number of bikes that crossed borders between the 27 member states remained more or less at the 2006 level. That runs counter to the trend because in the past years intra EU imports increased considerably, whilst extra EU imports decreased. In 2006, extra EU imports had only just a majority share of 51.6%. In 2007, this share has grown again to 55% and + 45% for intra EU imports.

The stagnation of intra EU imports must be put in perspective however. The decrease should be fully charged to the ‘old’ member states. Apart from Estonia and Bulgaria, all new member states have sold more bicycles to their fellow member states last year.

Bulgaria has become a member of the European Union in 2007. The decline of its export may well be partly due to the fact that the country stopped forwarding non-EU bicycles in transit. The average value of the intra EU export of the new member states has risen considerably except for Hungarian bicycles. With that, Czech bicycles have reached a remarkably high average value: € 190.23.

Germany is without any doubt the best customer of the bicycle manufacturers in the new member states. Lithuania and Hungary sell almost their entire export to the country. Of course, this is related to German companies having set up production facilities in the new member states such as Panther Werke in Lithuania and Hercules/Winora in Hungary.

Poland also sells to France and the UK, Bulgaria to Greece, Austria, Belgium and the UK and the Czech Republic to Belgium, Austria and remarkably enough to its ‘ex’ Slovakia.

Production

Unfortunately, for lack of statistics and reliable estimates, it is impossible even to make an educated guess about bicycle production for the entire European Union with its current 27 member states. However, we do have results for the 15 ‘old’ member states, which include the largest bike markets. In 2007 production dropped with 3.3% or some 300,000 bikes to slightly less than 9.3 million units. Bicycle production in the ‘old’ EU has dropped for five consecutive years now.

Since 2003 the number of bikes produced decreased with 1.1 million or 10.8%. Taking into account that some major manufacturers, such as Kynast, Sprick, Biria went bankrupt or ceased production, that decrease is still limited. But that is also due to the fact that new bike makers, like Mifa,  appeared while others like Derby Cycle Werke managed to grow.

After a 22% setback in 2006, French bicycle production decreased with another 5% in 2007. This is all to do with supermarkets loosing interest in bike sales. As a result, the Accell Group has completely abandoned production for supermarkets. Their main supplier of entry-level bikes, Mercier, was integrated into Lapierre which is also part of Accell. Lapierre only distributes through dealers. As of next year, French production is bound to go up again, since by that time the Decathlon bike factory in Lille will be up and running.

German production decreased with 3.6% to 2.4 million. According to ZIV, this was the result of a number of German manufacturers disappearing, i.e. Biria, Enik and Vaterland. Export however increased with almost 20% to 575,000 units.

In Italy production grew with 4.2% to 2.52 million, the first increase since 2005. There was also a turn in export, with the first plus in 3 years’ time. The increase was just under 10% for a total of 1,358 million. The production growth was mainly thanks to the category of children’s bikes and of city and sports bikes. The latter category attained a production share of 20% compared with 18% in 2006. Mountain bikes are loosing out. Their production share shrunk to 25% compared with 33.5% in 2006

The Portuguese production decreased for the first time in 6 years. However, the preliminary results for this year show that the 2007 number was just a temporary hiccup.

According to the RAI, Dutch bicycle production has gone up with 13.8% to 1.1 million bikes. This increase was prompted by a growth in sales. Finally, in Poland production shrunk by almost 11% to 785,000. This was mainly caused by a considerable drop in sales of low-end bikes, whereas sales of high-end models reached a record.

Sales

As is the case for production, it is very hard to present a reliable estimate of the total number of bikes sold in the EU-27. But again there is the result for the ‘old’ EU with 15 member states. These figures are compiled from sales statistics published by industry associations like ZIV (Germany), Tous à Vélo  (France), BAGB (UK), ANCMA (Italy), RAI (Netherlands), SEEB (Spain), FFÖ (Austria), Agoria (Belgium), FAPIC (Denmark), TIF (Finland) Danske Cykelhandlere (Denmark).

