I want to ride my bicycle, I want to ride my bike, I want to ride it where I like
Queen
Rock legends Queen were recording in Montreux (for tax reasons!) when they saw the passing Tour de France. This inspired ‘Bicycle race’ which was released in 1978 reaching No 11 in the UK singles chart. Queen even staged a bicycle race around Wimbeldon stadium to promote the track.
Since then Cycling has grown into a colossal business.
In 2021 the US imported over $2.15b of bikes. According to the WSJ, bike sales are 60% higher than before the pandemic.
The story is similar in several other big markets. Japan imported $703m of bikes in 2021, up 9%, France’s imports were up 16% and Australia’s by over 25%.
Late last month, German bike brand Canyon conducted a financing round valuing the business at €750m. Interestingly, US Basketball star LeBron James was in on the act. Canyon’s sales have grown an average of 21% over the last 6 years reaching €475m in 2021.
Earlier this year, Taiwan’s Giant group boasted revenues of US$2.85b up 17% on 2020. Taiwan is the second largest exporter of bikes after mainland China.
Although many cycle brands, think Bianchi, Lapierre and Orbea, are European in design, many of their components are not. Wheel hubs typically come from China or Japan, whilst tyres and inner tubes from SE Asia.
Japan’s Shimano is a key supplier of many components but only has plants in China, Singapore & Malaysia.
Escalating freight costs have been one challenge, longer lead times due to Covid shutdowns another. More recently executives have fretted over rising energy costs.
There are signs the once global supply chain for bikes is being restructured. Some companies have decided to move production closer to home.
Cannondale which up until recently was made in Taiwan and Vietnam has opened a new European assembly plant in the Netherlands. Whilst Cycles Mercier has recently shifted manufacturing back to France after sourcing from SE Asia.