Chapter 2 Bicycle Industry in the World
2.5 Bicycle Industry in Taiwan
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in 2010 (JBPI, 2011a). However, the total sales in 2010 reduced 12% in comparison with the year 2007 (Table 2-14).
2.4.2 Bicycle Planning Policy
Making cycling as a major mode of urban transport system for a short distance, there should be enough space for cycling in urban areas. In addition, accidents involving bicycles are accounting for an increasing percentage of all traffic accidents. Therefore, it is necessary to enhance creating safe and comfortable environment for cycling. In cooperation with National Police Agency, Ministry of Land, Infrastructure, The Japanese government has designated 98 areas as “Bicycle-Friendly Model Areas” in which efforts to improve bicycle-friendly environment are concentrated. As for development of cycling space, the measures are employed in consideration of traffic condition; such as creating bicycle paths; separating bicycle lanes from travel lanes, and permitting cycling on sidewalks (marking bicycle lanes in the sidewalks).
According to a census in 1999 made by Ministry of Land, Infrastructure, Transport and Tourism of Japan, more than 40% of private cars moved not more than 5 kilometers, and around 24% moved around 5-10 kilometers, which means the share of car moving less than 10 kilometers was more than 60%. This was assumed inefficient oil consumption while evaluating if it is efficient that the driver moves a 1 ton weighted car in order to move himself alone to some places within 5 kilometers away, not to mention the waste of gasoline keeping car waiting in the traffic jam. In a experiment made by NPOJSURP ( Japan Society of Urban and Regional Planners) in 2006 the time spent in riding a bicycle for 8 kilometers from Tokyo to Toranomon (虎ノ門) is 25 minutes compared to 30 minutes by taking a taxi for a cost of 2980 yen. Bicycles seem to be a healthy and efficient way to alter citizens’ habits of using transportation.
2.5 Bicycle Industry in Taiwan
In 1980s many Taiwan bicycle manufactures moved factories to China due to high cost of labor and appreciating Taiwan dollars. A-Team’s establishment initiated by Giant to integrating branded Taiwanese bicycles enterprises, Taiwan bicycle manufactures have been dedicating in innovation on bicycle’s design, materials and market. The average price per bicycle of home market escalated 300% from NTD3, 185 in 2000 to NTD9,990 in 2009. The ratio of home
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market revenue had risen 9.9% by middle of 2009 comparing to 2.7%, the ratio of export and home sales in 2005 (Wang, 2009).
2.5.1 Production, Export, Import, and Domestic Sales of Bicycle
Taiwanese Bicycle industry has following characteristics (Shi et al., 2005). All the following characteristics can be found in the bicycle industry in Taiwan, and even in China.
1. Tight interdependence among upstream, midstream, and downstream manufactures.
2. Bicycles need more than 2000 parts to assemble a complete bicycle.
3. Bicycle is export-oriented industry and is subject to overseas market.
4. The material of bicycle is the lion share of cost and the development and innovation of the material is vital to success of the business.
5. Overseas market is subjective to global economic and seasonal impact.
6. The usage and modes of bicycle are different in cities or countries.
7. Bicycle industry is upgrading into a high-tech industry.
Looking back global bicycle industry developments, it progressed for three stages of spatial transferring. The first stage it transferred from Western countries to Asia, or Japan; in the second stage it moved from Japan toward Taiwan; the third stage is relayed from Taiwan to China. In mainland China, the bicycle industry geographic transforming started from Pearl River Delta, then Yangtze River Delta and finally to Bohai-rim region (Zhang, 1992).
As China’s infrastructure develops, many smaller coastal cities, which is closer to the ports and have skilled labors, will be the priority for sourcing. To Taiwanese enterprises, Shenzhen was the first choice for most Taiwanese bicycle firms. Without noticing Giant Taiwan for cancelling orders, Schewinn, whose order accounted 75% of Giant’s total orders, invested with Hong Kong companies to set production line in Shenzhen (Xu, 2009). Poured in foreign and Taiwanese capitals and technique in Southern China bicycle industry, the bicycle industry clusters gained its solid ground in the area.
The sales of Taiwanese bicycle in value in 2007 had increased 24%, to 41,252 million in comparison with the year 2006, contributed to high-rising oil price. The turnover in 2008 continued increasing 34% to 55,417 million. The oil price went down in the middle of 2008, but due to the unpaid leave forced by the enterprises the trend people take a trip by bicycle are
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getting more and more popular. The statistics accounted 741,000 workers in Taiwan took unpaid leave in November, 2008.2 The ratio of home market revenue had risen 9.9% by middle of 2009 (Wang, 2009). This has accelerated the selling of high-end bicycles in domestic market.
