Chapter 1 Introduction
1.3 Framework
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facilities like bike parking. Electric bicycle market in China is booming. China’s local governments are regulating safety standards of electric bicycle equipments and its public bike using policy, such as bike sharing system (BSS).
4. To investigate market and government policies for bicycle industry in China and provide a closer look into its competiveness of the bicycle industry in China. Since economic reforms introducing capitalist market principles began in 1978, China has been the second largest economy after United States. China could be a behemothic competitor as well as a hungry consumer in the global economic.
1.3 Framework
This paper is composed by 5 chapters. Chapter1 gives general introduction of the research.
Chapter 2 discusses the bicycle industry in the developed countries, such as, France, Germany, Italy, Japan and then Taiwan and compares the production and sales of bicycles in France, Germany, Italy, Japan and Taiwan. Germany, France, Italy, and Japan are in top 10 GDP of the world and are also big oil and gas consumers. Policy makers of these countries face critical choices in reconciling energy, environmental and economic objectives so the related CO2 emission reduction policies of these countries will be discussed. Chapter 3 is dedicated to bicycle industry’s development in China. Due to early planned economic central government dominated the hiring of employees, production and sales of bicycles. Thus bicycle industry development would be highly related to the network which is induced by the cooperation between complete bike factories, its parts suppliers and local government. Such supplier chains are interconnected and have its geographical development history.
The bicycle cluster in the Southern, Central and Northern regions will be analyzed. The research for the industry cluster in Southern, Central and Northern China can exhibit how bicycle industry in China transferred its planned market economic industry into a market economic.
Chapter 4 is to see the difference of bicycle industry between China and Taiwan. This part studied the development history in Taiwan and China and what kind of role government plays in the bicycle industry. On top of that the policy of bicycle usage in China is discussed. Bicycles had been been viewed as a transport which caused traffic congestion by Chinese government so the bicycles had been prohibited due to governmental policy. The government policy toward
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bicycle usage affect consumer’s willing of buying bicycles. Till now bicycle usage gains the reverse reaction from the government because of green policy. Chapter 5 presents conclusions and the suggestion for the bicycle development in China.
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C HAPTER Bicycle Industry in the World 2
Around middle of 1960s, world production of cars and bikes was nearly 20 million, but as of 2003 bike production had climbed to over 100 million per year compared with 42 million cars.
In 2004 bicycle production was 105 million units, a 1.5% increase over 2003. In 2010 ratio of the vehicles in operation in the U.S.in 2010 was 1:1.3 among a population of almost 310 million – the highest vehicle-to-person ratio in the world. Italy was second with 1:1.45. France, Japan, and the U.K. followed, all of which were in the 1:1.7 range (Sousanis, 2011).
Regarding to the economic size, according to the World Bank (2011) the US ranked as the first in GDP for 69,983,693 million. China ranked as the second, Japan as the third, Germany the fourth, France the fifth, and Italy the eighth. Since GDP of Germany, France and Italy are in top 10, they are also the top 5 energy consumers in EU27 according to a report, ENER23 (Eurostat, 2011). Germany is the biggest consumer in EU27, followed by France, U.K. and Italy.
According to a report 96% energy consumption of the 13,760 billion passenger-km traveled in 2000 was attributed to the Europe of Fifteen, the U.S., Japan. Passenger transport demand is closely related to household revenue, commuting distance and the distance between home and school or working place. Road transport totally dominates the energy balance in these developed countries. The Europe of fifteen, the U.S., and Japan are the main consumers of oil and consumed the share 75% of the 1.75 Gtoe by world transport (Eurostat, 2011).
This chapter is to analysis bicycle development of the five countries, France, Germany, Italy, Japan and Taiwan from data of production export import domestic sales on varied bicycles and its governmental policy to promote bicycle using.
2.1 Bicycle Industry in France
France has created cycling friendly environment for years. In urban areas was existed 14,000 km of cycling infrastructure. 8,000 km cycle routes and green ways have been built over
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the last 10 years. France found out that per EUR one million investment on bicycle economy creates 10 jobs compared to 2.5 jobs in automobile industry and EUR 500 million from state or local authorities created EUR4.2 billion economic activity, EUR 700 million in tax receipts and 35,000 jobs (Roche, 2010).
