Mon, May 09, 2005 page11

• China leads the pack on a bike

  INNOVATION New life has been breathed into China's bicycle industry, thanks to low production costs and a recent influx of foreign investment money

  • AP
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  Things looked bleak for China's bicycle makers as the pedaling masses fell in love with the car.

  But after watching sales slump as anyone who could afford it switched to scooters or sedans, makers have bounced back by targeting export markets that they once ignored and improving the quality of bikes that used to come in just one color -- black -- and one speed.

  "China is all about good prices, but quality is also improving very quickly," said Zhang Lei, vice manager for bicycle sales at Suzhou Everich Import & Export Co (蘇州恆豐進出口公司), at a recent trade show in Shanghai.

  Zhang and his colleagues were showing off their latest product, the Gold Arrow e-scooter -- an electric three-wheeler that Zhang says can run for up to 25km on one charge.

  Also at the show, manufacturers displayed bikes with convex seats and "Harley Davidson" low-rider handlebars and front wheels, chainless bikes, electric bikes, Tonino Lamborghini racing bikes and children's bikes and trikes of every hue and theme, outfitted with Hello Kitty bells, airplane-shaped lights -- you name it.

  Chinese own about 450 million bicycles and every year the country produces another 75 million.

  More than two-thirds of those are exported, to South America, the Middle East, Europe and the US.

  More than nine in 10 bikes bought by Americans are made in China.

  The northeastern city of Tianjin, home to the Flying Pigeon brand, exported nearly 8 million bicycles last year, up 35.4 percent over 2003, and aims to boost that to 10 million by next year, according to state media.

  Chinese still rely on bicycles to get around crowded cities. The sight of bikes loaded with appliances or mountains of plastic jugs and cardboard due for recycling is common even in Shanghai. Itinerant bike repairmen can be found on almost every street.

  But the country came late to the global market. As late as 2000, makers were struggling and inventories soaring as families switched from their trusty, often rusty, Forevers and Flying Pigeons to diesel-powered motorscooters and cars.

  In the past few years an influx of foreign investment, retooling by traditional bike makers and the development of a huge market in diverse accessories has breathed new life into the industry, as manufacturers and buyers shifted from Taiwan and Japan to lower-cost China.

  "Bikes made in Taiwan got to be just too expensive, so we began making bikes in Shanghai and exporting them to Japan," said Daisuke Iwazu, an employee of Shanghai Hachisuka Bicycle Co, struggling to be heard over a Sesame Street video playing atop his company's display.

  Hachisuka, based in central Japan's Aichi prefecture, switched from buying bikes in Taiwan for sale in Japan to making them itself. It now turns out 160,000 units a year and plans to begin sales in China later this year, Iwazu said.

  "We're already making bikes here. It would be a waste not to sell here, too," he said.

  Taiwan's bicycle exports have been falling since 1999, dropping to about 4.5 million bikes in 2003 from a peak of more than 10 million in the mid-1980s.

  Unable to match the low prices of producers in China, where a decent new bike can cost as little as 300 yuan (US$35), Taiwanese companies have been shifting to higher-end bikes, such as one model with a drive shaft instead of a chain.

  BikeValley, a South Korean company, was showing TaRa chainless bikes powered by a drive shaft -- a device the company says was invented by its founder, Hwang Chil-sung.

  New technology alone may not be enough. Chinese companies also are innovating as they try to stay ahead of Vietnam, another destination for companies looking to cut production costs.

  Next to BikeValley's exhibit was one by Adura bikes, a company based in nearby Jiangsu province that sells two-shaft chainless models. And in another hall, a company based in southeast China's Fujian was displaying chainless bikes with pedals attached directly to the rear wheel.

  "Folding bikes are what people want," said Samuel Chow, who was manning Adura's booth. "And for folding bikes, this is much better, much cleaner."
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