In the post-epidemic era, the demand for bicycles continues to rise, and bicycle orders have been placed until 2023. Although the bicycle industry faces problems such as a shortage of materials and containers, the demand remains high. In particular, the demand for electric-assisted bicycles and high-end bicycle products is particularly high, and the supply-side capacity expansion cannot keep up with the demand, and manufacturers delay orders, which further promotes the popularity of the bicycle industry. Although there are shortages of materials and cabinets, the bicycle factory will still have a bumper harvest in 2021. Huge, Merida, and other bicycle-related manufacturers have handed over a record high revenue for three consecutive years. It is expected that the growth rate of profit will exceed the growth rate of revenue. , this year and 2022 will continue to achieve good results. After shipping becomes normal in the future, the assembly plant will speed up the supply, thereby driving the demand for parts, and looking at the bicycle market prospects optimistically.
According to statistics, the global bicycle market will reach 59.3 billion US dollars in 2021, and it is predicted that it will continue to increase at a compound growth rate of 8.2% in the next eight years.
In 2021, the overall export value of Taiwan's bicycles (including complete vehicles, electric bicycles, and components) will be US$5.147 billion, an increase of 39% over the previous year. The export volume of finished vehicles reached 1.99 million, an annual increase of nearly 17%, the export value was 1.314 billion US dollars, an annual increase of 19.7%, and the average unit price was 661.5 US dollars. The electric bicycle market also grew last year. The export volume and export values were 987,000 units and 1.314 billion U.S. dollars, respectively, an increase of nearly 30% and 33.21% over the previous year. The average unit price was 1,331.4 U.S. dollars, a slight increase over the previous year. The export volume of parts and components was 75.57 million kilograms, an increase of 41.86% over 2020, and the export value reached US$2.519 billion, an annual increase of 56.71%.
Taiwan's electric bicycles exported to NAFTA and the European Union accounted for 83.3% of the total export volume. The top five exporting countries were the Netherlands, the United States, Germany, the United Kingdom, and Canada. In 2021, the overall demand will increase by nearly 30% compared with 2020, from 760,000 to 987,000, with an average unit price of US$1,331.4, and the export value will increase from US$987 million to US$1.314 billion. The survey shows that the demand for electric bicycles in the United States, Germany, the United Kingdom, and France continues to rise, driving the growth of Taiwan's bicycle exports. Among them, the export volume to the United Kingdom and Germany has more than doubled, reaching 1.5 times and more than doubled, respectively. And French exports also increased by 61.88% and 48.28%.
The Bicycle Industry is Booming, but There is a Shortage of Raw Materials
Taiwan's top bicycle brands have an overwhelming market share in the global market, and although production declined in early 2020, it has rebounded rapidly. According to the Taiwan Bicycle Association, Taiwan's bicycle exports in 2021 will increase by nearly 20% compared with 2020. At the same time, the export volume of bicycle components also increased by 57% compared with the previous year.
Many companies are also joining the ranks of reducing carbon emissions. Conventional and e-bikes for carrying goods are increasingly common in dense urban areas, reducing the use of vans and trucks. In addition, more and more companies are encouraging employees to cycle to work, introducing bike-sharing programs, offering rentals, subsidies, and even buying bikes directly for employees. Consumer demand for bicycles has skyrocketed, a double-edged sword for Taiwanese manufacturers. Many manufacturers struggle to digest orders that have been lined up for several quarters. The situation is further complicated by continued disruptions to global supply chains as demand far exceeds supply. Shortages of raw materials such as aluminum, steel, and nickel in 2021 will lead to price spikes, the costs of which will inevitably be passed on to consumers.
Even shortages of raw materials that are not directly related to bicycle manufacturing and sales have an impact on the efficiency and cost of related businesses. Since the end of 2020, the cost of pulp imported from China has risen by more than 50%, and its shortage has seriously affected the packaging and transportation of Taiwan's bicycle industry. Millions of dollars worth of goods cannot be shipped because there are no cartons and no packaging. Like other industries that rely on exports, Taiwan's bicycle industry has had to find ways to solve the shortage of containers in the past year. Even if a container can be found, securing a spot on the ship is difficult.
After the epidemic began, bicycle manufacturers in Taiwan and around the world had to adjust their prices. The average price of a brand new bike in the U.S. is $346, up 28 percent from 2020 and 54 percent higher than in 2019.
Supply chain shocks are also limiting manufacturers from expanding capacity to meet demand. Despite efforts to find ways to adjust the supply chain to increase production capacity, when the supply chain changes, automakers must ensure that products pass rigorous and time-consuming testing.
Before the epidemic, bicycle manufacturers had to complete the vehicle design as early as possible (usually about half a year to a year), to have enough time to mass-produce customized components. Today, after the impact of the epidemic, the delivery time of these parts may be as long as two years or more. The process of fulfilling orders before the pandemic was relatively simple, as long as customer needs were passed on to suppliers, and parts were then obtained a year later to start production. Manufacturers now even start ordering new bikes two years before they're on the market, before customers see the bikes, and aren't even sure if customers like the new bikes.
Bicycle Market Attitudes and Changes
With the reorganization of the supply chain and the trend of intelligence, Taiwan's bicycle industry has received more attention than in the past. Under the epidemic, the global trend of rapid growth in bicycle demand is due to changes in consumer behavior. Another reason for the rise in demand for bicycles is that more and more people are paying more attention to climate change and other environmental issues. This has also led governments to rethink transport policies in recent years, especially in urban areas. The European Commission announced the "Sustainable and Smart Mobility Strategy" in December 2020, hoping to change the way people and goods move within the EU and reduce vehicle-related carbon emissions by 90% by 2050. In addition to urban planning to curb vehicle movement in urban areas, more emphasis is placed on encouraging the public to use bicycles, as well as electric bicycles, electric scooters, and other electric vehicles. Technological and design innovations in e-bikes will significantly impact urban planning, prioritizing low-carbon transport. He also called on the government to plan a better bicycle infrastructure to help people and businesses use electric bicycles in their daily lives.
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