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Taiwan bicycle exports paint a mixed picture of the industry's global growth

Published May 29, 2018

TAIPEI, Taiwan (BRAIN) — Taiwanese bicycle exports for the first four months of the year offer a mixed picture on the state of the industry — while e-bike exports posted healthy growth, exports of conventional bicycles continued to decline.

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As for e-bikes, exports hit 82,000 units from January through April, up 34.4 percent year over year. The overall export value was $113 million, up 55.5 percent; the average per unit value was $1,378.

But for conventional bikes — road, transit and mountain — exports fell 11.8 percent to 740,000 units. On the upside, the overall value of those exports increased 14.2 percent to $435 million. That boosted the average unit value 29.4 percent to $588, a record.

Taiwan's Ministry of Finance released the data at a press briefing last week in Taipei.

The decline in conventional units reverberates throughout the industry — fewer wheelsets, tires, chains, saddles and other key components are sold to the world's bicycle brands. While an upswing in e-bike sales is welcome news, Taiwan's industry continues to struggle through what amounts to a mini-depression.
 In meetings with industry executives while visiting various factories in Taichung and Tainan last week, all acknowledged that business is difficult, margins are under pressure, and some orders have slowed.

Further complicating the industry's woes has been a global fascination with bike share, particularly in China. Michael Tseng, chairman of the Taiwan Bicycle Association, said at the news conference that skyrocketing growth in Chinese bike share had sparked a "depression" in the Asian market.

"That's been greatly influenced by the shared bike economy in China over the past two years," said Tseng, who is also president of Merida Industry. More than a dozen Asian countries have adopted various bike share programs driven primarily by Chinese companies Mofo and Ofo, as well as a host of copycats.

Walter Yeh, president and CEO of the Taiwan External Trade Development Council (TAITRA), agreed with Tseng's assessment. "Bike share has had an impact on Taiwan companies," he said, noting a sharp decline in exports of parts and accessories particularly into the Chinese market.

Many of Taiwan's manufacturers are geared to produce high-value components — the opposite of what generally goes onto bicycles slated for bike share companies.

Giant and Merida, both publicly traded on the Taiwan Stock Exchange, have factories in China and have been hard-hit financially by bike share. Both have closed hundreds of retail outlets there and in other markets, crimping sales of their branded bikes and accessories. And both continue to face financial challenges in the Chinese market for the foreseeable future.

But Tseng and Yeh said they are keeping a sharp eye on recent moves in Europe over potential dumping duties that could be imposed on Chinese-made e-bikes.

In what has been a fast-moving trade case, the EU is requiring that Chinese e-bike imports be registered, a step toward possible imposition of punitive duties. "The threat of e-bike dumping (duties) could help Taiwan," Tseng said.

Developed countries remain Taiwan's major market, according to Taiwan's Ministry of Finance. For example, the U.S. market alone accounted for 22.1 percent of sales. Those were primarily high-end bicycles with an average unit price of $829. In the Netherlands, the average unit price was $810; France, $883; and a staggering $2,662 in Luxembourg, Europe's richest country with an average per capita income of more than $109,000.

On the other hand, two key European Union markets, Germany and the United Kingdom, posted average unit prices below Taiwan's global average —$389 and $488, respectively. Still, those averages are up double digits year over year, the Finance Ministry noted.

 

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