‘Taipei Cycle 2021’ International Media Launch
A year is a long time in cycling. But when that year also involves a global pandemic, well, all bets are off.
Twelve months ago, I was sitting in a conference room in the southern Taiwanese manufacturing hub of Taichung; now I’m watching on from 7,200km away via a livestream on Facebook for the official media launch of Taipei Cycle 2021, the world’s second largest annual bike show. The location may be humble, but the subject matter is nonetheless compelling. Three of world cycling’s manufacturing heavyweights – Bonnie Tu (Chair, Giant Group), Michael Tseng (President & CEO, Merida) and Robert Wu (Chairman, KMC) – are sharing their thoughts on the current, highly disrupted, state of the global cycling supply chain.
Little of what the trio has to say is especially surprising. However, their insights do help to shed some specific light on exactly why the current lead-times, especially on new bikes, are so frustratingly long. Indeed, after hearing what they have to say, the only real surprise is that the current delays aren’t even longer.
While, domestically, Taiwan was quick to control the spread of the pandemic, its multi-billion dollar bike industry continues to be heavily impacted on multiple fronts. In the initial months of 2020, hard border closures, especially with China, made it virtually impossible for many manufacturers to source raw materials and components. But even those who were able to continue production found they were unable to sell their products, as border restrictions saw Taiwan’s exports grind to an unprecedented halt in the first quarter of 2020.
As Giant’s Bonnie Tu explained, “The biggest impact was during February and March due to the lockdown in China, our production stopped completely.” In other words, for two full months precisely zero bikes or components were produced by the world’s largest bicycle manufacturer. (To put this into perspective, Bike Europe reported that Giant’s global sales for just one month – September 2019 – were over AUD$287 million.) Is it any wonder the global market is still playing catch up, seven months later?
The good news for Taiwan is the wheels of production are turning again. Things are improving fast, however – led largely by Europe, and especially Sweden – demand isn’t just returning to past levels. As Robert Wu, Chairman of KMC, explains, “global demand is growing abruptly” driven by changes in both riding behaviour and also government policies keen to promote cycling as an ideal, socially-distanced transport option for our cities. “After lockdown, cycling has returned rapidly, even better than before,” says Wu. “Many countries have proposed different strategies (post-Covid) involving bicycles, so we’re not just seeing challenges but also opportunities.”
Whilst more people cycling is clearly an opportunity, the flipside is it’s placing even greater pressure on already stressed supply chains. “We’re seeing great shortages on the supply side,” explains Wu, pointing out KMC has significantly upscaled its shifts and workforce in an attempt to meet demand from its direct and OEM clients, who include all of the major drive-train suppliers. “There’s still a great imbalance between demand and supply. For the next few years we know we’ll definitely need to be producing more parts (than usual).”
Of course, overlay all of this with the generally low sales volumes commanded by the Australian market, and it’s easy to imagine we’re quite low down the global pecking order. Patience is likely to be required for some time yet.
Online and offline worlds collide
Somewhat inevitably, Taiwan’s cycling industry is also re-evaluating the way it markets itself in the post-pandemic world. Listening to Giant’s Bonnie Tu, Covid-19 has clearly been an industry-wide wake-up call – and it’s already been the catalyst for significant changes. While Giant had been shifting towards a more digital marketing model for some time, Tu explains Covid-19 has certainly fast-tracked the situation. “We see online marketing and product launches becoming the new normal at Giant,” she says, pointing to the recent arrival of the latest generation Giant TCR as an example, launched entirely online in July. “It will increase speed (to market) and reduce the amount of travel needed, especially for buyers, so it’s very important.”
A similar digital shift will also see the 2021 Taipei Cycle exhibition, run by TAITRA (the Taiwan External Trade Development Council), staged as a fully-integrated online and offline event for the first time ever. Of course, with cycling being such a tactile pastime where you need to feel, touch and ride the technology to truly appreciate it, this raises inevitable questions. But one thing is for certain. Interesting times lay ahead.
Pandemics notwithstanding, Taipei Cycle is scheduled from March 3-6, 2021.
One thought on “Cycling through Uncertainty: TAIPEI CYCLE 2021”
Interesting blog Peter. Did you get the sense that the major bike manufacturers are changing their production processes and/or locations to make them more resilient to supply chain interruptions?