As displayed in Table 2-16, the import of high-end bicycles from Italy or Germany in 2006 grew 23% to 575 million in 2007 and 180% in 2008 to 1,610 million. Although the oil price was not in high position as it was in 2007 and 2008, the import in 2009 still grew 49% to 2,398 million. The home market sales, 5,431 million in 2008 increased 27%, and in 2008 it rose 111% to 11,464 million. The export revenue 36,396 million in 2007 increased 24% to 45,563 million in 2008 but decreased 10% to 41,171 million in 2009.
Table 2-16 Statistic Data of Bicycle in Taiwan
Unit: Million NTD
2005 2006 2007 2008 2009 (Jan.- Jun.)
Sales Value 36,482 33,230 41,252 55,417 51,322
Import 670 466 575 1,610 2,398
Export 31,719 29,431 36,396 45,563 41,171
Home Market Sales* 5,433 4,265 5,431 11,464 12,549
Note: *Home Market Sales= Sales + Import –Export.
Source: Wang (2009).
As presented in Table 2-17, China and Vietnam had been the first and second biggest exporters for Taiwan. Germany, Italy, UK and USA are exporters of high end bicycles and bicycles parts. China accounted over 90% of all imports to Taiwan from 2007 to 2009. China announced 9% export tax refund in December 2008 and kept its export-encouraging tax policies to increase 15% tax refund in June 2009 (Wang, 2009) , to accelerate China’s lagged economic.
This can account to two effects to Taiwan bicycle industry. One is to push the China’s cheap bicycles exported to Taiwan, and the other is to reduce Taiwan’s competitiveness of exporting to other countries.
Regarding countries which import Taiwanese bicycles, European countries account the ________________________
2 The statistics showed that as a result of the unpaid leave practice, 741,000 people worked less than 35 hours per week, http://www.coolloud.org.tw/node/32596.
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Table 2-17 Proportion of Top 5 Countries Exporting Bicycle and Parts to Taiwan
Unit: %
Rank 2005 2006 2007 2008 2009(Jan.-June)
1 China(71.54) China(88.24) China(92.54) China(92.32) China(92.28) 2 Vietnam(23.85) Vietnam(8.30) Vietnam(2.50) UK(1.74) UK(1.60) 3 Germany(2.09) USA(1.08) Italy(1.37) Germany(1.40) Italy(1.34)
4 Italy(0.88) Italy(0.92) USA(1.33) USA(1.27) USA(0.93)
5 USA(0.62) Germany(0.51) Others(0.67) Others(0.95) Cambodia(0.8) Source: Same as Table 2-16.
Table 2-18 Proportion of Top 5 Countries Importing Bicycle and Parts from Taiwan
Unit: %
Rank 2005 2006 2007 2008 2009 (Jan.- June)
1 USA(27.30) USA(24.30) USA(22.06) USA(21.80) USA(22.89)
2 Germany(9.70) UK(11.54) UK(12.02) UK(11.13) Germany(10.09) 3 UK(9.54) Netherland(9.29) Netherland(10.54) Germany(9.84) Netherland(9.78) 4 Netherland(9.53) Germany (8.63) Germany(8.82) Netherland( 9.74) Japan(8.28) 5 Belgium(7.95) Belgium(6.19) Belgium(5.53) Belgium(5.70) UK(7.54) Source: Same as Table 2-16.
From 2006-2008, the share of the UK’s imports was around 10%, ranked second position.
Germany ranked the second in 2005 and 2009. Netherland and Belgium have also been on the top five counties list. Taiwan’s average price of exported bicycle had been NTD 7,340 in 2005, gone down a little in 2006 and then taken the up-rising trend to the highest point, NTD 9,990 in 2009 (Wang, 2009).
Manufacturing bicycles can be divided into two parts. One is to assembly the whole parts into a complete bicycle. Mostly these kinds of factories, such as Giant, Merida, or Idea made the frame and coating by themselves according to customers’ needs. The other one is to manufacture bicycle parts, such as transmission gear producer Japanese Shimano or American SRAM or Taiwanese Sun Race.
Assembly factory is a labor intensive work since it is hard to automatically assemble
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2000 different parts into a bicycle. It is not hard for new competitors entering the parts manufacturing business, either. The evidence could be seen from the number of bicycle factories grew from 255 in 1966 to 1307 in 1991. The average employees did not exceed over 30 in the period. Each component factory supplies about 20 complete bicycle factories while each complete bicycle factories had around 60 component suppliers (Chu, 1997). This was one reason why Taiwanese factories moved the factories to China looking for cheap labor and land to be more competitive in price.
