Argentina’s Bike Industry Hampered by Import Duties
BUENOS AIRES, Argentina – To rebound Argentina’s domestic manufacturing capacity the national government implemented new laws to restrict or even block the import of many goods while requiring foreign companies to partner with local manufacturers.
For many industries the new laws turned out positive, but the local bicycle industry was hit hard. Like in so many other countries, Argentina’s local bicycle assembly heavily depends on foreign parts for much of its production.
Thanks to the new law many products are hard to find, pushing up prices if the specific parts become available. As a result manufacturers are now stuck with partially assembled bikes, missing a pedal, seat or handlebars which cannot be sold. At the same time bicycle shops run out of stock.
2011 record year
In 2011 a record number of 1.8 million bicycles were sold in Argentina. For 2012 the industry organizations had predicted sales would grow further to more than 2 million bikes, producing an estimated 390 million euro in revenue.
According to the latest statistics of the Argentine Bicycle Chamber of Commerce and Industry an estimated 1.6 million bicycles were sold in 2012. And that number would have been lower without the Buenos Aires city program that offered loans for bike purchases. The city of Buenos Aires has tried to make it a bicycle-friendly city, but that has been stymied by the protectionist import ban of the national government.
Call off plans
To keep the business going bicycle factories cancel growth strategies and innovative initiatives. They try to rely on the production of bicycles that require the least possible number of imported parts. Others had to call off plans to expand into producing high-end specialty and mountain bikes. Instead, the factory is making parts such as seat posts specifically hit by the import restrictions and assemble simpler bikes.