TAICHUNG, Taiwan (BRAIN)—The global economy appears to be shrugging off the so-called Great Recession as consumers start spending and orders for new goods start rising. But Tony Lo, Giant’s chief executive officer, expects the U.S. market will take more time to recover. (Click on headline for PDF newsletter.)
Asia, on the other hand, is rebounding quickly. “Last in, first out,” said Lo, referring to Asia’s late entry into the recession and its much quicker recovery. “But the overall (global) economy is getting better,” he added Wednesday during a wide-ranging interview at Giant’s factory in Tachia, a 35-minute drive from downtown Taichung.
Lo is one of the few chief executives in the industry to acknowledge that his company has excess inventory in the U.S. But the situation is much different in Europe.
“Overall, I think Europe is doing fine,” he said, thanks to an entrenched cycling culture, robust electric bike sales, and a greater awareness of environmental issues. And, he added, Europe wasn’t hit as hard as the U.S. economy when financial markets flirted with collapse late last year.
The 62-year-old executive said he thinks 2010 sales will be flat at best, with high-end unit sales absorbing the brunt of an ongoing consumer pullback. “The U.S. is a very mature market, while in Asia many of the developing countries are offering new opportunities,” he said.
In the United States, Giant is actively trimming its retail base. From nearly 2,000 dealers at its peak, Giant now has 1,200, and Lo would like to see it continue dropping to 1,000.
“This way we can build a more secure dealer network and better serve and support them. A thousand dealers would cover the U.S. very nicely,” he said.
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