A major Russian bicycle manufacturer based in Perm, Forward, announced a contract with Decathlon that will allow it to triple its annual production from 250,000 to 750,000 units. It is not known yet when and where the new production lines will go into operation, however.
At that point in time, the French sports retailer will stop importing bicycles from abroad and will sell them with the “made in Russia” label in all its 54 stores in the country, including those that are located in the remote regions of Siberia.
By transferring the production of some or all its bicycles to Russia, the French retailer could cut costs by up to 15 percent, according to a local consulting agency, Infoline-Analytics, thanks to recent changes in customs regulations. Import duties on components for the assembly of bicycles were abolished, while import duties on finished bikes were cut from 20 to 14 percent.
The change in import regulations for components is playing in favor of Decathlon, which privileges wherever possible its reliance on local manufacturing operations. It is in line with the Russian government's desire to promote a higher degree of industrialization for many different types of consumer goods that have been mostly sourced from abroad.
According to a local consultancy, Business Stat, a total of about 2 million bicycles were made in Russia in 2017. The biggest Russian producer of bicycles is said to be Velomotors, which shipped some 1.5 million units last year, generating revenues of about $90 million. Some are sold by Velomotors under its own brand, Stels. Others are supplied to various contractors including Sportmaster, the country's biggest sporting goods retail chain. The company, which claims a market share of 35 percent in Russia, has indicated that it plans to start exporting some of its own production.
According to the same consultancy, Russia imported 2.2 million bikes last year, 90.6 percent of them from China. This is apparently in contrast with an estimate by Euromonitor International, according to which Russia imported bicycles worth only about $50.1 million in 2017, implying an average price of about $25 per unit. Quoting this figure, Infoline Analytics estimates that Decathlon accounted for 9 percent of the import trade with a total value of $4.8 million.
