Tue, Dec 30, 2003 - Page 11 News List

Giant to build new bike factory in western China

CHENGDU WHEELS Taiwan's biggest maker of bikes, looking to improve its logistics in the world's largest market, will construct a new facility in Sichuan province

CNA , TAIPEI

Taiwan's top bicycle manufacturer, Giant Manufacturing Co (巨大機械), is planning to establish a third manufacturing plant in China next year in an effort to meet increasing market demand, a company spokesman said Monday.

Giant is planning to invest US$12 million in constructing the plant, to be located Chengdu, Sichuan province. The factory will have a production capacity of 400,000 bicycles per year, the spokesman said.

Construction of the plant will begin after an investment plan is approved by the Investment Commission of the Ministry of Economic Affairs, the spokesman said.

Once the plant becomes operational, it will be the largest bike manufacturer in western China, capable of supplying fashionable and high-quality bicycles to the region stretching from Kunming in the south to Xian in the north, an area that is home to 300 million people, the spokesman said.

China is the largest bicycle market in the world, with the bicycle continuing to be the main means of transportation in the country of 1.3 billion. Annual demand for bikes of various kinds in the country totals around 25 million units, the spokesman said.

Giant has established two manufacturing plants in China since 1993, with one located in Kunshan in the eastern province of Jiangshu and the other in Pudong, Shanghai.

After 11 years of doing business in China, Giant is now the No. 1 bicycle brand name in China in both quality and quantity, according to the spokesman.

In view of China's vast size and the amount of time and money needed to transport bicycles from the eastern part of the country to the western part, Giant's management has decided to establish a plant in the west.

Giant, which currently maintains four manufacturing plants around the world, produced 4.7 million bikes of various kinds last year. The company's output goal for this year is 5 million units, the spokesman said.

The company's flagship manufacturing plant, located in Taiwan, is projected to export 620,000 high-value bikes to Europe, Japan and North America this year, while its Kunshan plant is expected to churn out 2.8 million bikes, with 1.25 million of them to be sold in China.

The Pudong plant, meanwhile, is expected to produce 1.3 million children's bikes this year, mainly for export to the US.

Giant's plant in the Netherlands is projected to manufacture 280,000 bikes this year, exclusively for the European market.

Giant is concentrating on China and hopes its sales there will increase from last year's 1 million units to 1.25 million this year. The company hopes to develop a 10-percent market share in China, or 3 million units per year, the spokesman said.

As part of its market segmentation strategy, Giant uses three brand names -- Giant, X-net and G&P -- for its bikes sold in China.

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