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Urban cycling grows in South America despite trade restrictions

Published October 11, 2013

BUENOS AIRES, Argentina (BRAIN) — Urban cycling is showing strong signs of growth throughout this South American country prompting Shimano to once again sponsor Shimano Fest Argentina.

Nicolás Muszkat, Shimano’s sales manager for Latin America (except Brazil), said interest among consumers and governments in cycling is on the rise. “Urban cycling is the booming category right now,” Muszkat told Bicycle Retailer.

“We are seeing the big cities investing a lot in bike lanes, and local OEMs are focusing most of their production on beach cruisers with urban features.” Folding bikes and retro-style steel frame “English” models are also selling fast.

Despite the upsurge in interest in cycling, Argentina has seen unit sales plummet from about 1.25 million units annually to about 750,000—a 40 percent decline. Muszkat blamed the drop on import duties that have essentially locked out foreign competitors.

“Basically, imported bikes have been banned and only locally assembled bikes are being sold. But even local OEMs are suffering from these restrictions,” he said.

An unstable currency exchange rate, coupled with import restrictions, has taken a toll on the high-end market. Most sales are driven by Internet mail order, mostly from the U.S., and through neighboring countries like Chile and Uruguay, he said.

Mass market sales comprise only about 15 percent of the market with an average price of about $250 U.S. Almost 85 percent of all sales are made through IBDs with an average price of $500.

Muszkat noted that bike-share programs are also on the rise throughout Latin America, particularly in Brazil, Uruguay and Colombia. “And we’re happy to say that most of them are using Nexus three-speed hubs,” he quipped.

The two-day consumer expo, Oct. 19-20, will be held in Buenos Aires, Argentina’s capitol city and the second largest metropolitan area in South America. Shimano Fest, now in its second year, is the biggest consumer event in the region.

More than 30 companies will showcase their products and services. A criterium with UCI teams from South America will compete on one of the city’s main avenues and more than 5,000 recreational riders are expected to turnout for a 10-kilometer tour through the city’s Rosedal Park.

Other events include classes on riding for young and old, test rides, a Shimano PRO challenge for mechanics, cyclocross exhibition and Red Bull’s show team will perform.

Despite a focus on urban cycling, mountain biking remains a part of the market and Muszkat predicts that 650b-wheeled bikes will be easily accepted due to the average height of Latin Americans. As for 29ers, the market has been slow to embrace them, he added.

Shimano has two offices in Latin America—Argentina and Brazil. The company employs about 60 people and focuses primarily on sales support for OEs as well as sales and technical training support for IBDs.

 

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