<b>EU-2009:</b> European Bike Market Takes a Blow
Despite optimism that the bike business wouldnt be badly hurt by the economic crisis, the European cycling industry still felt its effects in 2009. With purchasing power under pressure and widespread uncertainty making
AMSTERDAM, the Netherlands – Despite optimism that the bike business wouldn’t be badly hurt by the economic crisis, the European cycling industry still felt its effects in 2009.
With purchasing power under pressure and widespread uncertainty making forecasts almost impossible, 2009 was one of the most difficult years of the last decade. At least the weather was on our side. It sparked an early start to the season, but in the end even sunny, warm weather couldn’t stop sales in Europe from dropping well below the 20 million units mark.
From production to consumption. From imports to exports. All indicators regarding the bike business in Europe last year are showing decreases. However, there are some exceptions. Some bike markets among the 27 European Union member states are even showing slight increases, in particular in imports. And looking closer at these imports; especially those coming from countries outside the EU; what’s striking is the fact prices for imported bikes went up last year. And by more than just a bit!
In 2009, close to 1.3 million fewer bikes were sold throughout the 27 EU member states compared to 2008. Total sales stood at 19.1 million units (click here for complete table), according to per country Market Reports this trade journal published earlier this year. Bike Europe received the data for these reports from its network of correspondents throughout Europe, as well as from industry associations. In 2008, total bike sales (also referred to as ‘consumption’ or domestic deliveries) was calculated at 20,396,000 units. 2009 ended with 19,100,000 units sold – a 6.3% drop.
Europe’s main bike markets (Germany, the UK, France, Italy and the Netherlands) all showed a similar pattern last year. Together they make up approximately 70% of total bike sales. In 2008, sales for these five most important markets stood at 14.2 million units. 2009 saw a 4.4% drop, to 13.6 million units.
Of the five main markets, Germany was hit the hardest unit-wise. Sales dropped 10.9%. However, according to the German industry association, the total turnover involved with the 3.85 million bikes delivered to the various retail channels increased by 7%. According to this association (ZIV) €1.8 billion was the 2009 turnover figure, up from €1.7 billion a year earlier. The average value per delivered bike also increased in 2009 – from € 387 to € 446, an increase of 15.3%.
The same holds true for the Netherlands where sales statistics for 2009 indicate a minor decline of 4.2% in units sold, from 1,337,000 bicycles in 2008, to 1,281,000 in 2009. According to the industry and dealer associations RAI Vereniging and BOVAG, which collect the data along with the Dutch statistics agency and GfK Panel Services Benelux, the value of the bicycle market keeps on rising. It had a value of € 950 million in 2009, an increase of 2.6% compared with 2008.
Right from the start of the year it became clear the low-end sector would suffer in 2009. Companies operating in the private label sector making bikes to order reported a 30% decrease in their order-intake for 2009. This was revealed by a survey this trade journal held at the beginning of the year. Reports at the end of January and beginning of February told of low-end makers cutting their production by 50% during the first months of the year.
The hard hits the low-end sector had to endure meant that in Germany distributors of entry level bicycles, supermarkets, DIY stores, and department chains, saw their share in total sales drop to 26%. Dealers however profited. They saw their share grow by 5% to an impressive 68% total. More quality awareness and the growing number of expensive e-Bikes sold were, according to the German industry association ZIV, the reasons behind this positive development in the German bike sector for 2009. However, another reason also contributed to the increase in average value per delivered bike, as well as the total bike sales turnover figure per country. That reason was the fact prices for imported bikes were more or less going through the roof last year (more on this in the ‘Imports’ section below).
In Italy, based on the country’s industry association ANCMA data, deliveries of complete bikes to the various distribution channels reached 1,927,600 units in 2009, a significant 7.1% increase on the 2008 total of 1,800,000 bicycles. With the help of the government incentives 2009 turned out to be a revival year for the bike sector in Italy!
In Eastern Europe such a revival didn’t take place. From Poland to the Baltic States and from Hungary and Romania to Bulgaria; all the former Soviet bloc countries reported dramatic sales drops. Bike Europe’s correspondents in these countries were nearly unanimous in their estimates on the size of these drops – as much as 20%. A closer look at the 2008 – 2009 bike imports for the countries in Eastern Europe show that they also dropped about 20% last year.
