Taiwan’s bicycle makers might see their shipments contract 10 percent annually next quarter as global demand for low to mid-end bicycles remains weak, Credit Suisse Group AG forecast.
Credit Suisse kept its “under-perform” rating on the nation’s two major bicycle makers, Giant Manufacturing Co (巨大機械) and Merida Industry Co (美利達), which analyst Jeremy Chen (陳建名) said was a consequence of the firms’ weak sales last quarter.
Giant and Merida both reported declines in accumulated sales in the first nine months of the year.
Giant, the nation’s largest bicycle maker, has seen its sales drop 5.7 percent annually to NT$44.23 billion (US$1.4 billion) this year, company data showed, while Merida sales dropped 19.95 percent to NT$17.4 billion.
Any recovery in the Chinese market, which has slowed this year, is a key factor that needs to be monitored watched, Chen said in a report that was released on Thursday last week.
“Shipment volume to Europe and North America could stabilize in 2017, but [the volume to] China could continue to dwindle,” Chen said, adding that China’s inventory levels have remained higher than expected.
In the first half of this year, Giant’sand Merida’s overall shipments declined 22 percent and 30 percent respectively from a year earlier, the report said.
Despite the recovering global demand for electric bikes and high-end bicycles, Credit Suisse said it is conservative about local manufacturers in the first half of next year, as sales contribution from electric bikes is still minimal for them.
During the January to August period, Taiwan’s bicycle exports totaled US$968 million, down 21.02 percent from last year, data compiled by the Taiwan Bicycle Exporters’ Association (台灣區自行車輸出業同業公會) show.
The nation’s electric bike exports skyrocketed 216.07 percent to US$93 million from a year earlier, although that was only a 9.6 percent share of global bicycle exports, the associations’ data showed.
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