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Cervélo ramps down Toronto assembly

Published May 31, 2012

TORONTO, CANADA (BRAIN) Thursday May 31 2012 5:16 PM MT—Cervélo has shifted nearly all its bike assembly for North America from its Toronto-area headquarters to third-party factories in Asia.

The move is part of the ongoing integration of Cervélo into the Pon Bicycle Group, a division of Pon Holdings, the Dutch trading company that acquired Cervélo earlier this year. Pon also owns Derby Cycle—Germany’s largest bicycle manufacturer and parent of Focus, Kalkhoff, Rixe, Univega and license holder for Raleigh in parts of Europe—and Gazelle Bicycles. Cervélo and Focus USA announced Thursday that the two brands would combine sales forces.

Instead of importing Asian-made frames and components from around the world to Toronto for assembly, Cervélo will enlist its Asian factories to handle the entire process, then ship completes to a warehouse in Ohio for distribution to its 300 or so North American retailers.

The streamlined process should shave two to four weeks off delivery through time saved in transit and by eliminating the assembly step in Canada, said Brian Dillman, Cervélo’s executive vice president.

Cervélo began testing the system in March to make sure it would be glitch-free by the time the high summer selling season rolled around, and response was positive, Dillman said.

“There’s a higher level of inventory on hand, better visibility of sales and inventory, faster response times and shorter lead times between when orders are placed and goods received,” Dillman said. For instance, a Southern California retailer who orders a bike in stock should get it in three days instead of the previous five- to seven-day time frame.

Dillman said Cervélo would not lay off any of its Toronto staff, as assembly workers are being reassigned to other duties. The assembly facility will remain operational in some capacity, mostly to put together bikes for demo fleets or sponsored athletes, he said. Cervélo’s Project California R&D testing and prototype facility will remain open. The small Southern California carbon fiber factory produces the R5ca road frame.

For the European market, Cervélo’s bikes starting with the 2013 model year will be assembled in northern Germany at sister company Derby Cycle, which runs a large-scale assembly and paint plant in Cloppenburg for all its brands. Previously, Cervélo’s Europe-bound bikes were assembled in Asia. At the same time, Derby Cycle will outsource assembly of Focus bikes to Asia for delivery to all markets outside Europe, which should shorten lead times to the U.S. by three to four weeks.

Nicole Formosa

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