Close to 12 million bicycles were produced by the 27 EU member states last year. To be precise; 11,833,000 (click here for complete table). That’s significantly less compared to a year earlier, when 12,804,000 units rolled off the assembly lines. The difference (971,000 units) represents 7.6% fewer bikes produced in 2009, compared to 2008. When looking at the production figures in detail it becomes clear bike production slowed down in the Eastern and Southern regions of Europe in particular.
In the West, in Europe’s five main markets mentioned earlier, a total of 6,960,000 bikes were produced last year. In 2008 that number stood at 7,017,000. The 0.8% difference stands in stark contrast to the 7.6% drop which represents the decrease in production for the whole of Europe.
So, the conclusion is that in the Western part of Europe, in the biggest bike markets, production merely levelled off last year. However, it should be noted here that the French industry association Tous à Velo, unlike earlier years, didn’t publish any production figures for 2009. This may have to do with the fact Cycleurope France had to cut its production during the first months of 2009. From the start of the year to mid March, Cycleurope’s Romilly, France facility only operated for two out of every four weeks, thus reducing production by 50%. As you can see in this table (click here), French bike production for 2009 is listed at 900,000 units. This is an estimated number.
This trade journal estimated the production numbers for Portugal, Spain and the Eastern European countries, except for Poland and the Czech Republic. The Economy Ministries of Poland and the Czech Republic supplied detailed production numbers. In Portugal, where in 2008 Europe’s biggest bike facility was opened, production took a hard hit. That facility is operated by a company called RTE – the parent company of Portuguese bike producer Decanor. It holds strong ties with Decathlon, the giant sporting goods retailer that buys the biggest part of the RTE production. It was to produce one million bikes in 2009.
Decathlon caused the more than 20% drop in production for the country. At the end of November 2008 the company which is Europe’s biggest bicycle seller directed its component and bike suppliers to stop shipments, because forecasts in sales were not met by actual demand. At that time it was said that Decathlon budgeted to sell 2.4 million bikes in 2008, but only sold 1.9 million. Subsequently, stock levels for bikes at Decathlon’s logistics centres throughout Europe were high. Of course this had repercussions on 2009 production. In addition to Decathlon the biggest bike seller in the UK, Halfords, also directed its suppliers to stop production during the first months of 2009.
On the production figures for the Eastern European countries; Bike Europe based its estimates on reports from its correspondents in the various countries. They indicated that next to bike sales, production also dropped on average by 20%.
In line with consumption and production the import of bicycles into the European Union’s 27 member states also dropped significantly last year (click here for complete table). Close to 1.5 million fewer bikes were imported, compared to the total for 2008. In 2009, according to Eurostat data, 16,192,311 bicycles were imported by the 27 member states, from countries outside the EU (referred to as ‘extra’ import, with imports from one member state to another member state called ‘intra’ imports). In 2008 that number stood at 17,684,875 units. The difference of 1.492 million represents an 8.4% drop.
Bike imports from countries outside the EU saw bigger drops compared to what member states shipped to each other. From outside Europe (mostly the Far East) close to 1 million fewer bikes were imported last year compared to 2008; a drop of 9.9%. Bicycles imported from one EU member state to another EU only dropped by 6.8%, approximately 560,000 units.
The fact that, compared to the ‘intra’ import, the ‘extra’, or the import from outside Europe, dropped harder could be attributed to the double digit price increases the Far East suppliers charged their customers (click here for complete table). By far the biggest bike supplier to Europe, Taiwan, saw its exports to the continent drop by 14.6% in 2009. However, the Eurostat data shows the drop in units was amply compensated by a 21.8% price increase! The same holds true with Europe’s other main bike-supplying countries. Against the drop in export volume stood a double digit price increase.
Eyeing the developments at Europe’s five main markets, the import total (intra + extra) for Germany, the UK, France, Italy and the Netherlands showed only a 4% drop. Imports into the Netherlands even registered a big increase in 2009, compared to a year earlier. Over 20%! However, as this increase is caused by more units coming from countries outside Europe; the extra bikes that arrived in Rotterdam harbour were transported to other countries.
Interesting to note is that imports into the United Kingdom rose in 2009; by about 4%. Is this a confirmation on the alleged growth of this market, in particular caused by Brits buying more city bikes for urban mobility? If that’s the case and the same happens in other European countries then there’s much to be hoped for.