Mexico 2011: Flooded with Cheap Imports

Sales & Trends

While cycling enjoys a growing popularity in Mexico among children and adults – for recreational, fitness and social use, the local bicycle industry is facing its worst downturn in history. The Mexican bicycle industry is heavily suffering from low-priced foreign imports. The total value of the Mexican bicycle market was estimated at 1,200 million pesos (€57.8 million) for 2010.

Mexico 2011: Flooded with Cheap Imports

The total value of the Mexican bicycle market was estimated at 1,200 million pesos (€57.8 million) for 2010. This year the Mexican cycling industry, as represented by the National Association of Bicycle Producers (ANAFABI) will manufacture an estimated 1,918,020 units. In 2006 the output of the Mexican industry was still producing 2,843,433 units annually.

“The national production is very small related to the size of our country and the 110 million inhabitant,” said Fernando Mejia, president of the National Association of Bicycle Producers (ANAFABI) recently in an interview. “The buyers’ potential in our country is very big, but nevertheless our future is very uncertain.”

Mexico’s main concern is the influx of extremely cheap bicycles made in China especially for kids and young people. According to ANAFABI some 75,000 bicycles were imported last year at a price of €2.41 including freight. Not surprisingly, the Mexican bicycle industry is struggling to deal with these amazingly cheap imports. After 2005, when the national production peaked at 3 million units, the output of the Mexican started to decline to its current level of 1.9 million units.

“This trend will even intensity with the elimination of the existing anti dumping duties on China made bicycle at the end of this year,” said Mejia. “The tendency will be a further decline, especially for the kids’ bikes and the national Mexican industry will stagnate. We expect that our profitability will vanish and investments will drop to a low level. For many manufacturers the only option will be to close their production facility in Mexico and start importing from China.”

The ANAFABI requested a new investigation to prolong the anti-dumping duty. Export performance by Mexican bicycle manufacturers is very limited. ANAFABI statistics show that the exports account for only 1% of total production, marketed mainly in Central and South America. In 2010 some 20,000 units were sold abroad.

The import of low priced Chinese made bicycles is not the only threat for the Mexican bicycle industry. The growing popularity of cycling in the past years has not gone unnoticed by global A-brands. For example Trek Bicycle recently opened its own office in Mexico. The opening of Trek’s latest subsidiary in Mexico is a clear indication of the growing importance of the Latin and South American bicycle market for the US bicycle brands. The decision of Trek to change from distribution only to a fully owned subsidiary in Mexico allows the company to take full advantage of its global retail support infrastructure.

“Mexican retailers can now communicate directly with their supplier while Trek can implement their key success factor to one of the most important markets in the western hemisphere,” said Trek Director of International Sales Maureen Muldoon. “The Mexican market offers great opportunity for Trek and our retailers. Being able to work directly with our retail partners opens up a whole range of new possibilities and we look forward to helping our Mexican retailers directly.”

Another well known brand that recently entered the Mexican high end market is Ridley. The Belgium manufacturer of mainly road race bicycles increased its presence in Mexico by appointing Biciclo as its representative. Ridley also entered other South American markets via new distributors such as Express Imports in Brazil, Trizone in Panama, and Ciclozona in Venezuela.

Slow Entrance of E-bikes

Although the market is still small there is a future for e-bikes in Mexico. The number of suppliers is still limited by a few players. One of them is Zilent, a company mainly dedicated to selling electric cars. Nevertheless they expect the e-bike market to grow and for that reason they put e-bikes in their product portfolio. Their complete range contains 2 e-bikes and 3 e-scooters.

The price for e-bikes and e-scooters put on the market by Zilent ranges between €245 and €585. According to Zilent they sold approximately 2,000 two wheelers last year. Surprisingly enough, the early adopter of e-bikes are not elder people, but young people looking for a faster alternative to commute to work, as well as companies like pizza and sushi delivery services.

Bike Rental in Mexico City

EcoBici is the transportation system in Mexico City serving the districts of Cuauhtémoc, Juárez, Roma Norte, Hippodrome Countess and Countess. Some 1,114 bicycles can be rented at the 86 stations throughout the city. These “Cicloestación” are situated within 300 meters of each other and are located at strategic points.

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