Continuing weakness in the euro is likely to adversely affect Taiwan’s export-oriented bicycle industry, which counts Europe as a key market, but other factors should mitigate the impact, the country’s two leading bicycle manufacturers said yesterday.
Taichung-based Giant Manufacturing Co (捷安特), the world’s largest bicycle-maker, said the industry would be affected by the weak euro because the European market accounts for more than 20 percent of its total sales.
However, any loss in revenue from the falling currency may be partly offset by a decline in the cost of imported raw materials, Giant said. The terms of its quotations to clients also allow it to adjust price quotes when exchange rate fluctuations reach certain levels, the company said, which will help further ease potential foreign-exchange losses.
The euro was trading on Friday at a near two-year low against the US dollar at US$1.2312 and it fell to its lowest level against the Japanese yen (￥96.17) since November 2000.
The feeble euro and the eurozone debt crisis have slowed export sales to Europe, Giant said, but it stressed that it was making up for the slowdown there with stronger sales in the US and China.
Meanwhile, Merida Industry Co (美利達), the nation’s second-biggest bike manufacturer, said it did not expect to directly feel the impact of the weak euro because its exports are all quoted in US dollars, but it felt its European subsidiaries would be vulnerable to foreign exchange losses. According to the latest statistics released by the Industrial Development Bureau, Taiwan exported 1.2 million bicycles in the first quarter of this year, down 9.1 percent from a year earlier.
However, the average unit price rose 12.7 percent during the same period driving the value of first-quarter exports to US$14.84 billion, up 2.5 percent year-on-year, the figures showed.