2.1.1 Production, Export, and Import of Bicycle
The share of bicycle production in France was 7.65% of EU27. It ranks in fourth after top 1 Italy and top 2 Germany. Production of the bicycle in France in 2011didn’t overpass half of the production in 2000. It was only 47% of the production in 2000. The production in 2007 had reduced 38% from 1,248,000 to 900,000 in 2011. The local production 916,000 in 2010 decreased 1.7% to 900,000 in 2011(Table 2-1). Import of bicycles in France had been decreasing 22% from 250,000 in 2007 to 197,000 in 2011 in comparison to export of bicycles in France which was1,826,000 in 2007, a 16% increase to 2,110,000 in 2008, and dropped 10% to 1,920,000 in 2010 and 13% to 1,894,000 in 2011(Table 2-2).
Table 2-1 Production of Bicycle in France
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Production
(10,000 Sets) 191 153 142 149 173 172 129 125 113 87.9 91.6 90 Source: COLIBI-COLIPED (2012).
Table 2-2 Import and Export of Bicycles in France
2007 2008 2009 2010 2011
Import (10,000 Sets) 25 21.1 18.1 19.9 19.7
Export (10,000 Sets) 182.6 211 191.2 192 189.4
Source: JPBI (2012a) .
2.1.2 Bicycle Domestics Sales
The share of bicycle sales in France was 16% of EU27, and ranked third after top 1 Germany and before top 4 Italy (COLIBI-COLIPED, 2012). The production in 2011 was slightly down 2%, its sales were risen 6% and the value also up 6.5% to EUR846 million compared to sales of 3,031,000 sets with 794 million in 2010 (Table 2-3). Sales quantities of bicycles in 2011
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had gone slightly down 4% than the year 2000, but the turnover of 2011 rose for 29% than that of 2000. The average selling price of bicycle sales in 2011 in France is EUR265, ranking 12th right after 11th-ranked Italy (COLIBI-COLIPED, 2012). The bicycle price, EUR265 in 2011, was 6% higher than the price EUR248 in 2007 (Table 2-4).
Table 2-3 Bicycles Sales in France
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Sales Volume
(10,000 Sets)
334 295 299 353 352 376 347 347 334 313.2 303.1 320 Sales Value
(Million Euro) 654 708 732 857 851 869 794 842 850 819 794 846
Source: Same as Table 2-1.
Table 2-4 Average Selling Price per Cycle in France
2007 2008 2009 2010 2011
Average Price
(Euro/Set) 248 262 261 262 265
Source: Same as Table 2-2.
2.1.3 Sales of Bicycles by Category
In the categories of bicycle as shown in Table 2-5 Mountain Bicycle (MTB) is the most popular in France, and then Kid’s bike. The sales of whole categories of bicycles were up in 2011. Kid’s bike had 9.4% up to 700,300 units in 2011. Bicycle Motocross or BMX is a bicycle for a racing in motocross styles. It comes with a variety of specifications catering to the numerous different BMX events from dirt track racing to the more artistic freestyle competitions.
This is the only item which enjoyed the up-rising sales from 2007 to 2011, except for the year 2010. In 2009 sales on kid’s bikes, trekking bikes, and city bikes were all retreated over 10% in comparison with 2010 except for MTB and BMX.
The bicycle market in France seemed not be effected by electric bicycles’ introduced to the market. Indifferent with Germany and Netherlands’ markets, the sales of sports and city bikes remained strong hold and folding bike was popular and enjoyed higher value in the market (COLIBI-COLIPED, 2012).
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Table 2-5 Sales of Bicycles by Category in France
Unit: 1,000 Sets
Item 2007 2008 2009 2010 2011
Mountain (MTB) 1,047.2 986.6 843.8 831.8 868.0
Mountain (20～24 inches） 620.1 577.5 629.8 588.5 619.8
Kid’s 811.8 791.9 682.0 640.4 700.3
Trekking 493.9 510.3 448.9 412.5 416.7
Road 199.4 187.2 160.9 166.3 175.6
City 232.5 235.6 243.3 275.5 285.6
Motocross 122.7 128.0 123.6 116.3 131.2
Total Domestic Sales 3,527.6 3,417.1 3,132.3 3,031.3 3,197.2 Source: Same as Table 2-2.
2.1.4 Bicycle Planning Policy
France started to promote Velib project on Aug. 2007. Velib is to supplement other methods of public transport and provide free bikes for citizens and tourists. After registering to use the system and paying a small fee, the registrar can borrow a bicycle from any station and return it to any other station. In order to fight against traffic congestion and air-pollution the Paris city council and outdoor advertiser JCDecaux cooperated and created a successful rental system that is regarded as the showcase to get more people biking. The bikers in Paris have increased by 94% during 2000 to 2007 while car traffic has dropped 20%. In 2008 the bike accounts for 2 to 3% of all traffic in Paris (Schaik, 2008).
