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<b>Finland 2009: </b>High Expectations Turn into 10% Sales Drop

Sales & Trends

All signs indicated record sales levels for the Finnish bike trade in early 2009. Shops were packed with bicycles and enthusiasm was high in March, only to change when demand turned out to be dull during the sales season. It left many questions to be answered….

<b>Finland 2009: </b>High Expectations Turn into 10% Sales Drop

TAMPERE, Finland – All signs indicated record sales levels for the Finnish bike trade in early 2009. Shops were packed with bicycles and enthusiasm was high in March, only to change when demand turned out to be dull during the sales season. It left many questions to be answered….

Preparations for the 2009 season happened in quite confusing times – just as the economic crisis started. Still, pre-orders in September 2008 were high, but the troubled world economy in October made retailers cautious and orders were smaller than expected. Despite that, the main suppliers ended 2008 with a relatively good order level and preparations for the season continued as before.

Bicycle market in Finland 2006 – 2009

 
2006
2007
2008
2009
Production
50,000
30,000
20,000
15,000
Import
272,335
314,072
317,000
330,000
Export
11,081
17,970
10,000
6,500
Domestic deliveries
315,000
310,000
305,000
320,000

Source: Custom statistics and suppliers

Reasons

Due to the short season in Finland, retailers usually make 80% of their annual sales in just three months. At the end of May retailers were 20% down on their regular sales level. More confusing – no one could explain the reason for such low sales. The weather had been reasonably good and it was expected consumers would have been especially interested in cycling due to the bad economy.

Also, because the Finnish bike market has been quite stable over the years, the 20% drop was regarded as a real disaster. After May the retailers and some big suppliers started promotion campaigns and offered discounts on their bikes. This had a positive effect. From June through August bike suppliers and retailers succeeded in selling their overstock. At the end of August trade stood about 10% below January – August 2008.

Sales by category

Surprisingly, in the January – August 2009 period, City and Commuting bikes were the weak link in the business. As they have always been favoured by the Finnish cyclists and have formed the foundation for the bike business in this Northern European country; it left the trade with questions, especially as retailers were suddenly able to sell more expensive Trekking bikes, as well as MTBs and road racers. This helped compensate for the drop in City bike sales.

Also surprising – despite the economic crisis the average value of bikes imported increased by 14.4 % in the January – July 2009 period. These more expensive bikes sold well. Enthusiastic consumers were ready to renew their old bikes and shopped for shining new models with extra features. Another issue raising questions within the Finnish bike trade is the fact sales of e-Bikes haven’t yet really started at all. The main dealer brands, Helkama and Tunturi, have good models available, but demand is lacking.

New start, new hope

To close preorders for the 2010 season and promote the sale of 2010 models to Finnish dealers, the main suppliers have been on the road for four to six weeks since September. Those suppliers say order levels are fluctuating from one dealer to the next.

Total preorder levels are so far a few percent down compared to last year. As darkness now sets in, and the winter snow returns to Finland, the actual sales of bikes comes to a halt. It is reported that stocks in bikes and bike products at dealers are at reasonable levels. This, combined with a reasonable level of preorders, is reason to remain hopeful for 2010.

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