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<b>The Netherlands 2008: </b>E-Bikes: Money Machine for Bike Sector

Sales & Trends

AMSTERDAM, the Netherlands The bicycle is so solidly embedded in the Dutch society that it looks as if the economic downturn is hardly affecting turnover in bicycles in the Netherlands. The two leading bicycle manufacturers are obviously sure about the future of their business for 2009.

<b>The Netherlands 2008: </b>E-Bikes: Money Machine for Bike Sector

AMSTERDAM, the Netherlands – The bicycle is so solidly embedded in the Dutch society that it looks as if the economic downturn is hardly affecting turnover in bicycles in the Netherlands. The two leading bicycle manufacturers are obviously sure about the future of their business for 2009.

Number of new bikes sold in the Netherlands (x 1,000 units) 

2000 2001 2002 2003 2004 2005 2006 2007 2008
1,517 1,365 1,324 1,219 1,25 1,239 1,323 1,4 1,388

Accell CEO René Takens clearly stated at the presentation of the group’s 2008 financial results that he expects a further increase in turnover and results in 2009. Although he did not want to elaborate on the growth figures, Takens made explicitly clear that all indicators are positive for Accell Group. Last March competitor Gazelle even signed a letter of intent with the local authorities for the construction of a brand new factory. This is a clear indication that the firmly rooted Dutch brand is opting for local production and not for outsourcing to Asia.

Just as in the two previous years, the e-Bike was the driving force for the Dutch bike market in 2008. In the Market Report Netherlands published one year ago this trade journal indicated that the growth of the e-Bike sales had not yet come to an end. The 2008 figures are now substantiating this claim.

According to the Dutch industry organizations RAI and BOVAG, the number of e-Bikes sold in 2008 has again risen beyond all expectations. Before the start of the season the forecast was 120,000 units. In the end Dutch consumers bought nearly 140,000 e-Bikes. And they paid for their electric bikes an average retail price of approximately € 1,900!

Although the Dutch are willing to pay a high average price of € 688 for their regular bikes; the introduction of the e-Bike has given the overall market a huge value push. In 2006 some 40,000 e-Bikes were sold in the Netherlands, representing a 3% market share in units and 10% in revenue. Within three years the market has tripled in units and revenues. In 2008 e-Bikes represented one third of the total revenue from the sale of new bikes – a figure most countries can only dream of.

Accell Group is leading the e-Bike segment of the total bike market with its brands Sparta, Batavus and Koga Miyata. But the competition is rising. Just about every bike supplier in the Netherlands has at least one e-Bike model in their range including Accell’s biggest competitor Gazelle. The Gazelle Chamonix Innergy e-Bike was proclaimed ‘Dutch Bike of the Year 2009’.

E-Bikes are not only sold to older people anymore. A growing number of schoolchildren as well as commuters have found the e-Bike an easy mean of transportation. With the expanding target group the e-Bike market is expected to grow further in the years to come. Of course the e-Bike is affecting the number of ‘normal’ bikes sold. City Bikes sales dropped; this main segment of the Dutch bike market went down from a 60% share in total sales in 2007 to 56% in 2008. However, the added value of e-Bikes and with that also the margins for manufacturers and for the re-sellers of e-Bikes is much higher than in any other segment.

IBD market share jumped

The e-Bike has become the money machine of the Dutch bicycle makers as well as IBDs. A secondary result of the growth in e-Bike sales is the rising market share of dealers. Although the Dutch consumer has always been relatively loyal to dealers, the e-Bike is the new crowd puller for bike shops. This has all to do with the fact that this product needs more instruction, professional information and above all service in the long term than a standard bike. Especially for after sales service, dealers which are trained and equipped to handle the e-Bike are needed. Not surprisingly the IBDs market share in units jumped from 74% in 2007 to 81% in 2008. A huge plus!

Despite the e-Bike trend total bike sales in the Netherlands dropped slightly last year; by less than 1%. In 2008 the Dutch bought 1,388,000 bicycles for an average price of € 688. The market situation of the standard bikes is not as good as it looks. If we deduct the effect of the e-Bike on the market the average value of the bicycles sold in the Netherlands would go up by just 5.4% related to 2007 and only 0,7% related to 2006. The conclusion is that the Dutch bicycle sector needs the e-Bike; IBDs who do not sell electric bicycles are having a hard time.

The ratio between local production and imported bikes has remained more or less the same. According to industry organizations RAI and BOVAG the Dutch industry locally produced and sold some 972,000 units last year while 416,000 imported bikes have been distributed on the local market. According to the dealer organization BOVAG, sales in the fourth quarter of 2008 met forecasts while consumer spending in other retail sectors was already declining during this period due to the financial crisis.

The Internet as a distribution channel seems to have reached its limits in Holland as far as bicycles are concerned. The market share of online sales has been stable at 5% for the past three years.

Digital Co-operation

The Dutch bicycle sector is closely involved in a national project to digitalize the ordering and distribution flow. In 2007 RAI and BOVAG initiated a digitalization program. Since last year both associations are participating in a government subsidized program to improve digital co-operation. The aim of this program is to reduce the number of mistakes, shorten lead times, improve the anticipation of market developments, provide better service and get a better grip on money flows.

Next to the digitalization program the national government has been introducing new policies to stimulate the use of bicycles. The Ministry of Transport has announced the launch of a new program to improve the capacity and quality of the bicycle infrastructure, road safety, information and education about cycling.

lthough cycling is an important means of transportation in the Netherlands, the Dutch Government wants to stimulate the usage of bicycles further due to its positive contribution on health as well urban traffic congestion. It is not clear whether new incentives and tax reforms will contribute to more bicycle sales. The suggestion to include the e-Bike in the existing tax facilities in order to stimulate the use of e-Bikes for commuter traffic has not yet been decided on.

New bike sales in price ranges/market share (in %)

 

Euro 2000 2001 2002 2003 2004 2005 2006 2007 2008
0 – 300 27% 28% 22% 34% 32% 31% 30% 31% 27%
301 – 499 17% 18% 21% 18% 15% 20% 20% 17% 17%
500 – 699 27% 18% 21% 16% 16% 13% 19% 13% 15%
700 – 899 14% 23% 20% 22% 26% 25% 20% 25% 25%
> 900 5% 9% 8% 10% 12% 11% 11% 14% 16%
Unknown 10% 4% 7%            

New bike sales by category (in %)

  2002 2003 2004 2005 2006 2007 2008
Dutch City bike 56% 57% 52% 54% 59% 60% 56%
Hybrid bike 16% 15% 18% 17% 15% 10% 13%
MTB 6% 6% 6% 5% 4% 3% 3%
Juvenile bike 18% 17% 17% 17% 15% 17% 14%
Electric bike     2% 2% 3% 6% 10%
Rest 4% 5% 5% 4% 4% 4% 4%

Where bikes are bought

  1999 2004 2005 2006 2007 2008
IBD’s 85% 78% 77% 78% 74% 81%
Alternative sellers 13% 22% 23% 22% 26% 14%
Internet     3% 5% 6% 5%

Source: BOVAG, RAI

Download: Bike Statistics in the Netherlands 2009-2010
(in Dutch & English. Please note file size 1.4 Mb)

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