2.2 Bicycle Industry in Germany
According to a analysis from European Cyclists’ Federation, Germany’s new national cycle master plan can promote annual sales by 260 million Euro by 2020. The report represented an average increase of 2.43 bikes sold per head of population for each percentage increase in people using bicycles as main mode of transport in EU27. It is also shown that a 13 Euro increase in the unit price per bike was accompanied with each percentage increase in bicycle share. This means if Germany market follows the bicycle sharing trend, Germany can expect an additional 800,000 bike sales and an increased price of 53 Euro per bike across the larger market
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of nearly 5 million bikes. France is promoting cycle usage higher and higher in the modal share and modal shift by adopting constructing cycle-friendly environment policies (Mayne, 2012).
2.2.1 Production and Sales of Bicycle
Bicycle production in Germany in 2011 was 2.2 million sets and its share of EU27 was 19.46% ranked after first Italy, 2.3 million unit sharing19.65% of EU27 market. The sales of bicycles in Germany in 2011 were 4.05 million sets, ranked top1, sharing 20% of EU27 market.
The average selling price of bicycle in Germany in 2011 was 495 Euro per unit (Table 2-6), ranked top 2 right after the Netherlands 746 Euro (COLIBI-COLIPED, 2012).
The production in 2011 was 2.28 million sets, 1.78% less than 2.22 million sets in 2010, and 32.7% less than that in 2000. As presented in Table 2-6, the sales of bicycles in 2011 was 4.05 million sets, 1% higher than 4 million sets in 2010, and 21% less than 5.1 million sets in 2000. The sale in value in 2011 was 2,004 million Euro, 8% higher than 1,842 million Euro in 2010. The quantity in 2011 was 21% less than that in 2000, but the value was 13% higher than that in 2000. The same situation happened in 2009 and 2010 in which the production and sales were down but the turnover went up instead (Table 2-6). This may be accounted to the rising price of bicycles. The average price per cycle in Germany in 2009 was 446 Euro, 15% higher than 386 Euro in 2008.
Table 2-6 Bicycle Production and Sales in Germany
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Production
(10,000 Sets) 340 300 305 320 294 271 249 240 242 225 223 229 Sales Volume
(10,000 Sets) 512 470 460 490 470 475 443 460 435 405 401 405 Sales Value
(Million Euro) 1,772 1,697 1,624 1,686 1,603 1,620 1,542 1,688 1,679 1,806 1,842 2,004 Source: Same as Table 2-1.
Table 2-7 Average Selling Price per Cycle in Germany
Unit: Euro
2007 2008 2009 2010 2011
Average Price 368 386 446 460 495
Source: JBPI (2012b).
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2.2.2 Exports and Imports of BicycleNetherlands had been the biggest importer for Germany bicycles. The share of the volume in 2011 was 20% of Germany’s total exports, as displayed in Table 2-8. France imported 15%, to 167,000 units in 2011, Australia 11% to 119,000 units, and Denmark 6%. These five countries accounted over 50% of exports of Germany in 2011. The total imports in 2011 were 1,084,000 units, 47% of total production in Germany in 2011 and it was 6% higher than the exports in 2010. The exports in Germany in 2011 grew 89% within 5 years while the imports into Germany in 2007 grew only 3% within 5 years. As exhibited in Table 2-9, Taiwan has been the number one exporter for Germany bicycles, accounting 12% of imports in 2011. Taiwan’s imports in 2011 were 13% down than that in 2010.
Taiwan’s share of imports was going down within the last three years. Netherlands was catching up and accounted the share of 10% in 2011, and had a big jump in share for 29% in 2008 and 25% in 2009. Thailand’s import reduced 21% from 284,000 in 2010 to 227,000 in 2011. Cambodia’s import increased 23% from 89,000 sets in 2010 to 110,000 sets in 2011.
Table 2-8 Top 10 Countries Importing Bicycles and Parts from Germany
Unit: 1,000 Set
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Table 2-9 Top 10 Countries Exporting Bicycles and Parts to Germany
Unit: 1,000 Sets
Country 2007 2008 2009 2010
2011
Proportion
Taiwan 423 488 404 389 337 12
Netherlands 156 202 253 236 279 10
Poland 348 283 273 254 268 9
Lithuania 266 252 179 148 266 9
Thailand 311 333 363 284 227 8
Belgium 71 51 61 88 138 5
Czech 108 118 111 151 125 4
Romania 97 129 85 142 118 4
Cambodia 56 105 130 89 110 4
Australia 63 76 80 94 93 3
Others 858 881 783 830 883 32
Total 2,757 2,918 2,722 2,705 2,844 100
Source: Same as Table 2-7.
