<b>The Netherlands 2005:</b> An Island Under Siege?

MAARSSEN, the Netherlands – Holland is a bike country; it’s renowned all over the world for that. The Dutch are born on bikes, of that a lot of foreigners are sure. And in a way it’s true. Riding a bike comes natural. Sales of training devices are impressively low, as Dutch fathers prefer to run
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MAARSSEN, the Netherlands – Holland is a bike country; it’s renowned all over the world for that. The Dutch are born on bikes, of that a lot of foreigners are sure. And in a way it’s true. Riding a bike comes natural. Sales of training devices are impressively low, as Dutch fathers prefer to run after their children to teach them the art of balance, knowing full well that genetic inheritance will kick in before they are fully exhausted…

But with that involvement with bikes comes a downside: if bikes are so much part of life, who bothers about a bike? It’s like noticing sliced bread: the only time you do ponder about it, is when it’s not there anymore – the same is true for bicycles.

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

1999
2000
2001
2002
2003
2004
2005
1,445
1,517
1,365
1,324
1,219
1,250
1,239

(Source: RAI/BOVAG/GfK Marketing Services)

Sale of new bikes divided in price ranges/market share in %

Euro
1999
2000
2001
2002
2003
2004
2005
-300
31
27
28
22
34
32
31
301/499
20
17
18
21
18
15
20
500/699
25
27
18
21
16
16
13
700/899
10
14
23
20
22
26
25
>900
4
5
9
9
10
12
11
Unknown
10
10
4
7

The Dutch market has been compared to an island – an island in the rest of the European market. An island in the sense that Dutch bikes prices are the highest in the world, that Dutch bike dealers almost had a monopoly on bike sales, and that the Dutch bought mainly their own produce. For a large part, this is still the case, but the island is under siege  from the growing number of ‘alternative outlets’ to use a euphemism.

Dutch bike shops still sell 77% of all bikes, which is only 1% less than last year. But the ‘others’ are gaining ground – every percent lost by the traditional IBD is won by them. And ‘them’ is a mix of DIY stores, department stores (sports or general) and Internet sellers. Together they now sell 23% of all new bikes purchased in Holland. Still miles removed from their success in the countries surrounding the ‘island’, but still.

Prices

The Dutch like their bikes, and bikes may cost. A Dutch treat in bicycles is indeed that: a very nice, high quality bike that will last for years – and on average may cost f 579! no sign of scrimping there. And as most bikes are still sold by the IBD, the average sales price is even higher there: 679 is spent for that traditional Dutch bike. But when looking at the prices in detail, a development is noticeable that was not there some years ago.

Cheaper bikes (read: budget versions by brand names or no-name offers) are popular – but not as popular as just two years ago. In 2003, 34% of all bikes was priced below l 300 – now 31%. In contrast with the growing success of alternative sales channels? I don’t think so, as this number is exactly the same as in 1999, before the inline towards these channels even began. 2003 was a freak peak, as 2002 showed a low of 22% – most probable explanation is that an anti-dumping on gear hubs established in 2002, filled up the pipeline, which was released over the 2003 season. Also back to the 1999 level, are bikes between l 301 and k 499, the former lower middle class bikes (prices have been on the rise constantly). Here percentages have fluctuated over the past 5 years, with their low in 2004, at 15%.

Middle class bikes are losing

But back to where we started, 1999, at 20% of the market, they have clawed back their own share of the market in 2005. The big losers in prices are the real middle class bikes: a dramatic drop from once 27% (2000) market share to just a meager 13% now – it’s either affordable or expensive in the low countries. It’s strange that the lower middle class is taking the blow – one would expect those bikes to be the ideal solution: above the cheapo level, so decent quality, and not too much frills, so not over priced – as if designed for the thrifty Dutch? But no, the segment from h 700 to g 899 is the one that takes the biscuit. Here one can expect all the new designs in technology, as well as in styling and design – and that seems to be worth that saving.

This particular segment has grown quite dramatically from just 10% in 1999, to 25% (a quarter of all bikes sold!) in 2005. The governmental scheme, where bikes up to this value can be ‘given’ by the employer, has certainly helped here. But there are Dutch that love their bikes even more: the premium segment of bikes above g 900 has grown over the same period (1999 – 2005) from 4% to 11%! And considering the margin for both dealer and manufacturer, 11% of those bikes are the moneymakers! Just compare with the average sales price at a budget supplier: a measly g 122. One must sell an awful lot of bikes to make a decent profit – and as bikes tend to take time to sell (even the cheap ones) and awful lot of work as well.

What Bikes?

Despite all the trends of the past years, the Dutch still like their sit-up-and-beg style bikes. More gears, yes and more technology (dyno hubs, suspension forks etc) but basically the bikes that have been built here for years. The riding style – upright – must be born out of defiance: no where else is the country as flat as in Holland, but crouching low against a head-wind? No, Sir! The Dutch bicyclist sits proudly upright (the adjustable stem invariably at the straightest possible angle) battling it out with the elements. This type of bike still takes 54% of the market. This has been down to 43% in 2000, when MTB’s where the fashion.

