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Different Industry Forecasts from Taipei

Published March 14, 2008

TAIPEI, Taiwan (BRAIN)—The outlook for the bicycle industry may depend on which side of the Atlantic one sits, two magazine publishers told Taiwan’s industry elite Thursday.

In Europe, corporate-sponsored rental bike schemes combined with massive government investment in cycling, such as London’s pledge to spend nearly $1 billion over the next decade, could ignite a cycling boom, said Jack Oortwijn, editor-in-chief of Bike Europe.

“With some of the biggest cities in the world promoting rental schemes, I believe city, trekking and folding bikes will explode,” Oortwijn told members of the A-Team.

But industry prospects in the U.S., clouded by a weak economy that may have already slid into recession, is less bright. Even soaring gas prices won’t necessarily boost bicycle sales, said Marc Sani (pictured), publisher of Bicycle Retailer.

“Getting Americans pried out of their automobiles to ride a bike to work or ride a bike to the grocery store—I don’t think that’s going to happen in any great numbers,” Sani said.

Oortwijn and Sani spoke at the annual meeting of the A-Team, an organization of Taiwan’s top bicycle, parts and accessories manufacturers. The A-Team’s focus on efficient manufacturing processes has helped reverse a slide in Taiwan bicycle manufacturing. Although island manufacturers are not producing anywhere near the volume they were 10 years ago, the value of the average Taiwan-made bikes has steadily climbed to more than $222 last year.

Oortwijn pointed to the Paris bike rental program, underwritten by a large outdoor advertising company, which has made more than 20,000 bicycles available at 1,451 rental stations throughout the City of Light. Each bike is rented an average of 10 times a day, Oortwijn said. Rome and London have followed suit, he said.

London’s mayor Ken Livingstone’s pledge to spend nearly $1 billion on cycling infrastructure “is the biggest investment in cycling in London’s history,” Oortwijn said. “This is a revolution—bikes instead of cars.”

In the United States, Sani said, the sliding stock market combined with low consumer confidence may dampen sales in the heart of the bicycle market.

Bicycle manufacturers in Taiwan and China also should keep a close eye on U.S. politics, Sani added. If Democrats succeed in capturing the White House and expanding their majorities in Congress, they are likely to subject imports of all products to greater scrutiny, especially from China.

A potential bright spot for the industry is the proliferation of industry acquisitions, such as Dorel’s purchase of Cannondale, Shimano’s surprise acquisition of Pearl Izumi and Fox Racing Shox's sale to a private equity firm.

“We have seen an amazing amount of money change hands in a relatively short period of time,” Sani said.

—Doug McClellan

Topics associated with this article: Taipei Cycle Show

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