2.2.3 Sales of Bicycle by Category
Trekking in Germany is the most popular item, unlike France, where the MTB is the most popular. The shares of trekking and city bikes were over 50% of total domestic market as shown in Table 2-10. The share of Kids’ bicycles decreased only 1%, from 6% in 2007 to 5% in 2011.
Racing and Fitness bikes were losing their market share as well from 7.5% in 2007 to 5% in 2011. Electric Power Assisted Cycle (EPAC) is the only item which enjoyed the expanding market from 1.5% in 2007 to 8% in 2011.
The transporting bikes, such as Trekking, City and Touring bikes have their steadily increasing market share, which may be attributed to their function different with others. The 2011 bicycle park in Germany has risen by 1 million units to a total 70 million units (COLIBI-COLIPED, 2012).
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Table 2-10 Proportion of Sales of Cycles by Category in Germany
Unit: %
Item 2007 2008 2009 2010 2011
Trekking 32.0 33.0 34.0 35.0 34.0
City 23.0 23.5 24.5 25.0 25.0
Adult 11.0 10.0 9.0 8.0 8.0
Mountain 12.0 12.0 11.0 11.0 10.0
Kids’ 6.0 5.0 4.0 3.5 3.5
Baby 3.0 3.0 3.0 2.5 2.0
Holland and Touring 2.0 2.5 2.5 3.0 3.0
Racing and Fitness 7.5 7.5 7.0 6.0 5.0
Electric Power- Assisted 1.5 2.5 4.0 5.0 8.0
Others 2.0 1.0 1.0 1.0 1.5
Total: 100 100 100 100 100
Source: Same as Table 2-7.
2.2.4 Bicycle Planning Policy
Bicycle sharing systems is a form of bicycle sharing that is available in numerous cities in Europe. The system makes public bicycles accessible to people, with numerous pick-up and drop-off points, available to the general public for short-term uses for free or for a small fee.
Municipal governments and community groups have promoted bicycle sharing systems as part of intermodal transportation by allowing people to shift easily from transit to bicycle and back again. In 1999, the biggest bicycle station in Germany was opened in Münster.
Around seven million EUR were invested in this structure, with a capacity of 3,300 parking spots (Linden, 2011) . These parking spots are set next or near the train station for passengers to make a shift from train to bicycle. Germany has 70 million pieces bicycle park by 2012 (COLIBI-COLIPED, 2012).
2.3 Bicycle Industry in Italy
Derailleurs on bicycles play the function of a heart in a bicycle the same as an engine of cars. Italian Campagnolo is a world-known manufacturer that invented derailleurs, competing with the counterparts, Japanese Shimano, and a Chicago company, SRAM. These three component manufactures dominate the gear transmission system of bicycles in the global
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markets. Italy, as the third largest in EU27, imports less than Germany and France but production is the highest in EU27.
2.3.1 Production and Sales of Bicycle
The production of bicycle in Italy In 2011 was 2,310,000, which topped the first in EU27 (COLIBI-COLIPED, 2012), but the quantity of 2011 was 29% less than that of 2000 as exhibited in Table 2-11. Its sales in 2007 were 1,998,000 sets, 2.83% less than 2,418,000 sets in 2006 but the value went up 27.5% than the sales in 2006. This was induced by high bicycle price in 2007.
According to ANCMA (Table 2-11) the sales price of bicycles in 2007 was in high position EUR 320 but from 2007 the price did not stop its decreasing trend. The price was going down 18% to 260 Euro in 2011.
2.3.2 Exports and Imports of Bicycle
From the data of import, Italy imported the least compared to France and Germany since Italy produced more for its home market (COLIBI-COLIPED, 2012). The export of 2011 was 1,500,000, 11% higher than 1,350,000 of 2010. The highest export volumes was in 2008, 1,550,000 sets, which dropped 16% to 1,290,000 sets in 2009 and increased 5% to1,350,000 sets in 2010. The import in 2008 decreased 11% to 630,000 and increased 1.5% to 640,000 sets in 2010. The import of 2010 increased 16% to 740,000 units in 2011(Table 2-13).
Table 2-11 Production and Sales of Bicycle in Italy
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Production(10,000 sets) 325 265 235 255 260 240 242 252 238 259 249 231 Sales Volume
(10,000 Sets) 172 168 138 142 167 188 194 200 178 193 177 175
SalesValue
(Million Euro) 520 442 302 306 331 360 375 478 516 539 460 455
Source: Same as Table 2-1.