But the ‘tourer’ came back, to knock the knobbly tyre fraternity to just 5% of the market. Once some 15% (1999) now just 5% of the total number of bikes sold in Holland, which is 1.239 million. The real top-years were 1999 and 2000, when that same MTB craze fuelled sales to 1.445 and even 1.517 million items. But it is safe to say that around the 1.2 maybe 1.3 million is a realistic figure for a country with 15 million inhabitants (overall) and some 18 million usable bikes kicking around…

Hybrid bikes (any sporty, with lots of gears and narrower tires) take 17% of the market, which has been more or less stable for the last four years. The same is true for children’s bicycles, with 18% market share, which fluctuates no more than 1 to 2% over the years. Electric bikes are a new addition, they take 3% of the market, coming in from zero. And indeed, sales of these kind of bikes has ‘softly exploded’ in the wake of the success of the Sparta ION. From 22,000 in 2004 to 34,000 in 2005 – and with a population that is ageing, there is lots of future scope. From the figures, the trend in road and folding bikes is hard to deduct: sales of other bikes’ (which should include these) have actually dropped from 5 to 4% – which is strange. Where viable, the have probably been tallied in the plus g 900 category.

Future

It seems the island is indeed under siege – but not by overwhelming forces. It’s more of a gnawing at the legs of the system – a couple of percent here and there. For now at least the fortress that is the Dutch IBD is scarred, but still intact. And it does not look as if that is going to change soon – as one Internet seller confided: ‘when delivery takes longer than a couple of days, 90% cancels the order’. It seems the personal touch is still in demand, and an economy in repair can only stimulate that. One thing is for sure, the (fine) food sector is already noticing a turn-around in consumer behavior.

Where bikes are bought in Holland?

2004
2005
Compare 1999
IDB
78%
77%
85%
Alternative sellers
22%
23%
15%

(Source: RAI/BOVAG/GfK Marketing Services)

Sale of new bikes by category

1999
2000
2001
2002
2003
2004
2005
Dutch City bike
55%
43%
49%
56%
57%
52%
54%
Hybrid bike
9%
29%
19%
16%
15%
17%
17%
MTB
15%
10%
11%
6%
6%
6%
5%
Juvenile bike
16%
15%
17%
18%
17%
18%
17%
Electric bike
2%
3%
Rest
5%
3%
4%
4%
5%
5%
4%

(Source: RAI/BOVAG/GfK Marketing Services)

Dutch PTW Market: Standstill for Most, Success for Some

The Dutch PTW market is almost as special as the bicycle market. Trends in design tend to catch on late, so late in some cases that they are gone in other countries before the Dutch catch on! Fr example the all-roads bikes: years after the surrounding countries have picked up on their use as all-rounders, the Dutch are finally seeing that. This makes for a difficult market for importers, as they are confronted with model line-ups that are out of tune with their market, which is too small to demand special series.

All in all there are 600,000 licensed motorcycles in Holland, which on average do 4,810 kilometres a year. Not exactly a mobility market, but rather a fun-driven one. The motorcycle is not seen yet as a traffic- beater, and the government steers clear of that solution. Ideas like allowing motorcycles to use bus-lanes (Scotland) or riding a 125cc with a car driving license, which could alleviate congestion are just not accepted. Mopeds, which could also be part of big city traffic, are almost the exclusive domain of the young. Adults choosing to get about on one, are a dying breed. This leaves PTW’s in the fun sector, which accounts for between 16 and 17,000 units being sold annually, a figure that changes little over the years. Add to that between 35 and 40,000 used bikes that change hands, and it will be clear that the Dutch market is a limited one.

The big engines sell best – again a reflection of the fun market – 44% of all bikes sold are above 1000cc displacement. Although 25% are still tourers, all roads are gaining a bit of ground, with a 16% market share. Super Sports account for 20% of sales, while ‘naked’ street bikes close in at 15%. Customs bikes have had their day, with sales dwindling, now at 10% .There are currently some 400 motorcycle dealers in Holland. Most are of equal size (less that 10 staff, usually even less than 5). To make ends meet, they should be selling between 40 and 60 new bikes a year, plus double that in used ones. The past year shows that about half of them sell (far) above that number, and about half do not reach it at all: so the market is divided into success and unlucky…

The Dutch moped market has been in decline for years, the bad image that (some) young riders have given the little bikes being one reason. The growing demand for creature comforts another: where 30 years ago, you could not wait for the day when you could ride a moped, now youngsters seem to be prepared to wait for their car license (obviously forgetting about running costs…). The same is true for motorcycles, where riders are mostly above 40 – whatever happened?

Top selling moped brands

Peugeot
5,415
Yamaha
4,258
Piaggio
3,707
Tomos
1,642
Kymco
1,622
Aprilia
1,611
Derby
934
TGB
849
Hyosung
243
Rest
1,866
Total
22,147

Top 10 selling motorbikes by brand

Honda
4,045
Yamaha
3,690
Suzuki
3,292
BMW
1,621
Kawasaki
1,162
Harley Davidson
1,127
Ducati
624
Aprilia
435
KTM
378
Triumph
233
Totaal
17,566

(Source: RAI/BOVAG/GfK Marketing Services)