Taiwan had been a biggest bicycle producer in the world so Taiwan imported less and exported more complete bicycles. Taiwan’s imported complete bicycles accounted total imports of 3.7% and imported bicycle parts accounted 96% in 2004. Impacted by high oil price effect, high end bicycles requirement increases, the imports of bicycles and parts were increasing from 2007, NTD575 dollars, 2008, NTD1.6 billion dollars to 2009, NTD2.4 billion (Shi et al., 2005).
The following list is the list for bicycle parts Table 2-19. Taiwan and China are both export-driven economies. The exports of complete bicycle are over 90% for both countries. The three main imported parts systems in Taiwan are frames, brakes, and transmission. In 2004 imports of frames and forks were NTD3.5 billion, 28.8% of total imports, and imports of transmission, such as derailleur and shift levers, were NTD1.9 billion, 19.5 of total imports. The total imports of frames, brakes, and transmission systems took more than 60% of total.
Table 2-19 List of Bicycle Parts Frame Top Tube; Down Tube; Seat Tube; Seat Stay; Chain Stay.
Wheels and Tires
Spokes; Hub; Rim; Tire, Valve.
Transmission (Drivetrain)
Crankset and Pedals; Chain; Freewheel; Cogsets; Derailleur and Shift Levers
Steering Handlebars; Stem; Saddles; Seat Post; Handlebar Grip; Head Tube; Shock Absorber;
Front Brakes; Fork.
Accessories Kickstands; Baskets; Luggage Carriers; Child Seat; Clipless Pedals; Toe-Clips; Lights;
Reflectors; Security Locks; Mirrors; Water Bottles and Cage; Bell.
Source: Shi et al. (2005).
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Table 2-20 Top 5 Countries Exporting Bicycle Parts to Taiwan
Unit: Million NTD material technology. The enterprises in the US have moved the production lines to China so the imports from China were increasing. As shown in Table 2-20, China has replaced the US to be the top 1 exporter of frames to Taiwan during 2002-2004. The ratio of exported China’s frames
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accounted from 66.3% in 2002 to 77.6% in 2004. The US ranked the second. The exported frames from the US were reducing from 28.9% in 2002 to 16.6% in 2004. China was also the top 1 exporter of steering systems and accessories to Taiwan (Shi et al., 2005).
In terms of brake and transmission systems, Japan holds oligopoly market. Taiwan imported brakes system NT670 million, 61% of total imports of brake products in 2002 and NT1.56 billion, 72.7% in 2004; The transmission systems, such as Shimano’s derailleur and shift levers had been exported to Taiwan NT1.39 billion, 61.2% of total imports of transmission products in 2002, increased to NT2.52 billion, 67.9% of total imports of transmission products (Table 2-20).
In respect of wheels and tires, China overcame France and Malaysia took the number one position in 2005. The imports of wheels and tires from China was NT530 million, accounting 33.5% of total imports of wheels and tires, an increase of 9% comparing to the imports in 2003.
This increase may be attributed to Taiwanese wheels manufactures which established production lines in China. In respect of steering systems, China and Italy took the first and second position, with share of 79% and 15.8% respectively in 2004. Regarding the accessories, China and Germany ranked respectively the first and the second, taking the share of 53.9% of total imports of accessories and 28.8% (Table 2-20).
2.5.2 Bicycle Planning Policy
Taipei and Kaohsiung both have public bike share systems. The system in Taipei is known as Youbike (or U-Bike) and in Kaohsiung it's known as C-Bike. Starting from February of 2009 the total rentals in Kaohsiung were 1,487,448. The bikes were used 155,077 times which was 105,964 more than the same month of the last year. The average turnover rate is 4.6 time/bike/day.3
The program of the “Establishment, Operation, and Management of the Bike Sharing System” was launched by the Department of Transportation, Taipei city government, to encourage citizens to use public bicycles for short distance between bus or train stations or MRT stations in a hope to build a seamless public transport network.
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3 The most intensive time for using public bikes is from 17:00 to 17:59, http://www.c-bike.com.tw/english/NewsShow.aspx?nid=256.
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In collaboration with Giant Taiwan, the Taipei city government initiated the Taipei Bike Sharing System Service Plan, known as “YouBike” since 1998. YouBike is a sub-system of MRT service.
Easycard, credit cards and cell phones are accepted as payment methods for YouBike rentals.
The bicycle sharing system is promoted by the model cities, and Taiwan government hope this system can be promoted to the whole island and Ministry of Transportation and Communication will build the bicycle lane network connected between cities through the whole island.