Table 2-12 Average Selling Price per Cycle in Italy
Unit: Euro
2007 2008 2009 2010 2011
Average Price 320 290 280 260 260
Source: JBPI (2012c).
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Table 2-13 Exports and Imports of Bicycle in Italy
Unit: 10,000 sets
2007 2008 2009 2010 2011
Export 136 155 129 135 150
Import 83 70 63 64 74
Source: Same as Table 2-12.
2.3.3 Bicycle Planning Policy
Bologna, in Italy, has a separated bike lane, suitable for the bicycle, this ecological and quiet means of transport. According to the report of Japan Bicycle Usage Promotion Study Group, in 1989 the whole old streets area in Bologna prohibits car entering the area except for the public buses, taxies, private cars of the local shops or hotels from 7:00 to 20:00 per day. This successfully reduced 62% of car-entering rate in the area.
Bicincitta is a wild bicycle sharing system used in Italy. Bicin are two words represented as “Bicycle” and “ in (English)” and Citta is interpreted as “town” (Kobayashi, 2009) Exemplified in a report by Kobayashi (2009), Cueno in Torino was the first town to establish such system, which provides five bicycle stations,70 bicycle stands, 50 bicycles for free. This service is highly welcomed because it avoids traffic congestion in a busy city center while the public transports are inefficient. The system can be used free from 7:00 to 21:00 under the guarantee of the already registered users. The latest statistics displayed that Bicincitta has more than 2660 bicycle posts and the pass-owners has reached to over 14,768 members.
2.4 Bicycle Industry in Japan
In 2004 Bicycle Association (Japan) had set up safety standards, bicycle Association Approved (BAA), combining with safety standards of Germany and France to offer the consumers safety warranty. There were 39 companies applied for the recognition and Bicycle Association (Japan) had approved more than 280 models of bicycles and issued 75 hundred thousand certifications (Shi et al., 2005). Local production increased for the last decade, but this didn’t include the production of electric power assisted cycle, which accounted 32% of total national production in 2010.
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2.4.1 Production, Export, Import, and Domestic Sales of Bicycle
The production of bicycles in Japan had been facing the severe competition from imports from China and multi-national bicycle companies which moved the production line to China, appreciating Japanese yen and lifted customs duties on bicycles imports for the last three decades.
According to Japan Bicycle Promotion Institute (JBPI), Japanese production of bicycle in 1973reached the peak, 9,410,000 and dropped down insistently to 1,060,000 of the year 2010 (Table 2-14). Japan was world top 4 bicycle producer before 2007 (COLIBI-COLIPED, 2012).
The production 1,060,000 sets in 2010 still went down 7% compared with 1,140,000 sets in 200.
From 2007 to 2010, the production of electric power assisted cycle grew fastest, from 248,000 sets, 21.8% share of total production in2007 to 336,000 sets, 32% share of total production in 2010 (JBPI, 2012f).
As a third biggest bicycle exporter according to Bicycle Market Update (BMU) (2009), in 2006 Japan had a big increase, 780,000 sets, 139% higher in comparison with the year 2000 (Table 2-15). In 2007 the export of Japanese bicycle, 2,100,000 sets has transcended the domestic production quantities, 84% higher compared with the production, 1,140,000 sets in 2007.
Table 2-14 Statistic Data of Bicycle in Japan
Unit: 10,000 Sets 1950 1960 1970 1980 1990 1995 2000 2006 2007 2008 2009 2010 Production 98 329 453 708 797 658 468 134 114 110 105 106
Export 16 36 107 113 23 10 56 134 210 228 221 239
Import 0 0 0 0 67 327 623 934 960 903 862 840
Sales 82 293 346 595 841 975 1,091 1,067 1,074 1,013 967 946 Source: JBPI (2011a).
The export in 2010 went 13.8% higher than the export in 2007. According to the report of JBPI in 2010, this increase was due to export of second bicycles to Asian countries and Africa.
Ghana is the biggest importer of Japanese bicycles, the share of which reached 18% of total quantity and 21% in value of Japan’s export. Cambodia is the second biggest importer, the share of which held 17% of total quantity, 16% in value of Japan’s export. Both Tanzania and
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Africa countries occupied 30% and Asian accounted 70% of the total exports in 2010.China is the biggest bicycle exporter to Japan, the share of which held 93% and Taiwan followed China with share of 3% (BMU, 2009). The sum of the other exporters was not over 1%.
The imports began its escalating trend from 1990, with quantity of 60,000,000 to the quantity of
The imports began its escalating trend from 1990, with quantity of 60,000,000 to the quantity of