Major Dutch Bike Maker Stops Model Year Cycle
APELDOORN, The Netherlands – Whether this initiative will get lots of follower’s remains to be seen. Fact is however that major players in the bicycle sector are already for some time pushing for a change in the ordering cycle. Sparta – the biggest in e-bikes in Europe and one of the subsidiaries of Accell Group NV – announced yesterday that the company stops with launching new collections of the next ModelYear every fall and to quit dealer- winterordering at house shows.
Sparta’s decision to stop the ModelYear cycle means that dealers can order bikes the while year round without having to place a winterorder every September at the bike makers’ house show. But the Dutch bike maker is making one exception for its new strategy. It does not go for e-bikes.
Sparta’s ION models exempted
According to marketing manager Marco Kalden, Sparta’s ION and other electric bike models are exempted because of higher risks involved with the more expensive e-bikes and because of the longer development processes for these models.
“For years already dealers are struggling with the fact that they have to commit themselves to orders for the whole next year that they place in September,” continues Kalden. “When business is like this year with good sales in March followed by record lows in April and May due to a rainy spring and cold early summer, dealers are pressured. They have committed themselves to orders with bikes that reach their stores, but are not sold through to consumers.”
Market conditions and consumer demands
“We regard it as vital for dealers to be able to react promptly to market conditions and consumer demands. When a particular model or color isn’t performing as expected dealers have to be able to switch to more preferred models and not be hindered by a year-order or planning. ” The way Sparta wants its dealers to handle the new ordering situation is suggested by Marco Kalden as: “We advise our dealers to display one showroom model in their stores and to keep one extra bike on stock. That must be sufficient.”
Less winter orders
The new strategy means that Sparta has to be able to immediately react to changing market demands. “We keep a constant eye on the market. If a color isn’t selling as expected, it will be discontinued.” Despite that, the fact remains that the new strategy brings higher risks to Sparta. Kalden says on that: “The number of winterorders will be a lot less. We therefore appeal to our dealers and others that want to become a Sparta dealer because of the new ordering strategy; join us with this new market approach. At the upcoming dealershows we as always will introduce our new collection. But it will be the last time that we completely renew the whole collection.”
No more discount sales
The Dutch dealer association BOVAG has repeatedly put pressure on bike manufacturers and importers to stop the current ordering cycle with ModelYear collections. Sparta’s marketing manager Kalden: “BOVAG has repeatedly stated that we must stop the discount sales mentality. The same was requested by the Sparta dealer panels. As a bicycle manufacturer we do not benefit from pushing bikes into the dealer channel. Keeping a close eye on which models and colors are preferred by consumers and act on such market signals, is the way for us to go forward.”
Dealer association welcomes initiative
It goes without saying that the Dutch dealer association is welcoming the Sparta initiative. BOVAG manager Niels Hansen: “Last year, they put in a first step by not having the ModelYear indication on their catalog. Now Sparta is taking the next big step. The industry is already for years talking about it and we are glad that Sparta is now taking the initiative and we realize that they are taking a risk with it.”
Call to dealers
Already a few years ago Giant did about the same in the Benelux markets as Sparta is doing now. Giant abolished model years and started phased introduction of models. At first this was not very successful as dealers ordered their bikes at other brands. That’s why the BOVAG manager is now calling upon dealers: “Do not let this opportunity pass. This step by Sparta is of real importance. It brings you as a dealer a better yield, improved inventory position and more liquidity. This is a big step towards a healthier bike sector. Embrace this initiative, it offers plenty of opportunities for cycling retailing. If this is successful, it is likely that other brands will follow.”