In 2007 close to 19 million bikes were sold in Europe’s major markets, which belong to the ‘old’ EU-15. Bike sales in 2007 rose with close to 400,000 units or 2.1%. The five year trend shows a remarkable double digit growth. Since 2003 bike sales increased with 11.5% or about 2 million units.

In quite a few member states, bicycle sales developed positively last year. In Austria an increase occurred for the first time since 2000: +14.2%. Portugal and the Czech Republic also progressed with 10% and more. Italian sales gained 2.4%, German 3% and, important, sales in the leading cycling country Holland gained 5.8%.

In France sales remained stable, whilst Poland lost 16%. How many bicycles were sold in the UK last year is unknown, but the Bike Europe correspondent there assesses the situation as very positively. He reported: “a rain blasted year that should have seen bike sales plummet to record lows, but, miraculously, sales seemed to be steady, an indication that the burgeoning British bicycle culture is no flash in the pan. Much of the steadiness was due to the rapid acceleration of city cycling in the UK.”

The development of city cycling is indeed a trend that seems to be cropping up in several countries. A growing number of people start using a bike for commuting, shopping, for bringing their children to school… They are fed up with traffic jams and swap to a faster means of transport that is quite a bit cheaper than a car and that also contributes to their health. More and more governments are supporting this choice by implementing cycling policies.

More intensive use

City cycling implies intensive cycle usage. As a result, you would expect people to choose for quality rather than for price. This may well explain why supermarkets are the first distribution channel to loose out. That happened last year in France and in Poland. At the same time, in France, repairs and sales of components and accessories grew, which seems to confirm a more intensive use of the bicycles.

In Austria there was also a clear shift towards high-value branded bicycles. Overall sales value grew by 16.8%. What’s more, the mobility segments of city (+16%) and trekking bikes (+19%) showed an impressive increase. They were also the two winning categories in Germany where together they reached a share of 55%.

In the new member states, bicycle sales are benefiting from the expanding purchasing power of the population. In Slovenia, clearly more branded bikes were sold and average value progressed a lot. In Poland, more and more A-brands are becoming available. Giant, Wheeler or Cannondale were already present. Last year, Gazelle, Sparta and Hercules joined them. Bicycle sales in Poland diminished considerable in 2007, but, as mentioned, that was entirely at the expense of supermarkets.

The link between the development of city cycling and growing bicycle sales is also apparent in the Czech Republic. Sales increased by 11.4%. The majority of those bikes are sold in Prague where 30% of the purchasing power of the whole country is concentrated. In the Czech capital cycling is strongly encouraged among other things by building infrastructure.

What about Holland?

There is a fair chance that the trends which are going on in Holland today, will appear in the rest of the European Union in a few years’ time. The growth of the Dutch bicycle market in 2007 is to a large extent attributed to the electric bicycle. Its market share has doubled up to 6% and, more importantly the e-Bike has a 20% share in turnover. As a matter of fact, the average price of electric bikes sold in Holland is € 1,800. This in turn pushed the average price of new bicycles sold in 2007 up to € 603. The average value of bicycles sold by independent bike dealers only was € 709. The success of the e-Bike is put down to a rising need for new means of comfortable and individual transport.

If city cycling is indeed the driving force behind booming bicycle sales in Europe, then the future looks bright. There is an enormous potential out there of people who can still switch from the car to the bicycle. The governments have only just started taking measures to support cycling. Compared with the car, the bicycle will always remain cheap, especially if governments impose more taxes, excise duties and other charges in an attempt to restrict car usage. That makes bicycle sales more or less immune to the economic crisis. And last but not least, if people cycle for economic reasons, they will be a lot less inclined to set their bicycle aside at the drop of a hat. In other words, the ‘Velorution’ seems to be imminent.

 For other EU statistics go to:

  • EU-25: Bicycle Imports 2007
  • EU-14: Bicycle Consumption 2007
  • EU-14: Bicycle Production 2007
  • EU: Top Ten Suppliers in 2007
  • 2007 not a bad year for the bike in Europe
  • EU-15: Bicycle Consumption 2006
  • EU-15: Bicycle Production 2006
  • The Bike Market in Europe in 2006
  • Top Ten EU Suppliers in 2006
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