The nation’s two major bicycle makers, Giant Manufacturing Co Ltd (巨大機械) and Merida Industry Co (美利達), on Thursday posted annual declines in revenue for last year, due to slow sales in China.
Giant, Taiwan’s largest bicycle manufacturer, reported that last year’s sales dropped 3.8 percent year-on-year to NT$54.83 billion (US$1.85 billion), while Merida’s revenue fell 2.08 percent to NT$22.35 billion.
The two companies blamed the gloomy performance on falling revenue in China, despite a bike-sharing boom there.
China’s bike-sharing market grew rapidly in the first half of last year, but the sector underwent consolidation in the second half, with small firms exiting the market one after another.
While the bike-sharing business outlook remains positive, the market has seen decelerating growth, and is dominated by Mobike Technology Co (摩拜科技) and Ofo Inc (共享單車) in tier-one and tier-two cities in China.
Against this backdrop, bicycle manufacturers might need to focus on operating and management costs, compared with an emphasis on volume in the past, Capital Securities Corp (群益證券) said in a note on Wednesday.
After three years of double-digit declines in sales, China accounts for only 15 percent of Giant’s total sales, compared with a peak of 27 percent in 2014, Citigroup Global Markets Inc said in a note on Jan. 7.
“Shared bikes have greatly eroded demand for commuter bicycles in China, while the demand for recreational bikes remains muted due to sluggish demand for recreational bikes,” Citigroup said.
Giant said most Chinese commuters still prefer low-priced models, whereas the company’s major offerings are high-end products, such as road bikes and touring bikes, with higher average selling prices (ASPs).
However, growing demand for electric bicycles in Europe offered a silver lining for Giant and Merida, as they have seen increased market penetration there.
Giant declined to provide shipment figures for its electric bicycles in Europe, saying only that sales of e-bikes grew by nearly 40 percent in Europe during the first half of last year.
Citigroup estimated that Giant’s high-end e-bike sales in Europe might have increased by up to 35 percent annually to about 80,000 units last year, with an ASP of above US$1,500 against a blended ASP of US$360 to US$370 for traditional bikes.
“Total e-bike sales are estimated to account for 9 percent of Giant’s 2017 revenues and we forecast Giant’s high-end e-bike shipment will grow at [a] 30 percent-35 percent compound annual growth rate [in] 2016-19,” Citigroup said.
Merida’s electric bicycle exports to Europe rose by 56 percent on an annual basis in the first three quarters of last year, with a total shipment of 65,000 units, the company said.
Overall, global e-bike sales volume rose by 58.6 percent year-on-year in 2016 and rose by 31.29 percent annually from the first quarter to the third quarter of last year, Capital said.
“Global e-bike sales are forecast to continue growing by 20 percent to 30 percent year-on-year in 2018,” Capital said.
The strong growth momentum in electric bicycles is expected to lend support to local manufacturers in the coming years, Taiwan Bicycle Exporters’ Association (台灣自行車公會) secretary-general Gina Chang (張蕙娟) said last month, adding that technological thresholds for e-bikes are higher than those for traditional models.
In the first 10 months of last year, Taiwan’s electric bicycle exports totaled US$196 million, up 70.83 percent from the US$115 million a year earlier, association data showed.
TEMPORARY TRUCE: China has made concessions to ease rare earth trade controls, among others, while Washington holds fire on a 100% tariff on all Chinese goods China is effectively suspending implementation of additional export controls on rare earth metals and terminating investigations targeting US companies in the semiconductor supply chain, the White House announced. The White House on Saturday issued a fact sheet outlining some details of the trade pact agreed to earlier in the week by US President Donald Trump and Chinese President Xi Jinping (習近平) that aimed to ease tensions between the world’s two largest economies. Under the deal, China is to issue general licenses valid for exports of rare earths, gallium, germanium, antimony and graphite “for the benefit of US end users and their suppliers
Dutch chipmaker Nexperia BV’s China unit yesterday said that it had established sufficient inventories of finished goods and works-in-progress, and that its supply chain remained secure and stable after its parent halted wafer supplies. The Dutch company suspended supplies of wafers to its Chinese assembly plant a week ago, calling it “a direct consequence of the local management’s recent failure to comply with the agreed contractual payment terms,” Reuters reported on Friday last week. Its China unit called Nexperia’s suspension “unilateral” and “extremely irresponsible,” adding that the Dutch parent’s claim about contractual payment was “misleading and highly deceptive,” according to a statement
The Chinese government has issued guidance requiring new data center projects that have received any state funds to only use domestically made artificial intelligence (AI) chips, two sources familiar with the matter told Reuters. In recent weeks, Chinese regulatory authorities have ordered such data centers that are less than 30 percent complete to remove all installed foreign chips, or cancel plans to purchase them, while projects in a more advanced stage would be decided on a case-by-case basis, the sources said. The move could represent one of China’s most aggressive steps yet to eliminate foreign technology from its critical infrastructure amid a
Nissan Motor Co has agreed to sell its global headquarters in Yokohama for ￥97 billion (US$630 million) to a group sponsored by Taiwanese autoparts maker Minth Group (敏實集團), as the struggling automaker seeks to shore up its financial position. The acquisition is led by a special purchase company managed by KJR Management Ltd, a Japanese real-estate unit of private equity giant KKR & Co, people familiar with the matter said. KJR said it would act as asset manager together with Mizuho Real Estate Management Co. Nissan is undergoing a broad cost-cutting campaign by eliminating jobs and shuttering plants as it grapples
RSS